Understanding Cash Flow in Supply Chain Management
Explore the relationship between supply chain management and cash flow, crucial for the financial health of businesses. Learn how optimizing processes can enhance cash flow, leading to better supplier relations and business stability.
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Libyan International Medical University Faculty of Business Administration Cash Flow in Supply Chain Management Farah Elsaite 2914 Omar Bubtana 2770 Ameen Bendardaf 2769 Model Instructor: Dr. Mohamed Zuwawi Date: 30.12.2021
TABLE OF CONTENTS DEFINING CASH FLOW IN SUPPLY CHAIN 02 01 INTRODUCTION HOW DOES SUPPLY CHAIN INCREASE CASH FLOW THE THREE FLOWS OF SUPPLY CHAIN 03 04 05 06 REFERENCES CONCLUSION 1
INTRODUCTION Supply chain management is the management of the flow of goods and services, includes all processes that transform raw materials into final products. Cash flow, on the other hand, is the very real, literal flow of money continuously paying for the entire operation. It is the money paying suppliers for raw materials. It pays for the process that adds value to the materials. 2
DEFINING CASH FLOW IN SUPPLY CHAIN Cash customer through all the supply chain partners that provide goods and services along Information flows both upstream and downstream as customers place orders and suppliers information about the products and when they willbe delivered. flows upstream from the the way. provide 3
THE THREE FLOWS OF SUPPLY CHAIN Material Flow The flow of the physical product from supplier all the way down to the customer. Information Flow The flow of information from supplier to customer and from customer back to supplier. Cash Flow Involves the movement of money from the customer to the supplier. 4
HOW DOES SUPPLY CHAIN INCREASE CASH FLOW Business Process Optimization. Logistics Optimization. Machine Optimization. Production Optimization. Risk Management. Spend Management. 5
CONCLUSION Managing your cash flow is an essential part of keeping your company in business. Knowledge of your cash flow should lead you to having a stronger position when negotiating with suppliers. A good cash flow means you are less likely to be slow on payments and more likely to be high up on your suppliers list of priority customers. 6
REFERENCES Supply Chain Management (SCM). (n.d.). Investopedia. Retrieved December 31, 2021, from https://www.investopedia.com/terms/s/scm.asp dummies - Learning Made Easy. (n.d.). Managing Supply Chain Flows. Retrieved December 31, 2021, from https://www.dummies.com/article/business-careers-money/business/operations/managing-supply-chain- flows-249004 Mitchell, L. (n.d.). Cash Flow and Supply Chains - Not Just About Profit. Corporate Transformation Services. Retrieved December 31, 2021, from https://corporatetransformationservices.com/cash-flow-and-supply-chains- not-just-about- profit/#:%7E:text=Cash%20flow%2C%20on%20the%20other,turning%20them%20into%20finished%20products). Aluko, N. (n.d.). The three flows of supply chain - kpakpakpa.com. Kpakpakpa - Quality Access To The Nigerian Market. Retrieved December 31, 2021, from https://kpakpakpa.com/spotlight/the-three-flows-of-supply-chain/ StackPath. (n.d.). How to Optimize Your Supply Chain. Retrieved December 31, 2021, from https://www.industryweek.com/finance/software-systems/article/21950334/how-to-optimize-your-supply- chain-to-improve-cash-flow 7
