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Supply Chain Finance

Course Content

20 Sessions (3 credits)

This course delves into Supply Chain Finance (SCF), an emerging field that integrates supply chain management with financial strategies to enhance working capital efficiency and risk management. It explores key SCF techniques, financial instruments, and risk management strategies while emphasizing collaboration between supply chain and financial stakeholders. Through a mix of theory and practice, the course prepares participants to design and implement SCF solutions tailored to organizational needs.

Finance professionals, supply chain managers, procurement officers, and mid-level executives in operations and logistics.

Manufacturing, Retail, Logistics, FMCG, Pharmaceuticals, and Technology.

  • To understand the fundamentals and evolution of Supply Chain Finance.
  • To explore the integration of supply chain management and financial strategies
  • To analyse key SCF techniques for working capital management and risk mitigation.
  • To evaluate the role of technology in enhancing SCF efficiency.
  • To identify research and emerging trends in SCF and its ecosystem.
Lectures, Case Studies, Discussions, Numerical Problem Solving, Hands-on Projects, and Research-Based Learning
  • Demonstrate an understanding of SCF mechanisms and their impact on financial and supply chain performance.
  • Apply SCF tools and techniques to optimize working capital and mitigate financial risks.
  • Design tailored SCF solutions for specific supply chain contexts.
  • Leverage technology for efficient SCF operations and decision-making.
  • Evaluate current research and emerging trends in SCF for practical applications.
Prof. K S Ranjani
 
  • Michiel Steeman (2017), Supply Chain Finance: Its Practical Relevance and Strategic Value, Springer.
  • Simon Templar, Charles Findlay, Erik Hofmann (2016), Financing the End-to-End Supply Chain, Kogan Page.
  • Erik Hofmann, Oliver Belin (2011), Supply Chain Finance Solutions, Springer.
Module No. Session No. Topics Readings / Case Study / Videos
Module 1: Introduction to Supply Chain Finance (6 Hours) 1-4 Introduction to Course
  • History of Supply Chain Finance
  • Supplier Solutions
  • Buyer Solutions
  • Convergence of Buyer and Supplier Solutions
Supply Chain Finance
  • Conceptual Framework of Supply Chain Finance
  • Supply Chain Financial Instruments
  • Emerging Research on Supply Chain Finance
Working Capital Management in Supply Chains
  • Introduction to Working Capital
  • Working Capital and Supply Chain Finance
  • Approved Payables Finance
  • Dynamic Discounting
  • SPV Financing Model
  • P-Card
  • Xu, X., Chen, X., Jia, F., Brown, S., Gong, Y., & Xu, Y. (2018). Supply chain finance: A systematic literature review and bibliometric analysis. International Journal of Production Economics, 204, 160-173.
  • Caniato, F., Henke, M., & Zsidisin, G. A. (2019). Supply chain finance: historical foundations, current research, future developments. Journal of Purchasing and Supply Management, 25(2), 99-104.
  • Templar, S., Hofmann, E., & Findlay, C. (2020). Financing the end-to-end supply chain: A reference guide to supply chain finance. Kogan Page Publishers (book).
Module 2: Financial Processes in Supply Chains (7.5 hours) 5-9 Procure-to-Pay (P2P) Cycle
  • Step 1: Order
  • Step 2: Order Approval
  • Step 3: Order Sent to Vendor/Order Shipped
  • Step 4: Order/Invoice Received
  • Step 5: Invoice Approved
  • Step 6: Invoice Sent to Accounts Payable (AP) for Payment
Order-to-Cash (O2C) Cycle (Part I)
  • Order Management
  • Credit Management
  • Fulfilment
  • Shipping
Order-to-Cash (O2C) Cycle (Part II)
  • Invoicing
  • Accounts Receivable (AR)
  • Payment Collections
  • Data Management and Reporting
  • Kääriä, E., & Shamsuzzoha, A. (2023). Improvement of an order-to-cash business process by deploying lean six sigma tools: a case study. International Journal of Productivity and Performance Management, 73(11), 161-189.
  • Case Study; GEP Helps Streamline P2P Process for Large US Bank
  • Case Study: myInvenio Process Mining Order to Cash case study
  • Case Study: Reclaiming order-to-cash efficiency
Module 3: Managing Supplier Financial Risk and SCF Techniques (7.5 hours) 10-14 Managing Supplier Financial Risk with Pre-Shipment Finance (Part I)
  • Trade Finance Instruments
  • APD (Advance Payment Discount) and BPOF (Buyer-Backed Purchase Order Financing)
  • Centralized and Decentralized Benchmarks
  • Financing with APD or BPOF
Managing Supplier Financial Risk with Pre-Shipment Finance (Part II)
  • Interactions Between APD and BPOF
  • Single Financing Equilibrium and Dual Financing
  • Numerical Examples and Managerial Implications
SCF Techniques (Part I)
  • Receivable Discounting
  • Forfaiting
  • Factoring
  • Payables Finance
SCF Techniques (Part II)
  • Loan or Advance Against Receivables
  • Distributor Finance
  • Loan or Advance Against Inventory
  • Zhao, L., Huchzermeier, A., Zhao, L., & Huchzermeier, A. (2018). Managing supplier financial risk with pre-shipment finance instruments. Supply Chain Finance: Integrating Operations and Finance in Global Supply Chains, 121-142. (Paid)
  • Book: Supply Chain Finance; Integrating Operations and Finance in Global Supply Chains by Lima Zhao , Arnd Huchzermeier
  • Zhao, L., & Huchzermeier, A. (2019). Managing supplier financial distress with advance payment discount and purchase order financing. Omega, 88, 77-90.
Module 4: Research and Advanced Applications in SCF (6 hours) 15-18 Research Overview of Operations-Finance Interface (Part I)
  • Operations Finance Interface
  • Identifying Prestigious Papers
  • Citation and Page Rank Analysis
  • Evolution of Research
Research Overview of Operations-Finance Interface (Part II)
  • Operational Hedging and Financial Flexibility
  • Impact of Operational Effectiveness on Financial Performance
  • Joint Financing and Capacity Inventory Decisions
Optimizing Cash Flow for Supply Chain Coordinators
  • Cash Flow Optimization Using Mathematical Programming
  • Modelling Uncertainty with Robust Optimization
  • Zhao, L., Huchzermeier, A., Zhao, L., & Huchzermeier, A. (2018). Research overview of operations-finance interface. Supply Chain Finance: Integrating Operations and Finance in Global Supply Chains, 143-183.
  • Wuttke, D. A., Blome, C., & Henke, M. (2013). Focusing the financial flow of supply chains: An empirical investigation of financial supply chain management. International journal of production economics, 145(2), 773-789.
Module 5: Emerging Trends and Integration of SCF (3 Hours) 19-20 Emerging Trends and Risks in SCF
  • Cyber Risks in SCF
  • Fragmentation in the SCF Ecosystem
  • Biomimicry in SCF: Learning from Natural Ecosystems
Overview and Integration of SCF Concepts
  • Summary of Key Topics Discussed
  • Group Presentations on SCF Solutions
  • Feedback and Discussion
  • Kucukaltan, B., Kamasak, R., Yalcinkaya, B., & Irani, Z. (2024). Investigating the themes in supply chain finance: the emergence of blockchain as a disruptive technology. International journal of production research, 62(22), 8173-8192.
  • Pournader, M., Kach, A., & Talluri, S. (2020). A review of the existing and emerging topics in the supply chain risk management literature. Decision sciences, 51(4), 867-919.