The article proposes the use of Financial Supply Chain Management(FSCM) solution to enable the Chief Financial Officers (CFOs) to effectively manage their receivables and payables; forecast their company's financial future; and reduce their working capital needs. The article introduces the basic concepts of supply chain management and proposes the benefits of optimization of FSCM; deals with the integration of Physical Supply Chain Management (PSCM) and the FSCM; and discusses the possible limitations of FSCM.
Supply
Chain Management (SCM) has emerged as one of the most powerful business improvement
tools available today. Suppliers, manufacturers, distributors, retailers, and
a number of service organizations have discovered that they must transform their
operations or be beaten at the market place by competition that have more creative
and aggressive supply networks (Poirier, 1999).
Supply
Chain Management (SCM) is a relatively new concept, which involves the integration
of all value-adding components in the supply, manufacturing and distribution processes,
from the raw material extraction stage right through the various transformation
value-adding processes, to the distribution and end user consumption. The end
objective is to maximize customer service, compress lead-time, and reduce inventory.
Internet and Electronic Data Interchange (EDI) including using extended Enterprise
Resource Planning Solutions (ERP) facilitate quick communication of end-user demand
and requirement in terms of specification, style or taste as the case may be,
to the upstream stages of the supply chain network. (Basnet et al., 2003)
All
these years, a company could achieve more profits by outperforming its competition
or by outmaneuvering its suppliers or customers. Both the methods would produce
similar results therefore companies even in USA focused on adversarial bidding
with suppliers and use of marketing techniques with customers. In this situation,
cooperation between supply chain members was lost, as no one was recognizing the
supply chain as a Competitive unit (Lawrence, et al., 2003). |
