What is Financial Supply Chain Management?
Supply chain management is the process of managing the supply chain of an organization, including procurement, production, distribution and inventory control. The financial supply chain is the aspect of supply chain management that deals with financial aspects such as revenue, cost, and expense. Financial supply chains are usually for large organizations with many parts.
A good example of a company that has a well-managed financial supply chain is Wal-Mart. Wal-Mart employs over 2 million people worldwide with annual sales of over $500 billion dollars. It manages its supply chains by using detailed information about its suppliers and purchase orders to forecast demand for products in order to buy them at the right time and cut costs.
Financial supply chain management has been an important and integral part of business for a long time. It is essential for businesses to have effective financial SCM in order to function. Financial SCM helps a company understand its assets and liabilities better, as well as forecast future cash flows more accurately.
Large and small corporations are facing constant pressures to remain competitive in a global market. One way they can stay competitive is by streamlining and optimizing their supply chain processes. Firms that optimize their supply chain can improve product quality, reduce labor costs, increase customer satisfaction, capture new market opportunities, and bolster corporate competitiveness.
In order to optimize the supply chain of a business it is important to consider five key areas:
- strategy
- sourcing
- production
- processes and systems
- distribution channels or services and
- customer service.
The importance of financial supply chain management is outlined in this article. The topic is relevant for many industries and the current state of the world economy, as it can be applied to solving major financial problems in a global economic system.
Financial supply chain management is an important topic that is unique to the academic disciplines concerned with operations and management. Supply chains are vital to the success of many organizations, and companies need to know how they work if they are going to operate successfully in today’s increasingly competitive economic climate.
Supply chain management has been traditionally viewed as an area of business activity, and a key element of a company’s strategy.
The supply chain performs two functions. Firstly, it ensures delivery to the customer of the right product in the right quantity at the right time and in good condition. Secondly, it ensures that the required level of cash is available for investing in growth opportunities.
With globalization, companies have been compelled to look for supply chain management as their competitive advantage.
Supply chain management is a process that a company uses to maintain an efficient and effective supply chain between the components of the business. One of the most important aspects of supply chain management is inventory. The majority of the inventory consists of raw materials, which are needed in order to create finished products. Finished goods are then shipped to distributors for sale and distribution.
– Chandrasekhar Swaminathan