Page 41 - Linkline Summer 2016

the buyer, and the amount advanced can be as much as 100% of the invoice value compared to 70-80% in tradi- tional factoring.
Conclusion
Other SCF tools involve some variation of factoring or reverse factoring, depending on the collective needs of the buyer and supplier, and the capabilities of the bank. In fact, some banks are now offering online dashboards to manage these tools and the connected payments in a more ef cient, accessible and visual way. Such tools include:
Supply chain nance can be thought of as an amal- gamation of working capital management and supply chain collaboration. Although still in its infancy, this rich area is set to be a top priority for corporate treasur- ers and nancial services providers in immediate future. This joined-up thinking from all supply chain stakehold- ers promises to deliver some of the most notable inno- vations in supply chain management in recent years.
• Raw Materials Finance: enables the supplier to pur- chase raw materials for a production run.
These are just some of the issues coming to light un- der a research study being carried out by Institute of Technology Carlow. The researchers are still inviting participants from the manufacturing, logistics and - nancial services sectors to offer their insights into this emerging area.
• Purchase Order Finance: an advance on the value of a particular purchase order.
• Vendor Managed Inventory Finance: dampens the cash ow effect on the supplier of a consignment inventory policy.
For further information about the study or if you wish to participate, contact Colm Beckett at 059 917 5976 or colm.beckett@itcarlow.ie.
A further development of the supply chain finance concept involves logistics services providers. Hoffman (2005; 2009; 2011; 2013) argues that as logistics com- panies endeavour to offer a complete, end-to-end ser- vice, they are well placed to offer nancial services. This might involve nancing the goods they are employed to carry. It may be the case that the logistics companies do not carry enough cash to do this independently, but joint ventures between banks and logistics companies to expand their portfolios are already in the pipeline.
References
Hofmann E (2005) Supply Chain Finance: Some Conceptual Insights. [online] available: https://www.alex- andria.unisg.ch/export/DL/29025.pdf. [accessed: 28 September 2015].
Hofmann E (2009) Inventory Financing in Supply Chains: A Logistics Service Provider Approach. Interna- tional Journal of Physical Distribution & Logistics Management, Vol. 39(9) pp.716-740 [online] available: Em- erald Insight [accessed: 23 September 2014].
Hofmann E (2011) Natural Hedging As a Risk Prophylaxis and Supplier Financing Instrument in Automotive Supply Chains. Supply Chain Management: An International Journal, Vol. 16(2), pp. 128-141 [online] available: Emerald Insight [accessed: 24 March 2015].
Hofmann E (2013) Research on Supply Chain Finance: A Review, a Framework, and Suggestions for the Fu- ture. In: Past and Future in Logistics Research: proceedings of the 25th Annual NOFOMA Conference (2013) Chalmers University of Technology: Gothenburg.
Klapper L (2006) The Role of Factoring for Financing Small and Medium Enterprises. Journal of Banking & Finance Vol. 30(2006) pp. 3111–3130 [online] available: ScienceDirect [accessed: 3 September 2014].
More D, Basu P (2013) Challenges of Supply Chain Finance. Business Process Management Journal, Vol. 19(4) pp. 624-647 [online] available: Emerald Insight [accessed: 3 September 2014].
Steeman M (2014) The Power of Supply Chain Finance: How Companies Can Apply Collaborative Finance Models in their Supply Chain to Mitigate Risks and Reduce Costs. [online] available: http://www.windesheim. nl/~/media/ les/windesheim/research-publications/thepowerofsupplychain nance.pdf [accessed: 28 Sep- tember 2015].
THE CHARTERED INSTITUTE OF LOGISTICS & TRANSPORT 39
SUPPLY CHAIN FINANCE