Integrating FInanciaL HEAlth in Supply Chain Management – FILEAS-FOG

The project is structured in four parts: consideration of financial parameters in production plans, then in location strategies; choice of financial instruments by players, then modes of collaboration and cross-functional financing.
Overall, the aim is to develop mathematical models that take into account both financial and industrial factors.

The 1st area of research focused on incorporating financial aspects (WCR) into tactical planning models. Thanks to structural properties of the model, a dynamic programming algorithm calculating the optimal solution was developed. A 2nd axis focused on taking into account the financing mode in strategic plant location decisions. The economic function is based on Adjusted Present Value, and the model can be used to define the number of plants to be opened, the timeframe for opening them, and the method of financing them (equity or debt). In a 3rd axis, the appropriate financing methods were analyzed when credit is offered by the supplier or by the banking institution in the presence of options (sale or purchase). It appears that the financing method chosen can influence the quantity ordered from the supplier. A final section focused on the modes of coordination between customer and supplier. The results show the important role played by different financing methods in the coordination of the supply chain in a CSR context and within the framework of a commercial platform. Finally, the impact on the nature and quality of actor relationships depends on the type of blockchain chosen (single-actor, consortium or hybridized) and reinforces mechanisms already present within networks: centrality, distribution of rights and whether or not the network is developed.

Nevertheless, this initial work opens up a number of interesting perspectives. Without expressing them for each project, it seems clear to us that several models could be made more complex (taking hazards and uncertainties into account, using other financial levers, etc.) or be approached by more efficient resolution methods (metaheuristics, etc.).

Silaghi F.; Moraux, F. Trade credit contracts: Design and regulation. European Journal of Operational Research. 2022, 296, 980-992.

Hovelaque, V.; Viviani, J.L.; Ait Mansour, M. Trade and bank credit in a noncooperative chain with a price-sensitive demand. International Journal of Production Research. 2022, 60, 1553-1568.

Phan, D.A.; Hovelaque V.; Viviani, J.L. Integrating point-of-sale financing into the coordination of a price and credit dependent e-commerce supply chain. International Journal of Production Economics. 2023, 108825.

Hedayatinia, P.; Lemoine, D.; Massonnet, G.; Viviani, J.L. Put Option Contracts in Newsvendor Model with Bankruptcy Risk. IFIP APMS2021, Sep 2021, Nantes, France. 167-174.

The main goal of the project is to explore ways to improve the competitiveness of supply chains thanks to a better integration of logistical and financial decisions. This implies a decompartmentalization between supply chain and financial departments of the company and between the stakeholders in the chain (externalities / synergies). In this perspective of functional and organizational transversality, the objective is to design an analytical framework and management tools for the supply chains, their individual links and, if necessary, their stakeholders. Two main questions will be addressed: how do financial aspects affect logistical and tactical decisions both at the level of the members and the chain as a whole? What collaborations for optimizing financing and control of financial risks in the supply chain? In the first question, we want to show that the integration of financial risks and flows into the decision-making process (planning, location) is of particular interest at the managerial level. In terms of tactical planning, the potential for research development is very important to introduce the financial dimension while taking into account more realistic production processes, to take account of collaborative relationships between actors and to integrate financial risks. In term of location, our main research question will be to know how the introduction of financial factors in the multi-actors models of Supply Chain Network Design modifies the decisions of location in space or their staggering in time.
The objective of the second question is to propose the most appropriate financing methods and their optimal combination within a supply chain. This implies taking into account both the impact of financial decisions on logistical choices and their consequences on other members of the chain. In this broad perspective, we wish not only to analyze the relevance of existing financing methods (commercial and banking finance) but also to explore the possibility of developing new financing methods (concept of Supply Chain Finance). As the financial cost is mainly linked to the risk of the companies and the chain as a whole, we will study the impact of different types of risks: financial risks (credit and liquidity risks linked to commercial loans, foreign exchange risk, etc.), structural risks (concentration, asymmetry of information) and logistical risks on the choice of optimal financial structure. As the financial decisions and risks of the different members of the chain are interconnected, individual optimization does not lead to optimization of channel funding. Our objective is therefore to explore the most relevant modes of financial collaboration.
Our objective is also to ensure the operationalization of our work, transfer and interaction with stakeholders in the food sector. The objective is not to provide an answer to a specific problem of the company but, on the one hand, to inspire our theoretical reflection (for example, taking into account specific constraints of food chains such as perishability, constrained upstream flow, etc.), and, on the other hand, to compare our theoretical results with industrial practices.