In a globalized economy, industrial value chains are becoming more complex, spanning more countries and more companies than ever before.
Yet, while flows of goods in the supply chain are increasingly integrated and optimized, the same cannot be said of the financial supply chain, where the credit crisis revealed structural weaknesses. The cost of finance is rising, while suppliers, especially SMEs and those located in developing countries, have difficulties obtaining the credit they need to grow.
To address these issues, which bring with them the risk of disrupted supply chains, large buyers are starting to manage the financial supply chain with the same integrated approach they apply to the physical supply chain.
Supply Chain Finance (SCF) covers a range of approaches and instruments that optimize the transactions, working capital and costs of those extended supply chains. New instruments significantly improve access to finance or reduce the need to finance by unlocking potential funding from within supply chains instead of relying on external creditors.