Supply Chain Finance Part.I

Effectively manage its cash flows are a necessity for the enterprise and supply chain comes from low mode "Finance". Suppliers and buyers, customers and banks are willing to embrace this new trend. Born in the United States and adopted by a U.S. economy again precursor.

"The battle to dominate the market will not be a battle of the enterprises, but supply chains" Professor Hau Lee, Stanford. Historically, the competitive advantages of controlling the supply chain has always been underestimated, companies led a fierce battle on products or services, not on processes. This vision has since been questioned, particularly in a context of economic globalization. After improving the physical flows and information, announces itself with a new phase control of financial flows.



Physical flows and information are controlled, that is there then to explore in terms of cost control in the supply chain? This question is now to all the major European companies. They were able to control the flow of goods in the 1980s and then turned to the mastery of information flows in the 1990s. Upon reaching maturity now puts companies in a door-to-false because it seems increasingly difficult to achieve further savings by adjusting these factors alone.

Any company seeking to improve its margin or risk is losing its competitiveness, to allow its competitors to gain market share and eventually disappear. Competition is particularly fierce and ultimately it extends to the whole world leaving more room for error. Pressure from large buyers of some of the multitude of small suppliers then climbs up a notch: they are asked to lower prices while extending payment periods. However, this configuration is jeopardizing the economic stability of suppliers that are no longer able to meet these requirements. The disappearance of suppliers threatens the very existence of buyers, recently aware of the situation.