Supply chain finance : improving the efficiency of the table grape industry : a case study

Mussmann, Charl (2015-04)

Thesis (MCom)--Stellenbosch University, 2015.

Thesis

ENGLISH ABSTRACT: “Within the context of the current market conditions, SCF may be one of the most attractive tools for companies to diversify funding basis, enrich and solidify their relationships with suppliers and their core banks.” – Michiel Steeman (Executive Director – Supply Chain Finance Community). (ING Group, 2013b). Insufficient cash flow is one of the major reasons for business failure in the current business environment. The spotlight is on collaboration between supply chain management and finance to release tied up cash in supply chains. Supply Chain Finance is a financial tool to help improve cash flow and optimise working capital to operate more efficiently. South Africa is one of the leading fruit exporters in the world with complex supply chains and even more complex financial arrangements. The need for Supply Chain Finance is aggravated by the long distances to overseas markets, and thus the long delay in payments after goods have been shipped. Supply Chain Finance is beneficial to the supplier, buyer and the financial service provider, creating a win-win-win situation. During this research the table grape export supply chain of Denau Farming is investigated to develop an explorative case study to implement Supply Chain Finance into their business model. During the research the problem of late payment received by buyers is explored by means of interviews and existing literature. A Concept Model is developed by adapting the Supply Chain Operations Reference Model (SCOR®) and the Management for Supply Chains (M4SC™) framework to identify the supply chain strategy during the current as-is physical and financial flow and to identify the gap in the supply chain. Two Supply Chain Finance solutions are identified based on Denau Farming’s financial needs in order to develop the to-be physical and financial supply chains and the resource changes required to facilitate the respective implementation. The final result determines how the proposed Supply Chain Finance solutions affect the expected cash-to-cash cycle time and the expected Economic Value Added (EVA®) in the case study.

AFRIKAANSE OPSOMMING: “Within the context of the current market conditions, SCF may be one of the most attractive tools for companies to diversify funding basis, enrich and solidify their relationships with suppliers and their core banks.” – Michiel Steeman (Executive Director – Supply Chain Finance Community). (ING Group, 2013b). Onvoldoende kontantvloei is een van die vernaamste redes waarom besighede in die huidige sakeomgewing misluk. Die kollig val op samewerking tussen voorsieningskettingbestuur en finansiering om kontant wat vasgevang is in voorsieningskettings te kan vrystel. Voorsieningsketting-finansiering is ‘n finansiële instrument wat kan help om kontantvloei verbeter en bedryfskapitaal te optimeer om meer doeltreffend te bedryf. Suid Afrika is een van die voorste vrugte-uitvoerders in die wêreld met komplekse voorsieningskettings en nog meer komplekse finansiële reëlings. Die behoefte vir voorsieningskettingbestuur-finansiering word vererger deur die lang afstande na oorsese markte, en dus die lang vertraging vir betaling nadat goedere reeds verskeep is. Voorsieningsketting-finansiering is voordelig vir die verskaffer, koper, en die finansiële diensverskaffer deur die skep van ‘n wen-wenwen situasie. As deel van hierdie navorsing is die tafeldruif-uitvoer voorsieningsketting van Denau Boerdery ondersoek as deel van die ontwikkeling van ‘n verkennende gevallestudie om sodoende voorsieningsketting-finansiering in hul sake-model te implementeer. Tydens die navorsing is die problem van laat betaling ontvang vanaf kopers in oorsese markte verder ondersoek deur middel van onderhoude en bestaande literatuur. ‘n Konsep model is ontwikkel deur die toepassing en aanpassing van die Supply Chain Operations Reference Model (SCOR®) en die Management for Supply Chains (M4SC™) raamwerk beginnende met die identifisering van ‘n voorsieningskettingstrategie tydens die huidige fisiese en finansiële vloei en die begin van ‘n gapings-identifisering vir die voorsieningsketting. Twee voorsieningsketting-finansiering oplossings is geidentifiseer gebaseer op Denau Boerdery se finansiële behoeftes en die ontwikkeling van ‘n verwagte toekomstige fisiese en finansiële voorsieningsketting asook die hulpbronveranderinge benodig wat die onderskeie implementerings kan help fasiliteer. Die finale navorsingsresultate bepaal tot watter mate die voorgestelde voorsieningsketting-finansiering oplossings die verwagte kontant-tot-kontant siklustyd asook die verwagte Ekonomiese Waarde Toevoeging (EVA®) in die gevallestudie beïnvloed.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/97061
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