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Supply Chain Finance (SCF)

Supply chain finance helps bridge ... the supplier’s desire to be paid quickly ... and the retailer’s desire to extend credit terms (Morrell)

Information about Supply Chain Finance (SCF)

Supply chain finance (SCF) is a relatively new concept. It is most relevant to logistics, supply chain management, collaboration and finance fields (Hofmann, 2005; International Institute for Management Development, 2009). SCF is an approach for two or more entities in the supply chain to plan, steer and control the flow of financial resources (Hofmann, 2005). In most situations, the collaboration partners commit to share relational resources, capabilities, information and risk on a medium- to long-term contractual basis (Hofmann, 2005). Companies can use SCF to support a range of procurement objectives, including price reductions (cost), term extensions (capital) and supply chain financial risk reduction (risk) (Kramer, 2011).

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