Supply chain finance is not for everyone

2020 ◽  
Vol 50 (9/10) ◽  
pp. 775-807
Author(s):  
Viktor Hugo Elliot ◽  
Christiaan De Goeij ◽  
Luca Mattia Gelsomino ◽  
Johan Woxenius
Keyword(s):  
Supply Chain ◽  
Service Providers ◽  
Value Added ◽  
Case Study Methodology ◽  
Content Type ◽  
Operational Conditions ◽  
Supply Chain Finance ◽  
Transit Times ◽  
Resources And Capabilities ◽  
New Perspective

PurposeLogistics service providers (LSPs) have unique resources and capabilities that position them to deliver supply chain finance (SCF) solutions. The study aims to discuss and illustrate the necessary resources and process of value creation and capture of LSPs, potentially offering SCF solutions.Design/methodology/approachRelying on a theoretical framework, combining a resource-based view (RBV) with the literature on SCF, the authors apply an abductive case study methodology, including 11 interviews with representatives from four LSPs.FindingsThe main findings are as follow: (1) although an LSP has sufficient resources for value-added SCF solutions, it may not capture enough value to motivate realising them; (2) an LSP considering offering SCF should account for the interaction between its resources and cargo transit times, risk and regulatory restrictions and (3) future studies should distinguish between financing the logistics services and the moved products.Research limitations/implicationsThe authors contribute to the growing field of SCF research by analysing motives and barriers for LSPs to offer SCF service to their customers. Because none of our case companies decided to move beyond experimentation further research is needed on the resources and capabilities needed for LSPs to successfully venture into SCF.Practical implicationsThe study provides LSPs with clear indications of the difficulties involved when contemplating a move into SCF solutions and discusses the potential value of offering such services.Originality/valueDespite evidence of LSPs engaging in SCF in various industries, academic contributions do not go beyond operational conditions or quantification of benefits. The authors add evidence on how LSPs are currently evaluating the prominence of adding SCF to their value offerings, including a new perspective on resources, value generation and capture mechanisms.

Involving financial service providers in supply chain finance practices

2017 ◽  
Vol 18 (1) ◽  
pp. 42-62 ◽  
Author(s):  
Judith Martin ◽  
Erik Hofmann
Keyword(s):  
Supply Chain ◽  
Service Providers ◽  
Integrated Management ◽  
Value Added ◽  
Financial Service ◽  
Expert Interviews ◽  
Financial Flows ◽  
Content Type ◽  
Supply Chain Finance ◽  
Multi Method Approach

Purpose The purpose of this paper is the analysis of reasons to involve financial service providers (FSPs) in the integrated management of supply chain flows through supply chain finance (SCF) practices. In addition, service requirements are derived for FSPs in order to respond to company needs related to SCF practices. Design/methodology/approach The selected methodology represents a multi-method approach. First, a survey with 62 companies from Switzerland and ten expert interviews were applied to analyze company needs. Second, the study was complemented with a review of gray press, online offers and 11 expert interviews on the service offer of FSPs for managing supply chain flows. Findings The results derive company needs for an integrated management of supply chain flows. The company needs are matched with available service offer of FSPs. Based on this match quality gaps are identified and service requirements are derived. The results describe initial measures to close the quality gaps. Research limitations/implications This research primarily focuses on financial flows related to the working capital of companies thereby neglecting fixed assets. Practical implications The results provide companies with a structured process to analyze the value added of FSPs. FSPs can use the results to better match their service offer with company needs. Originality/value This research contributes to research on SCF by developing a structured process for analyzing the company needs for SCF practices as well as the value added of FSPs in offering these practices.

scholarly journals The impacts of supply chain finance initiatives on firm risk: evidence from service providers listed in the US

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hugo K.S. Lam ◽  
Yuanzhu Zhan
Keyword(s):  
Supply Chain ◽  
Multinational Corporations ◽  
Financial Risk ◽  
Service Providers ◽  
The United States ◽  
Political Connections ◽  
Firm Capabilities ◽  
Content Type ◽  
It Capability ◽  
Supply Chain Finance

PurposeThis study empirically investigates how supply chain finance (SCF) initiatives together with different firm capabilities and resources (i.e. information technology (IT) capability, operational slack and political connections) affect the financial risk of service providers.Design/methodology/approachThis study collects secondary longitudinal data to test for a direct impact of SCF initiatives on service providers' financial risk. It further investigates the moderating effects of the service provider's IT capability, operational slack and political connections. Additional tests and analytical strategies are performed to ensure the robustness of the results.FindingsThe findings indicate that SCF initiatives help service providers mitigate financial risk. The risk reduction is greater for service providers with higher IT capability, operational slack and political connections, but the last factor applies only to multinational corporations, not domestic companies.Research limitations/implicationsThe data used in this research is limited to SCF service providers publicly listed in the United States, which may restrict the generalisability of the findings. Nonetheless, the research urges scholars to focus more on the financial risk implications of SCF in different market contexts.Practical implicationsThis study encourages service providers to embrace the power of SCF initiatives for mitigating financial risk and allows them to evaluate their SCF investments in light of different firm capabilities and resources.Originality/valueThis is the first study investigating the impacts of SCF initiatives and various firm capabilities and resources on service providers' financial risk. The empirical findings provide important implications for future research and practices.

Understanding SME suppliers' response to supply chain finance: a transaction cost economics perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christiaan de Goeij ◽  
Luca Mattia Gelsomino ◽  
Federico Caniato ◽  
Antonella Maria Moretto ◽  
Michiel Steeman
Keyword(s):  
Supply Chain ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Service Providers ◽  
Secondary Data ◽  
Minor Role ◽  
Self Awareness ◽  
Content Type ◽  
Supply Chain Finance ◽  
Qualitative Factors

PurposeReverse factoring (RF) is one of the most prevalent supply chain finance (SCF) solutions. This study challenges the view that suppliers accept financially attractive reverse factoring offers (RFOs) and reject financially unattractive ones. Specifically, it focuses on small and medium enterprise (SME) suppliers and how transaction cost economics (TCE) factors affect their decision.Design/methodology/approachThe authors study eight cases of RFOs, interviewing suppliers, buyers and financial service providers (FSPs) and using several sources of private and publicly available secondary data.FindingsIn five out of eight RFOs, suppliers either accepted unattractive offers or rejected attractive ones. Bounded rationality and opportunism seem to explain such misalignment, while asset specificity and frequency play a minor role in decisions.Research limitations/implicationsThe study shows the need for further investigation linking analytical assessment of SCF benefits with qualitative factors.Practical implicationsSME suppliers cannot assume an RFO will benefit them. They must critically evaluate their buyers' offers, ideally with self-awareness towards how the abovementioned factors might affect their decisions. For buyers and banks, this study gives clear insights on how to approach SME suppliers to avoid rejection of financially attractive RFOs.Originality/valueThis contribution analyses financial attractiveness of RFOs in conjunction with qualitative factors, including rejected RFOs and without assuming that RFOs are financially attractive for suppliers. This is original and relevant for both research and practice, since it extends the understanding of the supplier response to RFOs, thanks to the consideration of TCE factors.

Big data analytics in digital platforms: how do financial service providers customise supply chain finance?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hua Song ◽  
Mengyin Li ◽  
Kangkang Yu
Keyword(s):  
Big Data ◽  
Supply Chain ◽  
Data Analytics ◽  
Service Providers ◽  
Big Data Analytics ◽  
Financial Service ◽  
Content Type ◽  
Digital Platforms ◽  
Supply Chain Finance ◽  
Potential Risks

PurposeThis study examines the role of financial service providers (FSPs) in assessing the supply chain credit of small and medium-sized enterprises (SMEs) and how they help SMEs obtain supply chain finance (SCF) through an established digital platform using big data analytics (BDA).Design/methodology/approachThis study conducted data mining analysis on the archival data of China's FSPs in the mobile production industry from 2015 to 2018, using neural networks in the first stage and multiple regression in the second stage.FindingsThe findings suggest that digital platforms sponsored by FSPs have a discriminative effect based on implicit BDA on identifying the quality and potential risks of borrowers. The results also show that tailored information utilised by FSPs has a supportive effect based on explicit BDA in helping SMEs obtain financing.Originality/valueThis study contributes to the emergent research on BDA in supply chain management by extending the contextual research on information signalling and platform theory in SCF. Furthermore, it examines the distinctive financing decision models of FSPs and provides a solution that addresses the information deficiency and overload of both lenders and borrowers and plays a certain reference role in alleviating the financing problems of SMEs.

Supply chain integration and its impact on sustainability

2018 ◽  
Vol 118 (9) ◽  
pp. 1749-1765 ◽  
Author(s):  
Mingu Kang ◽  
Ma Ga (Mark) Yang ◽  
Youngwon Park ◽  
Baofeng Huo
Keyword(s):  
Supply Chain ◽  
Structural Equation ◽  
Management Practices ◽  
Social Performance ◽  
Supply Chain Integration ◽  
Equation Modeling ◽  
Content Type ◽  
New Perspective ◽  
And Performance ◽  
And Function

Purpose The purpose of this paper is to examine the role of supply chain integration (SCI) in improving sustainability management practices (SMPs) and performance. Design/methodology/approach Based on data collected from 931 manufacturing firms in multiple countries and regions, the authors conducted a structural equation modeling analysis to test the proposed hypotheses. Findings The findings suggest that supplier and customer integration are vital enablers for both intra- and inter-organizational SMPs. The results also reveal that both intra- and inter-organizational SMPs are significantly and positively associated with sustainability performance (i.e. economic, environmental and social performance) and function as complements to jointly enhance environmental and social performance. Originality/value This study incorporates SCI into the sustainability literature, providing a new perspective on sustainability and supply chain management research.

Service supply chain: strategic interaction and relationship value

2016 ◽  
Vol 31 (5) ◽  
pp. 611-624 ◽  
Author(s):  
Hua Song ◽  
Kangkang Yu ◽  
Samir Ranjan Chatterjee ◽  
Jingzi Jia
Keyword(s):  
Supply Chain ◽  
Manufacturing Industry ◽  
Service Providers ◽  
Strategic Interaction ◽  
Mediating Effect ◽  
Content Type ◽  
Business Context ◽  
Service Supply Chain ◽  
Relationship Value ◽  
Chinese Manufacturing Industry

Purpose The purpose of this paper is to empirically investigate the linkages between strategic interaction and relationship value, with a variety of co-creating value strategies as conceptual mediators. Design/methodology/approach This study reports on a field survey conducted in the Chinese manufacturing industry. A total of 180 questionnaires were sent to customers of service providers, and 120 valid responses were received, representing a response rate of 66.7 per cent. The data were then analyzed by using a number of statistical tools. Findings The results suggest that strategic interaction leads to a positive effect on the relationship value without any regard to the size of the customer. However, the mediating effect of product-based service is more significant for large-size customers, whereas the mediating effect of integrated managerial service is more significant for medium- and small-size customers. Originality/value This study explores how value might be created in a business-to-business context in a service supply chain from a relationship marketing perspective. It distinguishes product-based service and integrated managerial service as co-creating value strategies and further clarifies the different mechanisms underlying their relationships with strategic interaction between service supplier and customer. In particular, this study suggests that although strategic interaction may yield superior relationship value, the size of the customers will determine what kind of co-creating strategies would be preferred.

scholarly journals Framework for successful supply chain implementation in healthcare area from provider’s prospective

2018 ◽  
Vol 12 (2) ◽  
pp. 135-145 ◽  
Author(s):  
Ik-Whan Kwon ◽  
Sung-Ho Kim
Keyword(s):  
Health Care ◽  
Supply Chain ◽  
Inventory Management ◽  
Health Care Providers ◽  
Management Practices ◽  
Cost Of Care ◽  
Care Providers ◽  
Financial Health ◽  
Content Type ◽  
Supply Chain Finance

Purpose This paper aims to explore avenue where suppliers and manufacturers are aligned with health-care providers to improve supply chain visibility. Supply chain finance is explored to link suppliers/manufacturers with health-care providers. Design/methodology/approach Existing literature on supply chain visibility in health care forms a basis to achieve the study purpose. Alignment calls also for financial health where supply chain partners’ working capital is readily available to execute joint supply chain plan. Findings There is a disjoint in supply chain alliance between suppliers/manufacturers and providers where providers are unable to trace the origin of supplies. Quality care suffers and cost of care rises as providers search for supplies on an emergency basis. This paper provides a framework where solution can be formulated. Research limitations/implications Suppliers/manufactures form a direct strategic alliance with providers where product visibility enables health-care providers with a better patient management with lower cost of supplies. Inventory management and logistics cost will be lowered as better planning/forecasting is in place. This paper does not call for testing any hypothesis. Perhaps, next move along this line will be to investigate financial health of supply chain partners based on supplier relationship management practices. Originality/value This paper proposes health-care supply chain as an alternative solution to achieve the following twin purposes: controlling the cost while improving quality of care through supply chain finance. As far as we know, this study is the first attempt to achieve the goals.

scholarly journals Environmental alignment between logistics service providers and shippers – a supply chain perspective

2020 ◽  
Vol 31 (3) ◽  
pp. 575-605
Author(s):  
Maria Huge-Brodin ◽  
Edward Sweeney ◽  
Pietro Evangelista
Keyword(s):  
Supply Chain ◽  
Stakeholder Theory ◽  
Success Factors ◽  
Service Providers ◽  
Three Dimensional ◽  
Content Type ◽  
Study Approach ◽  
Logistics Service ◽  
Sustainable Logistics ◽  
Logistics Service Providers

PurposeVarious suggested paths for greening logistics and supply chains often address the specific perspectives of single supply chain actors. Drawing on stakeholder theory, the purpose of this paper is to develop a deeper understanding of the alignment between logistics service providers (LSPs) and shippers in the context of adopting more environmentally sustainable logistics practices.Design/methodology/approachWith a case study approach, a dual perspective is taken in which both LSPs and shippers were researched. The cases comprise eight LSPs and six shipper companies in Sweden, Italy and Ireland. Information was first analysed in relation to levels of environmental awareness, customer requirements and provider offerings and critical success factors (CSFs) and inhibitors. In a second step, the findings were analysed using stakeholder theory.FindingsLSPs demonstrate higher ambition levels and more concrete offerings compared to shippers' requirements for green logistics services. Paradoxically, customers are an important CSF and also an inhibitor for both LSPs and shippers. Both LSPs and shippers perceive financial factors and senior management priorities as important CSFs. The application of stakeholder theory helps to illuminate the importance of the many secondary stakeholders vs that of one or a relatively small number of primary stakeholders.Originality/valueThe three-dimensional analysis of environmental alignment between LSPs and shippers reinforces existing knowledge and provides new insights. A novel use of stakeholder theory in a supply chain context underlines its usefulness in research of this kind.

scholarly journals Burden or blessing in disguise: interactions in supply chain complexity

2018 ◽  
Vol 38 (2) ◽  
pp. 314-332 ◽  
Author(s):  
Hendryk Dittfeld ◽  
Kirstin Scholten ◽  
Dirk Pieter Van Donk
Keyword(s):  
Supply Chain ◽  
Food Processing ◽  
Raw Materials ◽  
Structured Interviews ◽  
Food Processing Industry ◽  
Dynamic Complexity ◽  
Processing Industry ◽  
Case Study Methodology ◽  
Content Type ◽  
Different Types

Purpose While systems theory explicitly considers interactions as part of a system’s complexity, supply chain complexity (SCC) is mostly conceptualized and measured as a linear summation of several aspects. The purpose of this paper is to challenge the general understanding by explicitly investigating interactions between and across different types (detail and dynamic) and levels (plant, supply chain, environment) of SCC. Design/methodology/approach An exploratory multiple case study methodology is adopted drawing on in-depth semi-structured interviews with respondents from eight manufacturing plants in the food processing industry. Findings On the one hand, it is found that different types add and increase overall SCC. On the other hand, the study also shows the opposite: interactions between detail and dynamic complexity can reduce the overall SCC experienced. Additionally, the findings highlight the specific food processing characteristics such as the variability of quality and quantity of raw materials that underlie interactions between types and levels of SCC. Originality/value This study adds to theory by empirically showing that interactions across and between types and levels do not automatically increase, but might also reduce SCC. As such, the findings contribute new detail to the concept of SCC: aspects of complexity do not necessarily add up linearly. Additionally, this study is one of the first to demonstrate how specific contextual aspects from the food processing industry relate to SCC.

Business strategy for environmental social governance practices: evidence from telecommunication companies in Malaysia

2019 ◽  
Vol 16 (2) ◽  
pp. 271-289
Author(s):  
Nur Syuhada Jasni ◽  
Haslinda Yusoff ◽  
Mustaffa Mohamed Zain ◽  
Noreena Md Yusoff ◽  
Nor Syafinaz Shaffee
Keyword(s):  
Business Strategy ◽  
Service Providers ◽  
Value Added ◽  
Telecommunications Industry ◽  
Survival Strategies ◽  
Business Strategies ◽  
Economic Activities ◽  
Content Type ◽  
Social Governance ◽  
Telecommunications Companies

Purpose The present digital era has integrated the conventional telecommunications companies as service providers in this ever-competitive environment. Towards gaining business competitiveness, businesses are operated from the stance of dynamic business model that places focus on both economic activities and, more importantly, value-added benefits. One essential value embedded into business strategies refers to the aspect of sustainability in conjunction to environmental social governance (ESG). Within the context of Malaysia, ESG practices have been expected to grow rapidly in years to come, along with the vision of becoming a digital economy nation, by 2050. The continuous discussions appear to support the significance of implementing ESG practices amidst organizations, which in turn, could enhance a more sustainable economic growth for the country. Although many studies have probed into the dimensions of ESG, little attention has been given to the ESG practices incorporated into business strategy agenda. Design/methodology/approach This paper combed through the literature to retrieve the multi-dimensions of ESG concepts, as well as related in-depth insights into ESG disclosures amongst leading companies established in Malaysia. As for the research design, this study used the content analysis method and the ESG Grid as the benchmarking tool to explore superior commitments amongst its peers. Findings As a result, this study stumbled upon two major outcomes: the pattern of ESG disclosures in telecommunications industry and the approaches in implementing ESG practices in telecommunications companies. These two aspects appear essential to establish a competitive advantage, apart from addressing the issues raised by concerned stakeholders. Research limitations/implications Future studies may explore deeper into comprehending the ESG practices by using the interview method and incorporating other industry or arena. Practical implications The decisions made by the companies to invest in ESG practices mark the ability of a company in devising viable survival strategies within the industry. Originality/value Hence, this study offers several vital insights into the practical value to learn from the best experiences, aside from analyzing the current progress of ESG practices within the context of developing nation.

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