Factoring as an Effective Working Capital Option: A Critical Review

Purpose – The purpose of this paper was to critically review the concept of factoring, with the view to ascertain its effectiveness in ensuring that organizations have access to enough liquid funds that facilitate the smooth running of their operations. Methodology – The Systematic Quantitative Assessment Technique (SQAT) was used to identify and review relevant peer-reviewed journal articles that had investigated factoring as a source of working capital. Findings – Based on a critical review of extant factoring scholarship, it was deduced that factoring has been effective enough to elicit a growing rate of adoption across the continents, despite the costs of adoption, as well as the 2009-2014 global financial crisis, excluding only North America where there seems to be a constant decline in adoption rate. Research limitations – The use of limited but high quality academic databases means that some articles were not considered for this review. Originality/value –The study is one of few studies to discuss the effectiveness of factoring as a source of working capital

Les enjeux du Supply Chain Finance : une étude exploratoire sur les entreprises marocaines

This paper is part of the work that highlights the importance of managing financial flows in Supply Chain Management. Indeed, our research focuses on identifying the stakes of Supply Chain Finance in the context of Moroccan companies and on the study of the role of SCF in the chain's efficiency through an exploratory study. Based on a literature review, we discerned the potential impact of SCF on the chain's efficiency. Empirically, we conducted an exploratory qualitative study to examine Moroccan managers' knowledge of our key concepts by asking how financing issues were addressed in their companies. To this end, we conducted ten semi-structured interviews. Thus, based on the results obtained, we find that SCF is positively linked to the optimization of the efficiency of the supply chain, as it facilitates access to financing for SMEs while offering a balance between the different and sometimes contradictory needs of the supply chain actors. In general, our research contributes to the conceptualization of SCF as a financial resource and an approach related to supply chain management.  The main limitation of our research is that considering Moroccan companies (SMEs) represents a challenge, as it is a new and little-explored context. This perspective can be justified because most studies on SCF have mainly focused on developed and emerging countries. Thus, a further statistical analysis, such as using structural equations, would be necessary to justify a more generalized conclusion.   Keywords: Supply chain finance, effectiveness of the chain, qualitative approach, Moroccan companies. JEL Classification : L2 ; M20 ; M21 Paper type : Empirical researchfinanciers dans le Supply Chain Management. En effet, notre recherche porte sur l’identification des enjeux du Supply Chain finance dans le contexte des entreprises marocaines ainsi que sur l’étude du rôle du SCF dans l'efficacité de la chaîne par le biais d’une étude exploratoire. Sur la base d’une revue de littérature, nous avons discerné l’impact potentiel du SCF sur l’efficacité de la chaine . Sur le plan empirique, nous avons mené une étude qualitative exploratoire dont le but est d’examiner les connaissances des dirigeants marocains sur nos concepts clés en les interrogeant sur la manière à travers laquelle les problématiques de financement étaient abordées au sein de leurs entreprises. Pour ce faire, nous avons établi un nombre de dix entretiens semi-directifs. Ainsi, sur la base des résultats obtenus, nous constatons que le SCF est positivement lié à l’optimisation de l’efficacité de la chaine, car il permet de faciliter l’accès au financement pour les PME tout en offrant un équilibre entre les différents besoins parfois même contradictoires des acteurs de la Supply Chain. De façon générale, notre recherche contribue à la fois à la conceptualisation du SCF comme étant une ressource financière et à la fois comme démarche liée au supply chain management.  La principale limite de notre recherche est le fait de considérer les entreprises marocaines (PME) représente un défi, car il s’agit un nouveau contexte très peu exploré. Cette perspective peut se justifier par le fait que la majorité des études sur le SCF se sont principalement concentrées sur les pays développés et émergents. Ainsi, une analyse statistique plus poussée tel quel l’utilisation des équations structurelles serait nécessaire pour la justification d’une conclusion plus généralisée.   Mots-clés : Supply chain finance, efficacité de la chaîne, approche qualitative, entreprises marocaines. Classification JEL: L2 ; M20 ; M21 Type de l’article : Recherche empiriqu

Benefits of working capital sharing in supply chains

Supply chain finance and working capital management are important avenues to reduce supply chain costs. Small suppliers may not have sufficient working capital to finance their operations and efficiently supply their customers. We develop a model that captures the fundamental aspects of financial and operational planning in a two-stage supply chain, with both strong and weak members. A strong member can negotiate for more favorable financing rates, more advantageous payment terms, and shorter lead times than a weaker member. We investigate two working capital allocation scenarios. In the dedicated working capital allocation scenario, the members of the supply chain each have their own working capital. In the joint working capital allocation scenario, the members of the supply chain have a joint pool of working capital. Our results demonstrate significant benefits when the members of the supply chain share the working capital. We also show that extending payment delays to a supplier upstream results in higher overall supply chain costs