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

FAQs

What is supply chain management and operations management? ›

Operations and Supply Chain Management (OSCM) includes a broad area that covers both manufacturing and service industries, involving the functions of sourcing, materials management, operations planning, distribution, logistics, retail, demand forecasting, order fulfillment, and more.

Supply chain finance, also known as supplier finance or reverse factoring, is a financing solution in which suppliers can receive early payment on their invoices. Supply chain finance reduces the risk of supply chain disruption and enables both buyers and suppliers to optimize their working capital.

In order to have a successful supply chain, you must have a constant interaction between supplier and Customer. 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.

While traditional supply chain management focuses on the physical flow of goods and services, FSCM extends this scope to encompass the management of financial transactions, information, and relationships across the supply chain ecosystem.

A supply chain management degree leads to diverse career opportunities in a rapidly evolving global market. Graduates can expect substantial earning potential, with the average annual wage in logistics being around $81,220 as of 2022.

The five most critical phases of SCM are planning, sourcing, production, distribution, and returns.

Supply chain finance is an agreement in which the buyer partners with a financial institution that will then pay suppliers on the buyer's behalf. These suppliers may have to sign up for the program, but the onus of setting it up is on the purchasing company.

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.

An SCF agreement allows buyers to extend payment terms if necessary, allowing a greater amount of financial flexibility. A business that can be flexible with its cash resources can adapt to changing circ*mstances much more effectively.

Summary: Traditional supply chain management focuses on both materials and information flow. However. considerable cost reductions can also be achieved through optimally designed financial flows within the chain. Savings due to minimized stock levels may easily be offset by the costs to finance the remaining inventory.

How big is supply chain finance? ›

This new report charts the trajectory of the supply chain finance market, which is projected to jump from $5.65 billion in 2022 to $6.23 billion in 2023, reflecting a robust CAGR of 10.1%. It then forecasts a climb to $8.86 billion by 2027 at a 9.2% CAGR, underscoring the dynamic growth prospects of the sector.

The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service.

The primary difference between supply chain management and operations management is that the supply chain deals with materials that are received or sent from external places and operations management is more involved with the internal processes.

Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery).

Because supply chains are essential for almost every industry and organization, a degree in Supply Chain Management can lead to numerous career paths. These include: Supply chain analysts analyze data and methods to forecast disruptions and work to improve overall supply chain operations.

A well-managed supply chain can significantly reduce a company's operating expenses, driving profits. This efficiency can be reflected in every aspect of the chain, from idea creation to the final product marketing.