Reducing and Reinvesting Working Capital in Business Ecosystems

Abstract

Issues related to supply chain finance, also known as supplier finance or reverse factoring, have been in focus of both academics and practitioners after the financial crisis. In the broadest perspective of supply chain finance, it concerns all supply chain objects: the flow of goods, information and finance; processes; current and fixed assets; and personnel involved in the supply chain. This way, supply chain finance connects with the assets management of business ecosystems. The focus of schemes in this area is to support the working capital management of the key suppliers of the buyer. The schemes are implemented between the tier 1 supplier and the buyer. In this paper, we study working capital management in an information and communications technology business ecosystem producing desktop computers, spreading the study from the focal actor to the component suppliers in the furthest tier. We show the potential that exists to release capital from operational issues to more profitable purposes.