SUPPLY CHAIN FINANCE VISIBILITY

Transcription

1 WELCOME TO THE WORKSHOP ON SUPPLY CHAIN FINANCE VISIBILITY SCHOOL OF BUSINESS, ECONOMICS AND LAW AT UNIVERSITY OF GOTHENBURG 17 MAY 2017

2 Briefly about the School of Business, Economics & Law Started in 1923 by the local industry Part of the department structure within University of Gothenburg in 1971 Relaunched as a business school in 1986 Departments: Business administration Economics Law Business in society Triple accredited AACSB EQUIS AMBA Some facts (2015): 3700 full-time students Proportion of women: 51% alumni 475 employees, of which 48 professors 14 visiting professors Turnover: SEK 468 million

3 Developments in the block

4 Research in Logistics Deep cooperation with Chalmers Joint strategic funding since 2010 about 70 MSEK/year Joint research centres Northern Lead in logistics Lighthouse in shipping The logistics research group Shipping and intermodality Urban freight Sustainability

5 Source: John Holmberg, Chalmers Traditional government research and education funds Research Strategic programme funding The Knowledge Triangle Academy Education Innovation Knowledge Cluster Project funding from research funding agencies, EU, industry etc. Public Sector Private Sector

6 2007 Professor 1 Senior lecturer 2 Postdoc PhD student 6(1) Guest professor (2) 6(1) 3(2) 4(4) 1(1) (non-swedish) 2007 Journal article 1 Book chapter 1 Book PhD thesis 4 Conf. paper 2 Report

7 Source:

8 Project context Industrial and Financial Management and Logistics (IFEL) Supply Chain Finance; logistics, finance and law Center for finance Center for business systems Some interest from accounting and managament; Inter-organisational relations and purchasing Competence Center Finance (BRG)

9 The project: Supply Chain Finance: New roles for the logistics and transport industry Aim: Develop concepts for new SCF services, in which forwarders knowledge of product location and status facilitates trade, lowers credit risks and realeases the product value as collateral. Bringing Finance, Law and Logistics together Strong co-operation with the finance, manufacturing and logistics industries SKF, Danske Bank, DB Schenker, FIATA Administrative facts: December 2016 December MSEK from Vinnova 3,5 MSEK co-funding from the university and industry in-kind

10 SUPPLY CHAIN FINANCE VISIBILITY SCHOOL OF BUSINESS, ECONOMICS & LAW

11 What is Supply Chain Finance for academics? SCF aims to optimize financial flows at an interorganizational level trough solutions implemented by financial institutions or technology providers - Mattia et al., (2016) SCF is the inter-company optimisation of financing as well as the integration of financing processes with customers, suppliers, and service providers in order to increase the value of all participating companies Pfohl and Gomm (2009) Should SCF be inclusive or exclusive?

12 In practice SCHOOL OF BUSINESS, ECONOMICS AND LAW Source: State of Supply Chain Finance Industry, 2016, p. 36

13 What is Supply Chain Finance for academics? Lack of theory: Exploratory research to develop hypothesis No clear link between finance- and supply chain-focused studies Lack of comprehensive empirical evidence Who are the parties, when is it relevant what type of solutions are theoretically and practically viable? Does SCF make the supply chain better or is it just liquidity planning for large firms and regulatory arbitrage for the banks? Buyer focus but what about the tier 2,3,x suppliers? The chain is only as strong as its weakest link

14 The cash2cash cycle SCHOOL OF BUSINESS, ECONOMICS AND LAW Supply chain network C2c cycle Firm 1 buys Firm 1 pays Firm 1 sells Firm 1 receives Inventory AR AP Firm 1 C2c cycle Firm 2 buys Firm 2 pays Firm 2 sells Firm 2 receives Inventory AR AP Firm 2 C2c cycle Firm 3 buys Firm 3 pays Firm 3 sells Firm 3 receives Inventory AR AP = Accounts Payable AR = Accounts Receivable AP Firm 3 C2c cycle Firm 4 buys Firm 4 pays Firm 4 sells Firm 4 receives Inventory AR AP Firm 4 C2c cycle

15 In practice Source: State of Supply Chain Finance Industry, 2016, p. 22

16 Why Supply Chain Finance; all about the flows The ultimate objective [of SCF] is to align financial flows with product and informational flows within the supply chain, improving cash flow management from a supply chain perspective - Wuttke et al (2013) We can depart from practical perspective: The financial crisis and liquidity shortages among firms The link between the different flows in the supply chain Visibility: how do we make the flows visible? E-documents, tracking etc. Supply chain efficiency; win-win-win Who are the SCF-actors of tomorrow? The role of the LSP, the bank and other SCF parties But we can also have a more academic perspective: Who gains from SCF and who gets the cake? How can we reduce information asymmetry; risk and uncertainty? To what extent can these solutions facilitate or disrupt trust?

17 The missing element for flow ΔVisibility ΔVariability ΔFlow ΔCash Velocity Δ Net Profit Investment ΔROI Variability is defined as the summation of the difference between our plan and what happens Variability Variability = Flow = Flow Visibility is defined as relevant information for decision making. Visibility Visibility = Variability = Variability Based on: Carol Ptak

18 A Fundamental Question Becomes How do we enable visibility of relevant information across supply chains in today s complex environments in order to manage flow? Based on: Carol Ptak

19 SCF - Legal Perspectives Secured transaction laws; unitary model and filing; Art 9 of UCC Trade Facilitation and dematerialized trade documents Industry standards UN SDG, Target # 8.3