Financial Supply Chain Management

Supply Chain Financial Management

Supply Chain Management Definition

All the facilities, functions and activities with the flow and transformation of goods and services will be held from raw materials to customers, and related information flows of an integrated process of “source”, “make” and “Deliver” ProdukteDas system suppliers, manufacturers, transporters, distributors and suppliers are turning to raw materials to finished products and supply of these products available to customers

part of the supply chain, which is the result of the manufacturing process, sometimes known as network marketing

is

types of supply chain

1st

physical supply chain

Financial Supply Chain 2

physical supply chain refers to products such as described above between the original supplier to end customer.

Financial Supply Chain refers to the movement of funds from the physical supply chain

FSCN integration with the physical supply chain

Financial Supply Chain Integration chain physical supply in many places, with activities largely to payments and loans.

In general, banks offer these services for some time other agencies also

SCM Goals

SCM is the efficient integration of suppliers, factories, warehouses and stores that merchandise is produced and distributed.

p ‘hit in the right quantity

at the right time

at

transformed customers and supply chain processes, but that the performance of the finance team has changed little. Although some companies have succeeded in improving the performance of their financial processes fundamental financial functions are still neglected in many companies and day sales outstanding (DSO) and requirements for working capital is very high in several industries. The scoreboard rolling for 2008 by CFO Magazine shows that there are significant differences between high performers and low in an industry. In the automotive industry, for example, was the best result in DSO 44, while the lowest score was over 241-five times lower than the sector median of 47 years. Search the Hackett Group shows that costs continue to consume the Treasury more than 1% of turnover in many companies, CFOs and the struggle with poor visibility of their daily cash flow

During of unprecedented economic uncertainty and rising expectations Shareholders set each function to closer scrutiny than ever, the financing function should lead the economy, did not inhibit the. Financial Supply Chain Management (FSCM) can help companies eliminate some inefficiencies in business processes to be effective.

definitions of the Financial Supply Chain Management

There are several definitions of supply chain

financial term, which appeared in 2000 and 2001. According to market research firm Killen & Associates (2001), the Financial Supply Chain “is parallel to the physical supply chain or hardware and provides all activities in connection with transactions in the cash flow of about customer’s initial pass through reconciliation and payment to the seller. ” The Aberdeen Group, another market research firm, calls the financial supply chain is a series of B-to-B linked to intra-and inter-enterprise start-financial transaction processes and functions [that] before the buyer to register and contact the supplier and go to the settlement process. “Both definitions focus on different topics. Killen focuses on the parallels between the physical supply chain and financial practices, and highlights some of the collaborative nature of cash flow management and financial supply chain shows that the chain financial value is not limited to the inner wall of a business, but includes communication and cooperation with business partners

The two definitions of vision based on the processes of financial supply chain, which is just below the center, but go in many respects, the statements did not go far enough:

You

accent specific cooperation between companies, suppliers and customers, and they do not take account of other major trading partners within the financial supply chain, such as banks.

mainly describe the status quo, and not focus on the different dimensions of optimization of business processes within the financial supply chain.

The motivation and the key to effective financial supply chain are not obvious.

Another definition that encompasses these three aspects is: Financial Supply Chain Management (FSCM) is a comprehensive and complete planning and control of all financial transactions that are relevant within an enterprise and communicate with other companies. The aim of the FSCM is transparency and the level of automation to improve business processes throughout the supply chain finance. The goal is to save litigation costs and working capital of the company. This definition does not take into account whether the financial supply chain begins and ends as it has in fact also the process of analysis that are not directly to a business process are not yet Financial Supply Chain

Key Performance Indicators

<> It are several indicators that are relevant to measuring the management of financial supply chain. An important indicator is the cash flow cycle that defines the period of delivery by suppliers, for recovery of advances to customers (Figure 1) . It is time for the company to recover funds invested in the required form of cash. The cash cycle can be broken in the operating cycle is the period between delivery providers and the effective collection of debts and the cycle of cash flows, the time elapsed between payment in cash for the collection of stocks and treasury debts. more the cycle of cash flows, plus working capital requirement of a business, so that reducing the cash flow cycle will be activated immediately cash

Central

cycle cash flow, we distinguish the following parameters

days in inventory : This is the time between delivery of the goods and the supplier’s invoice and the sale of the goods and invoice the customer. It describes the average number of days that a company’s product is in stock before be sold. This is the subject of all activities related to management of traditional supply chain Days liabilities : This is the length of time between the delivery of goods and invoice the supplier and the actual payments for inventory. This ratio represents the average time it takes to pay suppliers. The parameters of the opinion that the debts of a company and is an important measure of the concentration on the debtor their efforts to optimize the purchase to pay cycle Days sales outstanding . This is the time between the sale of goods and invoice the customer and the actual date of payment of the customer. This ratio measures the average number of days, companies need to collect revenue after a sale was made. A high number means that the company’s DSO sell its customers on credit and taking longer to collect money. Figure is an important figure for creditors, the optimization of the Order cycle days on cash assets: This is the time between the sale of the goods and invoice the customer and the expected date of delivery. The key performance indicator p is similar to DSO, and indicates the average time in days that receivables are outstanding. Days of receivables can also be used as a DSO best that the company would collect all debts before maturity

In the cycle of cash flow is reduced there is potential for the two days the number of days of inventory outstanding. Days of the liability can be increased but should be closely monitored to ensure that risks to supplies . Days of receivables may be reduced by improving the collection of money. Another important indicator of efficient management of financial supply chain is working capital, which is a balance of metrics and some some of the species. The net current assets is calculated as current assets less rel = currentliabilititena <"nofollow" onclick = "javascript: _gaq.push ('_trackPageview [' / outgoing / href article_exit_link']);" = "http://www.qfinance.com / dictionary / current-liability" alt = "Look in the dictionary word QFINANCE"> and is a measure of the liquid reserve and solvency in the short term an undertaking to comply with the provision of risks and uncertainties. A major objective of financial management Supply Chain Management is the optimization of the