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.