May 11, 2013

FINANCIAL SUPPLY CHAIN MANAGEMENT


Most of the time we attribute supply chain management to logistics, but what if supply chain management is used in the field of finance. Financial Supply Chain Management does exactly that. It is the expansion of techniques developed in the fields of finance and financial risk management into the field of supply chain management. Financial Supply Chain Management (FSCM) refers to a specific set of solutions and services to expedite the flows of money and data between trading partners - that is buyers and suppliers, along the supply chain.


RISE OF FINANCIAL SUPPLY CHAIN MANAGEMENT

Globalization and increased competition has had a profound impact on the supply chain of both the big and small companies. This has led companies to keep larger inventories to prevent shortfall, ensure just-in-time deliveries and accept longer payment terms from the buyers. This has resulted in working capital problems for both the suppliers and buyers, as suppliers need to wait for the buyers to sell the product so as to get back their money. FSCM helps the company to improve their working capital financing, accelerate the cash flow to suppliers and connect supply chain events to financing decisions. The ultimate aim is to optimize working capital throughout the supply chain, reduce total supply chain costs and increase supply chain resilience.

May 02, 2013

REVERSE LOGISTICS IN RETAIL – BEST PRACTICES IN THE INDUSTRY


Reverse logistics - “the forgotten child of the Supply Chain” is gaining prominence in the market today. Previously, the organizations were not making use of reverse logistics. But today, reverse logistics is a key tool for value addition and growth strategy. With increasing customer awareness, it is not only important to deliver the goods to them but also to make sure that a return channel also exists. Thus, reverse logistics helps an organization in not only getting the goods back but also for repairs and redistribution.
Reverse logistics is defined by the council of management as “The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.”. In short the travel back from the customers end to the manufacturer is called as the reverse logistics- an invert of logistics. Reverse logistics includes return policy, product recall, repairs, repackaging, recycling, parts management, liquidation, disposition management and many more. It plays a very crucial role in the field of retail it helps in building brand loyalty and better customer experience.
At the time when the retail industry is facing losses to the tune of $40 billion due to sales returns, having reverse logistics can help build the profits as high as 15% with care. In addition to it (this) the reverse logistics also protects profits, gives customer loyalty, disposal benefits and maximize recovery rates. 

Source:UPS