Barrier analysis of supply chain finance adoption in manufacturing companies.

Purpose: Companies all over the world have recently started to adopt supply chain finance (SCF) solutions in their supply chains to reduce the payment defaults and simplify the bill settlement process. The purpose of this paper is to identify and prioritize the barriers to adopting SCF in micro, small and medium enterprises. Design/methodology/approach: It employs a three-phase methodology to identify and prioritize the essential barriers to the implementation of SCF. An extensive survey has been carried out in 101 Indian MSMEs in India which identified 37 barriers under six heads in the first phase. Experts' interview using the Delphi technique has been carried out in the second phase to finalize the barriers. The analytic hierarchy process methodology, with sensitivity analysis for validation, is used in the final stage to prioritize and rank the barriers. Findings: Results show that financial and information technology barriers are prominent in SCF adoption followed by financial challenges. Among specific barriers, the disclosure of sensitive company information to competitor barrier acts as an essential barrier followed by poor technological capability of MSMEs. Research limitations/implications: The study is limited to SCF adoption of MSMEs in a developing nation. Extensive research is required in order to derive a global trend. Practical implications: The current research contributes to the stakeholder theory and transaction cost economics. Observations made in the current research can encourage organizations to incorporate stakeholders' concerns into the adoption of SCF solutions. The study provides a more in-depth view of such challenges and a benchmark, which will help companies to adopt SCF solutions more effortlessly. Moreover, policy makers across the world can explore these serious issues and amend or introduce new policies to facilitate companies' implementation of supply chain financial solutions. Originality/value: To the best of the authors' knowledge, this is the first study which identified and prioritized SCF adoption barriers of MSMEs in a developing nation. This study is also novel in adopting a hybrid analytical hierarchy process-sensitivity analysis for ranking the SCF barriers in an MSME context. SCF studies often emphasize only on the reverse factoring aspect of SCF. The current study considers many innovative aspects of SCF, such as pre-shipment financing, dynamic discounting, inventory financing, collaborative logistics, etc. [ABSTRACT FROM AUTHOR]