Supply Chain Concepts: Supply Chain Finance (SCF)

Introducing Supply Chain Finance (SCF)

Aberdeen Group defines Supply Chain Finance (SCF) as “a combination of Trade Financing provided by a financial institution, a third-party vendor, or a corporation itself, and a technology platform that unites trading partners and financial institutions electronically and provides the financing triggers based on the occurrence of one or several supply chain events.”

The overall goal of SCF is to optimize Working Capital throughout the end-to-end supply chain for both buyers and sellers.

The features and benefits of Supply Chain Finance include:
• Helping the buyer optimizes the supply chain by offering bank-assisted Open Account processing, buyer-backed and direct seller financing, Purchase Order and Invoice Data Management, and data matching across Open Account, bank assisted Open Account and Letters of Credit
• Meeting the seller’s export finance needs for pre-shipment, shipment and post shipment financing from the seller’s bank for Export Letters of Credit and Outward Collections, and from the buyer’s bank for bank-assisted Open Account and Import Letters of Credit
• Providing liquidity to sellers through receivables financing

Key elements of SCF solutions include :
• Purchase Order / Invoice Data Management,
• Bank assisted Open Account,
• Open Account Payment,
• Export / Seller Finance
• Buyer side finance.

Regards

Mihir Kumar Jhaveri, PMP, CSCM

Senior Manager

http://supplychainimprovement.com