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    Exposing Supply Chain Finance Myths – An investigative study
    (2022-06)
    Hofmann, Erik
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    Purnelis, Leonia
    A key to success for most companies lies in managing net working capital (NWC), as most supply chains have a tremendous amount of capital tied up. Freeing up this short-term capital has the potential to increase cash flow, release funds for strategic innovations and process improvements, and ultimately enhance the competitiveness of the entire supply chain. For many companies, supply chain finance (SCF) has become essential to achieving these potentials. Steadily evolved from a niche product to a mainstream application, SCF supports companies to unlock significant amounts of cash flow bounded in their intra- and inter-organizational operations. However, do supply chain managers speak and understand the language of corporate treasury and managerial accounting or are they guided by supposed principles whose evidence has long been disproven? Various uncertainties and misconceptions persist in regard to how SCF works and how it is used appropriately in organizations. To provide clarity and transparency for practitioners, this study examines 20 common statements about SCF to determine their degree of truthfulness. Uncovering possible myths will assist companies to communicate the added value of SCF and to raise awareness of this previously underestimated tool.
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