SCM Lowdown

Financial Crisis Hitting Supply Chain and Solution to the Problem

As economy is getting into the recessionary phase and the credit problems in financial markets, it is also assumed for supply chain sector that the new money will reach to them only from the end customer. However, this is not possible in view of need for capital investment as without investment in new plant, equipment, materials, research & development, suppliers, education, etc.

So this financial crunch, definitely, would pose a serious problem for suppliers to get resources to compete for business, development of new products and investment in news projects and assurance against negative cash flow in the starting phase of new product insemination.

So crux of whole thing is that in new economy, the creation of wealth is of more importance than horse trading of wealth and the problem can be solved only after with financial institutions ability to pay loan to get some better results. That is also equally true in this situation that economy may not grow with as expected higher rate and a person may sustain with reasonably minimum profits.

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