Scenario Development for Collaborative Financial Supply Chain Management in the Automotive Industry

This paper focuses on to the financial issues of supply chain management by taking a collaborative working capital management perspective. On the financial performance side of supply chain management, if evaluated in a collaborative way, concrete improvements can only be reached if financial and operational processes are jointly considered. In this study, we present a solution of collaborative working capital management that can be used in managing the financial flows within supply chains. The paper presents the current state of the cycle times of financial flows and proposes a model for working capital optimization in the supply chain via payment term adjustments. The model is tested with seven scenarios, which show that remarkable amounts of working capital could be released by adjusting and harmonizing the payment terms in the supply chain. The introduced model provides a statistically significant perspective on collaborative working capital management in the supply chain. The paper provides practical support for reducing tied up working capital at the supply chain level. (C) 2019 The Authors. Published by Elsevier Ltd.