Measuring Risks of Confirming Warehouse Financing from the Third Party Logistics Perspective

Abstract

Confirmation warehouse financing is an important model in supply chain finance. This type of financing has special characteristics due to the existence of the reverse repurchase link, and it increases the risk commitment of the core enterprise at a certain level. Previous research on supply chain financial risk mostly settled in 'all-industry, multi-model', ignoring the special risks of single mode. To supplement the vacancies in the current research, the special risks of supply chain finance should be identified under a single model. On this basis, a measurement index system for confirmation warehouse financing risk is created. The article uses a Back Propagation (BP) neural network to build a Third Party Logistics (3PL) perspective of the risk measurement model for confirmation warehouse financing. The said network is combined with the 24 sets of actual cases from ZY Logistics. MATLAB is used to train the sample data. Results show that the absolute errors-0.042998, −0.011102, 0.020514 and 0.039448-between the training value and the predicted value are smaller than the preset error value. Among the 24 cases, high-risk businesses reached 41.7%, whereas low-risk businesses only accounted for 29.2%. The ZY enterprise confirms that warehouse financial business risk is high, and this situation should be revised. Research shows that the risk measurement indicator system has good risk prediction ability. This study establishes and verifies the rationality of the risk measurement index system and provides a reliable reference for 3PL risk aversion in supply chain finance.Sustainability 2019, 11, 6573 2 of 24 the model reduces the financing costs of enterprises, alleviates the pressure on corporate funds, increases product sales, and brings new profit margins for banks and third-party logistics (3PL) to achieve a multi-win. In addition, a retailer's inventory pressure is largely reduced, and the promotion and sales of goods are enhanced due to the existence of a reverse repo channel in the confirming warehouse financing model. As core companies in the confirming warehouse financing model are concerned about the funding problems of downstream retailers, guarantee loans for retailers increase the risks for supply chain finance. As a result, several SMEs resort to information hiding and information fraud and pledge shortages to obtain loans. Each node company seeks to maximize its interests as a direct participant in supply chain finance. This scenario can lead to lack of cooperation, information asymmetry, and untimely feedback among enterprises. These conditions hinder the normal procedures of confirming warehouse financing. Introducing 3PL as a coordination and regulator of supply chain finance circumvents various financing risks. Therefore, exploring the key factors influencing the risk of confirmation warehouse financing, constructing an effective early warning model, and reducing the probability of risk are of practical significance to promote the stable development of supply chain finance.

The Impact of the Scale of Third-Party Logistics Guaranteeing Firms on Bank Credit Willingness in Supply Chain Finance: An ERP Study

“…Generally, the 3PL firms that provide guarantees of supply chain finance is relatively stronger and larger enterprises ( Abbasi et al, 2017 ; Wang and Wang, 2019 ). Firm size has a positive relationship of supply chain finance practices ( Uyar, 2009 ; Ali, 2021 ).…”

“…Guarantor financing is an effective way to resolve financing difficulties for SMEs ( Randall and Farris, 2009 ; Martinez et al, 2020 ). Third-party logistics (3PL) guarantor financing has become one of the main methods to overcome such difficulties ( Wang and Wang, 2019 ; Chakuu et al, 2020 ) by helping reduce banks’ risk perception and enhance their credit willingness. With the good credit of guaranteeing logistics firms’, SMEs in the same supply chain are more likely to obtain bank loans.…”

The Performance Evaluation of Logistics Enterprises in Online Supply Chain Finance Based on Analytic Hierarchy Process

“…At present, there are many related research studies on SCF, such as the application model of SCF, participants, risks, and preventive measures [21][22][23]. Wang and Wang [24] took the confirmed warehouse financing model in various models of SCF as an example and studied the financing risk in this model. And from the perspective of third-party logistics companies, they used the back propagation (BP) neural network model to analyze and measure the risk of the confirmed warehouse financing model.…”

Implementation of LEAN Warehousing to Reduce Waste in Warehouse CV.X

“…In today's modern and highly competitive industry, there is tight competition that leads to an increased role of warehousing functions in production activities, especially in planning and managing warehouse systems. Warehousing has a crucial function, namely storing products (Rizkya et al, 2021), anticipating fluctuating demand patterns (Nurhasril et al, 2023), maintaining price stability (Wang & Wang, 2019), preserving product quality (Kamali et al, 2019), ensuring product securities, especially for food (Prananingtyas & Zulaekhah, 2021;Van Geest et al, 2021), and serving as a place for consolidation among buyers (Ding & Kaminsky, 2020;Lin et al, 2020). One of the actions that companies can take is to analyze and minimize waste that occurs in the warehouse (Purba et al, 2021).…”