Instead, logistics managers are using BI technologies to find real meaning in their sea of numbers—and take actions that boost supply chain efficiency and effectiveness. More to the Story: Regardless of its definition, many companies today are embracing business intelligence tools.
Under SCF, suppliers sell their invoices or receivables at a discount to banks or other financial service providers, often called factors. In return, the suppliers get faster access to the money they are owed, enabling them to use it for working capital, while buyers generally get more time to pay.
Instead of relying on the creditworthiness of the supplier, the bank deals with the buyer.
SCF solutions differ from traditional supply chain programs to enhance working capital, such as factoring and payment discounts, in two ways: SCF connects financial transactions to value as it moves through the supply chain. SCF encourages collaboration between the buyer and seller, rather than the competition that often pits buyer against seller and vice versa.
For example, the buyer will attempt to delay payment as long as possible, while the seller seeks to be paid as soon as possible. Supply chain finance works especially well when the buyer has a better credit rating than the seller and can therefore access capital at a lower cost. The buyer can leverage this advantage to negotiate better terms from the seller, such as an extension of payment terms, which enables the buyer to conserve cash or use it for other purposes.
The seller benefits by accessing cheaper capital, while having the option to sell its receivables to receive immediate payment. A typical extended payables transaction works as follows. Y supplies the goods and submits an invoice to X, which X approves for payment on standard credit terms of 30 days.
The financial institution will remit the invoiced amount less a discount for early payment to supplier Y. In view of the relationship between company X and its financial institution, the latter may extend the payment period for a further 30 days.
Company X therefore has obtained credit terms for 60 days, rather than the 30 days provided by supplier Y, while Y has received payment faster and at a lower cost than if it had used a traditional factoring agency.
SCF generally involves the use of a technology platform in order to automate transactions and track the invoice approval and settlement process from initiation to completion.Tesla Supply Chain – HOW IT’S MADE TESLA. Only time will tell if the Tesla Supply Chain will become one of the best in the world.
This video takes you from the start of building the Tesla factory to all the innovations inside. Information sharing serves as an essential approach for the survival of enterprises and enabler of supply chain integration.
Nowadays, with the advancement in information and communication technology, information sharing has become more conceivable. Supply chain optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain.
This includes the optimal placement of inventory within the supply chain, minimizing operating costs (including manufacturing costs, transportation costs, and distribution costs). This often involves the application of mathematical modelling. Lean Supply Chain Management.
While the standards of typical supply chain management are known to most business owners, a new wave of lean supply chain management is becoming more popular for a variety of reasons. Vivek Sehgal I work with the world's best supply chain solutions company as a Senior Director for development of new applications.
My role is to design supply chain solutions that will continue to lead the industry for years to come, and continue positioning my company for success. 1 SCOR: Supply-Chain Reference Model ILIM, INSTITUTE OF LOGISTICS AND WAREHOUSING ainia, Technological Centre 1.
INTRODUCTION The Supply Chain Operations Reference – model (SCOR) has been developed and endorsed.