International Journal of Physical Distribution & Logistics Management

Gelsomino, Luca Mattia; Mangiaracina, Riccardo; Perego, Alessandro; Tumino, Angela

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-08-2014-0173

Purpose– The purpose of this paper is twofold: to classify the research to-date on supply chain finance (SCF) according to the main themes and methods, and to propose directions for future research. Design/methodology/approach– The review is based on 119 papers mainly published from 2000 to 2014 in international peer-reviewed journals and in the proceedings of international conferences. Findings– The articles that provide a definition of SCF reflect two major perspectives: the “finance oriented” perspective – focused on short-term solutions provided by financial institutions, addressing accounts payable and receivable – and the “supply chain oriented” perspective – which might not involve a financial institution, and is focused on working capital optimisation in terms of accounts payable, receivable, inventories, and sometimes even on fixed asset financing. Research limitations/implications– While efforts were made to be all-inclusive, significant research efforts may have been inadvertently omitted. However, the authors believe that this review is an accurate representation of the body of research on SCF published during the specified time frame, and feel that confidence may be placed on the resulting assessments. Originality/value– The paper presents a comprehensive summary of previous research on this topic and identifies the most important issues that need to be addressed in future research. On the basis of the identified gaps in the literature, four key issues have been highlighted which should be addressed in future research.

Lekkakos, Spyridon Damianos; Serrano, Alejandro

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-07-2014-0165

Purpose– Faced with increasing pressure to meet short-term financing needs, companies are looking for ways to unlock potential funds from within the supply chain. Recently, reverse factoring (RF) has emerged as a financing solution that is initiated by the ordering parties to help their suppliers secure financing of receivables at favorable terms. The purpose of this paper is to study the impact of RF schemes on small and medium enterprises’ operational decisions and performance. Design/methodology/approach– The authors model a supplier’s inventory replenishment problem as a multi-stage dynamic program and derive the supplier’s optimal inventory policy for two cases: no access to external financing; access to external financing through RF or traditional factoring. A number of numerical experiments assesses the supplier’s operational performance. Findings– A working capital-dependent base-stock policy is optimal. The optimal policy specifies the sell-up-to-level of accounts receivable with regard to their maturity. RF considerably improves a supplier’s operational performance while providing the potential to unlock more than 10 percent of the supplier’s working capital. When RF is associated with credit-term extension and the supplier has access to alternative sources of financing, the value of RF is then lower than intuitively expected unless the interest spread is considerably large. Originality/value– This is the first attempt to analytically study the impact of RF in a stochastic multi-period setting.

Liebl, John; Hartmann, Evi; Feisel, Edda

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-08-2014-0171

Purpose– Reverse factoring (RF) can generate win-win situations for buyers, banks and suppliers. However, the supply chain management literature generally tends to ignore financial influences and accounting support structures. Research in the area of RF is relatively new and considerably fragmented. The purpose of this paper is to address this research gap and provide an analysis of the objectives, antecedents and barriers of implementation. Design/methodology/approach– The study contributes fundamental new insights derived from 11 case studies. In total, 28 interviews were conducted from the perspective of buyers, banks and suppliers and analyzed regarding influencing factors of different RF approaches. Findings– RF predominantly is used to extend days payable outstanding. However, secondary objectives such as the reduction of supplier default risk and process simplifications also play an important role. The number of integrated suppliers, dependence of suppliers on their buyers, spread between internal refinancing and RF costs and the diversity of target agreements strongly influence these objectives and therefore the configuration of RF solutions. Originality/value– Most studies fall short of exploring the mechanism of RF from all of the different perspectives of buyers, banks and suppliers. This approach allows new insights regarding prerequisites and different motivations behind RF.

Filbeck, Greg; Kumar, Sanjay; Liu, Jiangxia; Zhao, Xin

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-04-2014-0082

Purpose– The purpose of this paper is to explore the effect of supply chain disruptions on competitors. Using companies in the automobile industry, the authors study the contagion effect in supply chains based on the affected firm and its competitors, whether the disruption occurs domestically or by a foreign-based firm, and within the context of economic market cycles. Design/methodology/approach– Standard event study methodology is used to test the stock price reaction to supply chain disruptions. The purpose of this methodology is to determine whether the announcement of an event produces a “significant” stock price reaction around the time of the announcement. To conduct such tests, daily stock returns are measured around the announcement date and compared with the expected return. To further test whether the event study results can be explained by the business cycle, sample period, and stock characteristics, the authors use regression analysis. The analysis is based on a data of 408 disruptions compiled from news announcements. Findings– Supply chain disruptions have consequences for affected companies as well as competitors. The stock market impact from disruptions in automobile companies is affected by market cycle as well as the brand domicile. The authors observe that negative stock effect of disruptions occurs in bear markets but not in bull markets. American-brand automakers experience a larger stock price decline in bear markets compared to Japanese-brand automakers. The results support a contagion effect as American-brand automakers experience negative stock reactions when a competitor announces disruptions. The contagion is more pronounced for American-brand automakers in bear markets when disruptions are announced by Japanese-brand automakers. The authors do not find evidence of a contagion effect for Japanese-brand automakers, indicating that they may be more resilient and are not affected by competitors’ supply chain performance. Research limitations/implications– The US automobile industry is dominated by five major firms. While the research is ground breaking, the ability to generalizing to other industries that are less concentrated in leadership and competition may be limited. Practical implications– The study has implications for supply chain managers who make decisions regarding investments in disruptions mitigation. The results are also of interest to investors who may seek opportunities to take short positions on stocks within the automobile industry. Originality/value– The paper is the first to test the impact of supply chain disruptions on competitors. Additionally, the authors characterize the impact of disruptions based on market cycle and company domicile.