The Physical Supply Chain

The reduction of uncertainty in the physical supply chain requires cooperation between trading partners; this uncertainty is reduced ..... but requires adequate investment from both of the partners.

During the initial development of integrated supply chains, the more powerful of the partners ..... their requirements.

With, for example, ..... system, timely delivery of components lowered the working capital needed by a powerful customer, while the supplier had to investment heavily to adapt their system.

The system is uncertain for the supplier because the payment receipt date is unknown, yet powerful customers are ..... to invest in providing a more certain system because it is the supplier that receives the benefit.

Instead of cooperating in the removal of costs from their supply chain, the customer's finance functions may take ..... approach: payments may be delayed in order to match cash flows or operational processes.

A smaller supplier may also ..... higher charges for foreign exchange transactions and cash management services.

With regard to the financial supply chain, it has been proving problematic to implement a sure system for invoice input and ..... of payment orders.

However, in the long run, the process of ..... improvements in the supply chain demands close cooperation.

Instead of apportioning savings to each partner for every investment, the focus is shifted to a more general form of ......

The thrust of the trading relationship can then shift from competition between partners and focus instead upon cooperation within the supply chain and ..... competition between chains.