On Financial Supply chain management...

Filed in archive Point of view on January 5, 2007

Financial Supply Chain Management...I've been hearing this a lot of times lately. I've been hearing that it's important, companies need experts in this area an so on and so forth. But beyond all this, what do they mean by that? and why Financial SCM?

As a definition, SAP provides this:

Financial supply chain management is the most effective approach to optimize working capital levels, streamline accounts receivable processes, and eliminate excess costs linked to payments.

I think it's all because of the increasing importance of managing cash flow. Running out of money at certain points in time, even though you might have a lot as inventory, has become more probable. And, another thing, I also believe that Financial SCM is beyond some systems to automate monitoring accounts receivables, etc. but a lot about soft skills and negotiation with suppliers to change the terms of contracts.

Am I right?