Practical Finance for Operations and Supply Chain Management by Alejandro Serrano, Spyros D. Lekkakos: 9780262043595 | PenguinRandomHouse.com: Books (2024)

FAQs

What is the finance of supply chain management? ›

What is Financial Supply Chain Management? Financial supply chain management (FSCM) is the discipline of considering your financial processes as a whole rather than as individual processes. The complete business process includes the procure-to-pay cycle, working capital management, and the order-to-cash cycle.

Inventory management: Finance and Supply Chain Operations can work together to optimize inventory levels, reducing carrying costs and improving cash flow. The KPI could be inventory turnover, and the incentive could be a shared bonus based on the amount of inventory saved by optimizing inventory levels.

CFOs and financial leaders serve as strategic partners in bolstering supply chain resilience. Their expertise in financial analysis, risk management, and strategic planning is critical for navigating the volatile landscape and ensuring the smooth flow of goods and services.

Supply Chain Manager Salary and Career Growth

Entry-level professionals (those with less than one year of experience) earn an average total compensation of approximately $65,000, while more experienced supply chain managers (those with between 10 and 20 years of experience) earn closer to $94,000.

Prior to the FASB's rule taking effect, some of the world's biggest companies, including Coca-Cola, Boeing, AT&T, General Electric, Kimberly-Clark, General Motors and Keurig Dr Pepper, were already disclosing details about their supply chain financing programs.

Whereas the financial supply chain is the flow of money from the customer back up the chain to the supplier. Supply chain finance (SCF) refers to the techniques and practices used by banks and other financial institutions to manage the capital invested into the supply chain and reduce risk for the parties involved.

Whereas trade finance is a form of loan or credit that the bank extends, supply chain finance is merely funding the receivables based on the invoices and the buyer's creditworthiness.

The main benefit of supply chain finance is that the buyer does not pay any fee to extend its payment terms and the supplier only pays a small discount if they want to get paid early.

Financial flow involves the movement of money from the customer to the supplier. When the customer receives the product and verifies it, the customer pays and the money travels back to the supplier. Sometimes the finances flow in the other direction (from supplier to customer) in form of debit.

What is financial measures in supply chain management? ›

According to the obtained results, cost, ROA, sales, asset turnover, ROI, market share, inventory turnover, profit margin, revenue growth, EVA and cash-to-cash cycle are the most common metrics of financial performance measurement.

From a financial perspective, supply chains play a pivotal role in determining the Cost of Goods Sold (COGS). The more efficient the supply chain, the lower the COGS, leading to higher gross margins.

Financial flow involves the movement of money from the customer to the supplier. When the customer receives the product and verifies it, the customer pays and the money travels back to the supplier. Sometimes the finances flow in the other direction (from supplier to customer) in form of debit.

Manage budgeting, forecasting, and financial reporting processes for the Integrated Supply Chain organization. Prepare and present financial reports to senior leadership and stakeholders. Ensure compliance with accounting standards and regulatory requirements.

Capital pressure, order fulfillment cycle, and inventory turnover cycle are closely related to the cash-to-cash cycle. As such, we include them into our conceptual model as the main drivers of SCF adoption.