Applying the Concept of Credit Guarantee on Supply Chain Sourcing Model
Date Issued
2009
Date
2009
Author(s)
Tsao, Yu-Shan
Abstract
In the supply chain of Taiwan, the suppliers are usually formed by the small and medium enterprises (SME). Due to the difficulty of financial loaning in the SEM firms, SME firms may have problem to fulfill order from downstream customers in time which will influence the overall performance of the supply chain. In order to improve the supply chain performance, the government had implemented a program to help SMEs to obtain finance support more easily. Particularly, Small and Medium Enterprise Credit Guarantee Fund of Taiwan, Taiwan SMEG, and Firefly Counterpart Guarantee Fund, FCGF, setup a program to integrate all sections of the supply chain partners to work together for a stronger and healthier supply chain.ase on the practice of FCGF, the supply chain sourcing model is formulated to develop a credit guarantee mechanism. In our model, the downstream manufacturers is a starter of the entire mechanism, manufacturer will negotiate with bank who loan the money to the upstream supplier about ratio mechanism. Also, an emergency vendor included to provide enough materials to meet the demand if the upstream suppliers cannot deliver goods in time. The model discusses the issues of the credit guarantee mechanism to stabilize the sourcing process and provide enough funding for the upstream suppliers to lower the risk and loss.he result shows that when the major supplier’s expected default rate is high and lack of available funds, the credit guarantee mechanism will work effectively. As the major supplier’s expected default rate increases, the share ratio of loan needed to return to the bank by the manufacturers rises. The research also uses the Experimental Design method to identify the important factors in our model which provide the important implications for corporations if a manufacturer intents to implement credit guarantee mechanism. Finally, the shared ratio provides a negotiation base for manufacturers and banks.
Subjects
Credit Guarantee
Supply Chain Sourcing Model
SDGs
Type
thesis
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