Description
COURSE OVERVIEW
Supply Chain Finance focuses on creating liquidity in the supply chain through various Buyer or Seller-led solutions with or without a facilitating technology. The role of supply chain finance (SCF) is to optimize both the availability and cost of capital within a given buyer-supplier supply chain. To add further value, information on the physical flow of goods can be monitored. The coupling of information enables lenders to mitigate financial risk within the supply chain.
The mitigation of risk allows more capital to be raised, capital to be accessed sooner, or capital to be raised at lower rates. Supply chain participants reside in diverse economic environments, are of different sizes, face a variety of uncertainties, have different bargaining powers over its trading partners, and have different accessibilities to capital markets. Many forms of financing arrangements between buyers and suppliers have emerged intending to overcome challenges in their specific economic and business environments.
COURSE OBJECTIVE(S)
The objectives of this are to:
- Introduce students to the relationship between the physical and financial supply chain.
- Assist students to understand the difference between supply chain finance and “open account” transactions.
- Enable students to appreciate the benefits of Supply Chain Finance for importers, exporters, SMEs and emerging markets.
- Introduce students to export credit agencies (ECAs) and their role in supply chain finance and bank payment obligation (BPO).
- Understand the potential of supply chain finance and the standard market definitions for the techniques of SCF.
- Understand and articulate the value of supply chain management practices and the requirements that enable supplier finance techniques.
- Appreciate the various SCF challenges and regulatory, accounting, and reporting considerations.
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