University of Sussex
Browse
__smbhome.uscs.susx.ac.uk_qlfd7_Desktop_Supply Chain Finance Blome.pdf (489.03 kB)

Supply chain finance: optimal introduction and adoption decisions

Download (489.03 kB)
journal contribution
posted on 2023-06-09, 01:25 authored by David A Wuttke, Constantin Blome, H Sebastian Heese, Margarita Protopappa-Sieke
Supply chain finance (SCF) can improve supply chain performance by facilitating longer payment terms for buyers and better access to financing for suppliers. In spite of these clear benefits, there is empirical evidence for some hesitation and resistance to SCF adoption, manifesting in an often substantial time lag between a buyer's introduction of SCF and its adoption by all targeted suppliers. Observed adoption processes often resemble the s-shaped Bass-curve suggesting that successful early adoptions support adoption decisions by other suppliers. Based on these observations, we consider supplier SCF adoption decisions within a diffusion model, to obtain insights regarding a buyer's optimal SCF introduction decisions in terms of timing and payment terms. We find that initial payment terms and procurement volume strongly affect the optimal timing of SCF introduction and optimal payment term extensions. The degree to which the buyer can influence suppliers in their adoption decisions affects the optimal introduction timing, but not optimal payment terms. Interestingly, our results suggest that, in spite of the clear benefits, many buyers might be well-advised to postpone their SCF implementations.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

International Journal of Production Economics

ISSN

0925-5273

Publisher

Elsevier

Volume

178

Page range

72-81

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2016-06-01

First Open Access (FOA) Date

2017-11-07

First Compliant Deposit (FCD) Date

2016-06-01

Usage metrics

    University of Sussex (Publications)

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC