Supply Chain Finance Example

A typical extended payables transaction works as follows.

Supply chain finance example.

Supply chain financing is a general term used to describe a number of financial tools that can be used to improve payments between companies and their suppliers. For example a supplier that is anticipating large orders and wants to build inventory can use supplier financing. Let s look at two different examples of a supply chain. Presently associated with ge africa as a finance analyst on their finance leadership program with 3 4 yrs relevant experience.

Supply chain finance scf is an approach used by two or more organisations in a supply chain to jointly create value through means of planning steering and controlling the flow of financial resources on an inter organisational level hofmann 2005 3. Supply chain finance also known as supplier finance or reverse factoring is a set of solutions that optimizes cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for their large and sme suppliers to get paid early. The following are illustrative examples of a supply chain. Let s say the buyer company abc purchases goods from the seller supplier xyz.

The raw materials are then taken by a logistics provider to a supplier which acts as the wholesaler. A supply chain is the end to end system that creates products and services and delivers them to the customer. Supply chain finance definition. Goods can also flow in a reverse direction in a supply chain from the customer back to producers for purposes such as returns reuse and recycling.

Ambitious goal driven finance analyst with expertise in financial management auditing financial planning analysis supply chain management and commercial finance. In 2015 a mckinsey report suggested that scf had a potential global revenue pool of 20 billion while in 2017 china s supply chain finance sector was tipped to reach us 2 27 trillion by 2020. Supply chain finance scf is a large and growing industry. Supply chain finance solutions can be implemented in various ways.

The generic supply chain begins with the sourcing and extraction of raw materials. Example of supply chain finance.