Research On The Supply Chain Financing Of N Company In North America

Since the global financial crisis of 2008, the combination of constrained liquidity-shortage of available credit-combined with very low interest rates and the emerging maturity of technology like eInvoicing has created a perfect storm. While cash rich buyers are getting paltry returns on their cash, they can see value in their supply chain. At the same time their suppliers are cash poor and eager for affordable and available sources of working capital. Indeed, the crisis of 2008 highlighted how critical the supply chain is to everybody. In times of economic uncertainty, cash is king and the plight of smaller businesses has been made worse by their customers extending payment terms in order to bolster their own cash position. This is why Supply Chain Finance (SCF) is a hot topic. It allows core buyers to lengthen their payment terms to their suppliers while providing the option for their large and SME suppliers to get paid early.Upon the review of supply chain finance and related theories, this article applied the knowledge to analyze the potential problems and challenges the North American District of N company would confront during its supply chain finance program. From the overall view of supply chain, the key issues exist in the cooperative supplier relationship, material flow, information flow and cash flow. Then it defined specific actions during the program preparation and implementation phases that include master data standardization to all suppliers, utilization of a phased SCF on-boarding approach for supplier enrollment, payment approval process review to ensure timely invoice approval for SCF, etc. With the implementation of all these actions, the goal of SCF is expected to be achieved, with working capital optimization for N company and adequate cash flow for its suppliers. This implementation proposal can be a reference to the other core enterprises and bring some enlightenment.