Supply Chain Management: A Business Centric Approach
International Journal of Engineering and Technology (IJEAT), Volume1, Issue 1, August 2012, ISSN: 2249 -8958, pp.197-203
7 Pages Posted: 9 Apr 2015 Last revised: 19 Apr 2018
Date Written: August 15, 2012
Many research personnel’s primary attention in the study of supply networks has focused on the product or transportation mechanism and also on the relevant information flows, much less central to the study of supply chain management and its inherent bond with cash flows. Networked organizations are receiving increasing attention in management literature because of their perceived success in terms of fast growth, increased flexibility and efficiency of operations, lower overhead costs, and effective competitive positioning. For all firms, the choice of which activities to perform internally and which to outsource is a critical issue. Cost information can play a fundamental role in the decision about how much “market” and how much “hierarchy.” Indeed, outsourcing is, basically, a cost and benefits evaluation. Management accounting and strategic management studies have, so far, not addressed this perspective explicitly. Management accounting is too internally focused on the costs of the firm rather than the entire supply chain. The strategic management perspective, on the contrary, focuses its attention on the supply chain, but only deals very generally with those transaction costs which emerge while using the market. Both approaches fall short in providing a well articulated financial rationale for the segregation, which activities should be outsourced and which should be entrusted to the market. Neither approach does much to help managers understand where value is created in the value chain, nor the costs of the activities involved including their cost drivers. Cash Flow Management (CFM) studies provide a useful cost analysis framework which is too often missing in the strategic decision making process. Competitive analysis, value or supply chain mapping, and cost driver analysis are, in particular, the tools of CFM. This paper considers a number of central issues related to the study of this under-researched issue. Specifically, we raise the issues of cash flows and their cost as well as risk implications, explore the value that can be derived from optimizing and reorganizing cash flows, and consider the role of current banking services arrangements and their implications for change and improvement of cash flows in supply chain networks where both vertically integrated and network organizations exist. The financial impact arising because of the complexity involved in different organization models and its impact on profitability and competitive position is our main theme.
Keywords: Multinational companies; Key resource area; Cash flow management; HP; SCOR and GSC
Suggested Citation: Suggested Citation