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Supply chain gains from integration: by combining the physical and financial supply chains, companies can facilitate trading, improve the information flow around their products and boost the overall cash conversion cycle.(FINANCING)
- Article from:
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Financial Executive
- Article date:
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April 1, 2008
- Author:
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Copyright informationCOPYRIGHT 2008 Financial Executives International. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Financing the supply chain was once relatively simple: Years ago, most U.S. companies manufactured and sold their goods domestically. Products were manufactured, warehoused, transported and sold within the U.S. Today, as evidenced by the mounting trade deficit, manufacturing continues to move offshore.
When trade remained U.S.-centric, financing was easy. Banks could lend against the value of the inventory and, if necessary, repossess it if a customer went into default. Simultaneously, U.S. banks had the protection of strict domestic lending laws.
That was then. With so many goods being manufactured outside of the U.S., companies are warehousing their inventory in ...