Dossier. Businesses and managerial models
Focus. Political economy
The Debate. State vs. Market
Strategy and entrepreneurship
Innovation & Operations Management
Supply Chain Finance for the Management of Working Capital
Supply chain finance (SCF) is the set of solutions able to exploit the strong points of a supply chain in order to optimize working capital and cash flow. The use of this solution often leads to an increase of liquidity and profitability along the supply chain, and to positive spillover effects in terms of trust and commitment among the partners of the chain. The main goals pursued by companies are the short-term optimization of working capital to increase liquidity and mitigate supply chain risk. The reaching of these goals is supported by various elements: collaboration and trust between the parties involved; competitive financial conditions for SCF solutions combined with effective digital integration; and dedicated governance within the sponsor companies. SCF factors act differently depending on the company, its goals, and the relevant sector. Therefore, each company must take these elements into account to choose the SCF solution and provider most suited for its needs.