Information systems and the management of financial risk in supply chains

Information systems have developed along the supply chain to support logistics management in all types of industries. Logistics strategies have focused on reducing the levels of working capital by increasing the efficiency of information now from market to raw materials suppliers. Similar developments have also occurred to support other business processes, for example connecting together new product design and marketing databases to create virtual corporations. This paper addresses the financial implications of these changes and examines the way that financial risk is traditionally managed in supply chains and presents an organizational model of likely future developments. The research has theoretical implications for cooperative strategy development in the management of financial risk between multi-nationals and their economic partners, and illustrates the role of information systems in developing virtual finance strategies.