Supply Chain Finance: Some Conceptual Insights, Essay Example

One important concept that I learned this term was the logistics of supply chain in relation to the flow of financial resources. The logistic for such an infrastructure depend greatly on the supply chain managers. Supply chain managers in turn rely heavily on the capital (financing) and budgeting: both are elements contingent upon investment and rely on the customer. The true infrastructure of even the most complicated supply chains depends solely on the former of these elements. Thus, a tope CEO and CFO (in particular the latter) must manage their infrastructure on the shaky ground of a customer’s commitment. This adjective holds especially true for new businesses. Therefore, infrastructure must rely on information that strengthens its “flow of financial resources” (Lasch&Janker, 2005, p. 1). This means that a supply chain manager must pay close attention to cash flow in order to be well informed about their business, and to make proper decisions in relation to this information: this is true on both a logistical as well as a financial level.

Other than basing decisions on cash flow, supply chain managers must approach their job with knowledge about inter-functional and interorganizational tasks, especially if they’re choosing to open a new chain. The problem in such a dynamic is that while supply chain managers may see opportunity for growth according to cash flow, board members may see such opportunity as unnecessary risk. Therefore there is a battle between the supply chain manager and board members (at least to some degree) in relation to logistics. It is fair to say that I learned that while a supply chain manager may look at economic opportunity through a micro-lens, board members look at it through a macro-lens. This difference is best explained by saying that a board member knows the, “internal and externalfinancial challenges to guide the economic output of supply chain activities” (Lasch&Janker, 2005, p. 2).while a supply chain manager may have “a profound understanding of all the levers laying in use of financingcomponents in the supply chain context” Either side must eventual come to the conclusion that what’s important is that they build up “cross-functional competences to surmount the firm-specific and interorganisationalsilos between”(Lasch&Janker, 2005, p. 2).

The manager’s perspective includes the possibility of risk or “supply chain misfits” (Wagner et al., 2012, p. 3). Wagner also interjects that such misfits account for nearly 10 billions USD per year in the carmaker industry. Thus, the saving grace of a supply chain manager is guidelines. The board member may not have specific guidelines but their data sets (acquired through the stock market) speak to their ability and knowledge in running a company. Something that I questioned in class was the absence of such across the board guidelines. It seems to me that it would behoove an industry based on patterns of customer preference, to adhere to some sort of set of rules in order to establish a more productive quarter, as Lasch&Janker (2005) states, “By developing an understanding of the impact of supply chain fit on performance, firms will be well on their way to build such guidelines and their own models for supply chain excellence” (p. 3).

Overall, the knowledge I gleaned from this course dealt with the importance of contingencies in a business world, and how to curtail misfits, as well as to apply gained knowledge appropriately for the highest benefit (customer, manager, board member). The potential for consequence by not adhering to details, facts, demands, etc. may have dire consequences. Over the course of time the supply chain design must be something that resonates at a tangible level to all parties.

References

Lasch, R., &Janker, C.G., (2005). Supply chain finance: some conceptual insights. Logistiks Management: pp. 203-214.

Wagner, S., Grosse-Ruyken, P., &Erhun, F. (2012). The link between supply chain fit and financial performance of the firm. Journal of Operations Management 774: 1-39.