All supply chain professionals should understand not only the physical flow of goods and services towards the end-customer, but also the financial flow of money from the customer back up the value chain.
Consider this scenario: How does a large firm, let alone a small business, increase its supply chain capacity to better serve its customers? CAPEX investments in new manufacturing plants, logistics fleet, or enterprise technologies are costly upgrades. If a firm does not have sufficient cash to pay for these upgrades due to outstanding account receivables, one trending financial recourse — exacerbated by the pandemic no doubt — is to increase assets through supply chain financing.
In simple terms, supply chain finance (SCF) refers to an agreement between buyer and seller to restructure the financing of purchases in order to generate working capital that benefits both parties. A financial institution, such as a bank or fintech partner, effects this model.
There are eight models of supply chain financing as listed in Table 1. In the next section, I deep dive the one of the most popular methods: reverse factoring, also referred to as payables finance.
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Thank you for your interest in Connect 2022. Unfortunately, we have decided to postpone the May 20th event until the fall. All registrants will receive a full refund. We worked hard to promote the event within the collaborating organizations and more broadly. Previously (pre-covid), this was a successful strategy -- we even reached capacity in our first year without a track record for the event. However, registration this year is far below what we believe is needed to provide a valuable experience. There are likely many reasons for this, and we will learn from the experience to better prepare for an event in the fall.