Financing the global supply chain: Growing need for management action

Mathis, Franz; Cavinato, Joseph L.

doi:10.1002/tie.20373

Cited by 25 publications

(11 citation statements)

References 2 publications

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“…Several years later, according to [8] Gupta and Dutta (2011), with increasingly fierce competition, it becomes more important to improve the efficiency of working capital by using cash that is trapped in the financial supply chain (FSC). Mathis and Cavinato (2010) [9] argued that banks should play a more active role in the FSC to integrate the resources in the chain. Silvestro and Lustrato (2014) [10] showed that banks are key players that can offer alternative supply chain solutions in the FSC.…”

Section: Definition Of Supply Chain Financementioning

confidence: 99%

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Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

2018

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Supply chain finance has broken through traditional credit modes and advanced rapidly as a creative financial business discipline. Core enterprises have played a critical role in the credit enhancement of supply chain finance. Through the analysis of core enterprise credit risks in supply chain finance, by means of a ‘fuzzy analytical hierarchy process’ (FAHP), the paper constructs a supply chain financial credit risk evaluation system, making quantitative measurements and evaluation of core enterprise credit risk. This enables enterprises to take measures to control credit risk, thereby promoting the healthy development of supply chain finance. The examination of core enterprise supply chains suggests that a unified information file should be collected based on the core enterprise, including the operating conditions, asset status, industry status, credit record, effective information to the database, collecting related data upstream and downstream of the archives around the core enterprise, developing a data information system, electronic data information, and updating the database accurately using the latest information that might be available. Moreover, supply chain finance and modern information technology should be integrated to establish the sharing of information resources and realize the exchange of information flows, capital flows, and logistics between banks. This should reduce a variety of risks and improve the efficiency and effectiveness of supply chain finance.

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Section: Definition Of Supply Chain Financementioning

confidence: 99%

“…Arbitrary means that mathematical optimization for determining the weights was not used as it would have required a mathematical model to have been imposed on the structure of the model. Absolutely more important (8,9,10) (1/10, 1/9, 1/8) 2, 4,6,8…”

Section: Fuzzy Analytical Hierarchy Process (Fahp) Frameworkmentioning

confidence: 99%

Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

2018

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“…Such as financing and payments between large buyers and suppliers' conditions improve. The challenge banks and third-party service providers face the various needs of different customers from different industries.According to Wang (2016), supply chain finance (SCF) is based on its under remaining of the supply chain transaction structure and subtle elements of the exchange, through the control of a genuine material stream, business stream, data stream and capital stream with the center of the inventory network, gives liquidity to providers by utilizing their purchaser's higher credit rating to achieve value-added process.John Mathis and Cavinato (2010) findings show that many companies increasingly eager to explore the best practices in the management of global supply chain financing. Article refers to decentralized financial decisions resulted in low efficiency financing.…”

Section: -The Origination Of Supply Chain Financementioning

confidence: 99%

Supply Chain Finance: Generation and Growth of New Financing Approach

Abbasi¹,

Wang²,

Abbasi³

2017

JFBM

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As a new financing approach, supply chain finance is growing very rapidly, which makes it significant to understand supply chain finance more profoundly. This paper emphases on the literature study of supply chain finance over a decade and summarizes the generation and development of supply chain financein order to put theory into practice better. The growth phase of supply chain finance is further subdivided into four categories: supply chain finance based on overall supply chain, financing solution and technical support for supply chain finance and supply chain perspective from logistics service providers; enabling the researchers to understand it better for further development of this new financing approach.

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“…In order to integration the flow of physical goods and information, buyers and suppliers have to put the pressure on their banks to play a more proactive role in improving physical/financial supply chain (P/FSC) integration (Mathis and Cavinato 2010). Silvestro and Lustrato (2014) argued that financial institutions, usually banks, were key players in the economic activities of all supply networks in their capacity to provide alternate supply chain financing solutions.…”

Section: Scf Definitionmentioning

confidence: 99%

A credit risk assessment model based on SVM for small and medium enterprises in supply chain finance

Zhang

2015

Financial Innovation

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Background: Supply chain finance (SCF) is a series of financial solutions provided by financial institutions to suppliers and customers facing demands on their working capital. As a systematic arrangement, SCF utilizes the authenticity of the trade between (SMEs) and their "counterparties", which are usually the leading enterprises in their supply chains. Because in these arrangements the leading enterprises are the guarantors for the SMEs, the credit levels of such counterparties are becoming important factors of concern to financial institutions' risk management (i.e., commercial banks offering SCF services). Thus, these institutions need to assess the credit risks of the SMEs from a view of the supply chain, rather than only assessing an SME's repayment ability. The aim of this paper is to research credit risk assessment models for SCF. Methods: We establish an index system for credit risk assessment, adopting a view of the supply chain that considers the leading enterprise's credit status and the relationships developed in the supply chain. Furthermore, We conducted two credit risk assessment models based on support vector machine (SVM) technique and BP neural network respectly. Results: (1) The SCF credit risk assessment index system designed in this paper, which contained supply chain leading enterprise's credit status and cooperative relationships between SMEs and leading enterprises, can help banks to raise their accuracy on predicting a small and medium enterprise whether default or not. Therefore, more SMEs can obtain loans from banks through SCF.(2) The SCF credit risk assessment model based on SVM is of good generalization ability and robustness, which is more effective than BP neural network assessment model. Hence, Banks can raise the accuracy of credit risk assessment on SMEs by applying the SVM model, which can alleviate credit rationing on SMEs. Conclusions: (1)The SCF credit risk assessment index system can solve the problem of banks incorrectly labeling a creditworthy enterprise as a default enterprise, and thereby improve the credit rating status in the process of SME financing.(2)By analyzing and comparing the empirical results, we find that the SVM assessment model, on evaluating the SME credit risk, is more effective than the BP neural network assessment model. This new assessment model based on SVM can raise the accuracy of classification between good credit and bad credit SMEs. (3)Therefore, the SCF credit risk assessment index system and the assessment model based on SVM, is the optimal combination for commercial banks to use to evaluate SMEs' credit risk.

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Financing the global supply chain: Growing need for management action

Cited by 25 publications

References 2 publications

Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

Supply Chain Finance: Generation and Growth of New Financing Approach

A credit risk assessment model based on SVM for small and medium enterprises in supply chain finance

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