Purpose - The purpose of this paper is to examine the different
challenges that confront supply chain finance (SCF) and to develop a
hierarchical model that analyzes the complex relationship dynamics among
them. Design/methodology/approach - An extensive survey is carried out
amongst Indian firms to ascertain the perceptions and experiences
related to different SCF challenges. After obtaining an overview of the
different SCF challenges, an Indian company with global operations was
approached and after establishing relationships among the challenges, a
hierarchical relationship structure was developed and MIMBI analysis
(where MI=measure of influencing; MBI=measure of being influenced) was
carried out that helped understand the relationship dynamics of SCF
challenges and identify actions at both strategic and tactical levels.
Findings - The study reveals that lack of common vision among the supply
chain (SC) partners is the most critical challenge confronting SCF.
Unpredictable cash-flows resulting from delays in financial
transactions, due to lack of automation in the payment processes, along
with lack of knowledge and training on SCF tools, also play significant
roles. As organizations are tightly integrated through their SC, they
should initiate collaborative approaches across the SC to reduce the
total procure to payment cycle time and, in the process, improve overall
financial stability of the SC. Research limitations/implications - This
study is based on the findings from the Indian industry; future
research may include a large-scale survey and case studies across
organizations located in different countries and operating under
different environments. Practical implications - Based on the study,
firms can evaluate the dynamics of SCF challenges and redefine SC
relationships and strategies to achieve desired cash flow in the SC.
Originality/value - The academic literature on financial supply chains
is very limited. This paper appears to be the first formal attempt at
analyzing the various challenges confronting SCF.