Value Chain Benefits Estimation Due To Supply Chain Finance Adoption-A Simulation Study

Abstract

Supply Chain Finance is a solution that has the potential to render benefits to all the value chain participants if adopted appropriately. This study attempts to simulate the range of benefits that the value chain players situated at different tiers in the Indian Auto industry can expect with SCF solution adoption. The study’s objective is to help accelerate the adoption of SCF to support deeper-tiered firms, which aligns with the AtmaNirbhar Bharat initiative. Reliable secondary financial data is used for the analysis while being cognizant of the market rates of cost of debts for various tiers of the value chain for benefit simulation. Our study identified areas that can contribute to the value case and successfully simulates benefits for all the players. Such studies provide confidence to the Indian auto industry to embrace the SCF solutions at scale, benefiting the entire value chain. This study provides evidence in linking SCF solution capabilities to organizational financial effectiveness.