According to Rupin Banker, an international investor and supply chain finance expert, a financial supply chain is monetary transactions between trading partners that facilitate the production, purchase, and sale of goods and services. The financial supply chain matters more than physical supply chains because it keeps the doors of a business open, allowing for continued operations. Too many companies prioritize physical supply chains over financial ones, which puts operations at risk. Financial supply chain management is essential to corporate success and longevity.
Rupin Banker On Financial Supply Chain Management
A company will not survive if its core focus is on individual processes; concerning itself with individual costs rather than end-to-end processes covering procure-to-pay cycles, order-to-cash cycles, and working capital management is a mistake. The business must take a holistic approach to financial supply chain management.
A comprehensive approach to supply chain strategy from a financial perspective improves competitiveness and supply chain efficacy. Efficient financial management and partnership strategies within the supply chain can increase liquidity in the value chain and consolidate supplier-buyer relationships, achieving a streamlined approach that is both more beneficial and competitive.
Importance of Financial Supply Chain Management
Rupin Banker urges companies to understand the value-add of an official financial supply chain management effort. Insurance, financing, and transaction costs can account for a significant portion of unit price expenses. A company can reduce the overall upfront or manufacturing costs by improving the financial supply chain end-to-end, resulting in better financial management. Also, by assessing the supply chain in congruence with financial management, the business can realize higher productivity in the long run.
Viewing the supply chain and its financial implications as individual components — costs assessed at each separate stage — only results in overspending and over-budgeting. A comprehensive review of the entire financial and physical supply chain can provide clues and opportunities for cost and redundancy reductions, improving overall operational efficiency.
Financial Experts Push for Better Financial Supply Chain Understanding
According to Rupin Banker and other financial experts, the idea of financial supply chain management stemmed from supply chain financing programs. The programs provided improved payment terms and alternative forms of payable processes, allowing increased efficiency. Through effective financial management, small and large firms can play off each other’s strengths to reduce costs.
As an international trade and finance expert, Mr. Banker understands the importance of refined supply chains. His experience helped him mentor businesses into rapid growth and repeatable success. Having developed and executed supply chain financing for some of the largest corporations in the world, Rupin Banker has shown an impeccable capability of mentoring organizations and transforming them into multi-million dollar enterprises. The one thing that rings true for every business he helps is the need for effective and comprehensive financial supply chain management.