I. RESEARCH SUMMARY
This study aims to develop and validate a model for applying logistics activities to cash flow and working capital management within supply chains. Unlike traditional approaches, in which material, information, and financial flows are often managed relatively independently, this study views logistics as a mechanism that can influence cash turnover speed, accounts receivable collection time, supplier payment periods, inventory levels, and the Cash Conversion Cycle (CCC).
The theoretical foundation is developed from Supply Chain Finance (SCF), Working Capital Management (WCM), Cash-to-Cash Cycle (C2C/CCC), Logistics Integration, and Supply Chain Management. Previous studies suggest that working capital management should be considered at the interorganizational level rather than focusing solely on optimizing individual firms. Hofmann and Kotzab emphasize the role of payment terms in improving working capital across supply chains, while Randall and Farris propose managing cash-to-cash cycles and capital costs from an end-to-end supply chain perspective.
The study is expected to employ a mixed-methods approach, including a systematic literature review, expert interviews, a business survey, and SEM/PLS-SEM modeling. The proposed research model examines the effects of Logistics Integration, Inventory Management, Transportation Efficiency, Order Fulfillment, Information Visibility, and Payment/Financial Integration on Cash Flow Management. In this framework, the Cash Conversion Cycle and Working Capital Efficiency are used as mediating variables or proxies for financial management effectiveness within the supply chain.
Keywords: Logistics; Supply Chain Finance; Cash Flow Management; Working Capital; Cash Conversion Cycle; Financial Flow; Logistics Integration; Supply Chain.
II. INTRODUCTION
1. Research Background
In modern supply chain management, firms must manage not only material flows but also information and financial flows simultaneously.
Pfohl and Gomm argue that previous logistics and supply chain management (SCM) research has focused substantially on material and information flows, while financial flows within supply chains have received comparatively less attention. The authors propose Supply Chain Finance (SCF) as an approach to optimizing financial flows throughout the supply chain.
From this perspective, logistics determines not only:
How goods move;
Where inventory is held;
How transportation is organized;
How orders are fulfilled;
but also affects:
When a company needs to make cash outflows;
When goods are sold;
When invoices are issued;
When payments are collected;
How long suppliers are given to be paid;
How much capital is tied up in inventory;
Capital costs;
The cash conversion cycle.
Accordingly, the following perspective can be established:
Logistics Efficiency → Financial-Flow Efficiency → Working-Capital Efficiency → Firm Performance
Recent research continues to reinforce this perspective. Studies of logistics firms in the United States indicate that working capital management, measured through the CCC, is associated with firm performance. Meanwhile, research in Vietnam using data from the logistics sector has also employed CCC as a measure of Supply Chain Finance.
III. RESEARCH PROBLEM
The central research problem can be identified as follows: Firms often optimize logistics operations and financial management as separate functions, even though logistics decisions directly generate or release cash flows.
Therefore, the research question is not simply:
“Is logistics efficient?”
Instead, it becomes:
“How do logistics activities affect the effectiveness of cash flow and working capital management within supply chains?”
IV. LITERATURE REVIEW
1. Supply Chain Finance
Hofmann positions Supply Chain Finance (SCF) at the intersection of logistics, supply chain management, and finance, emphasizing the planning, coordination, and control of financial resource flows among firms within a supply chain.
2. Financial Flow in Supply Chains
Pfohl and Gomm developed an SCF framework aimed at optimizing financial flows and capital costs throughout supply chains.
3. Cash-to-Cash
Randall and Farris propose Cash-to-Cash (C2C) as a tool for connecting financial management with supply chain management. They argue that coordinating C2C across supply chain partners can generate benefits at the level of the entire supply chain.
4. Working Capital Management
Hofmann and Kotzab examine the role of payment terms in working capital management and argue that optimizing the interests of an individual firm in isolation may adversely affect the overall supply chain.
5. Collaborative Working Capital
Zenkevich and Ivakina develop an interorganizational approach to working capital management, using Supply Chain Finance mechanisms such as factoring, reverse factoring, and inventory financing to optimize cash flows.
6. Research Gap
Based on the existing literature, the research gap can be identified as follows:
Research on Supply Chain Finance has developed considerably from a financial perspective; however, further clarification is needed regarding the mechanisms through which specific logistics capabilities and activities affect cash flow and working capital.
In particular, it is necessary to examine the following chain of relationships:
Logistics Capabilities
Operational Efficiency
Financial-Flow Efficiency
Working-Capital Efficiency
Firm Performance
This relationship constitutes the central focus of the proposed study.
V. RESEARCH OBJECTIVES
1. General Objective
To develop and validate a model for applying logistics to cash flow and working capital management within supply chains.
2. Specific Objectives
a. To systematize the theoretical foundations of Logistics, Supply Chain Finance, and Working Capital Management.
b. To identify logistics factors that may influence cash flow management.
c. To develop a model describing the relationship between logistics and cash flow management effectiveness.
d. To measure the impact of individual logistics factors.
e. To examine the mediating role of the Cash Conversion Cycle.
f. To identify the mechanism linking logistics → cash flow → working capital → financial performance.
g. To propose an integrated logistics–finance management model.
VI. PROPOSED RESEARCH MODEL
The proposed model is consistent with existing Supply Chain Finance research, in which working capital and cash flow management are examined from an end-to-end supply chain perspective rather than solely at the level of an individual firm.
VII. RESEARCH HYPOTHESES
H1: Logistics Integration has a positive effect on Financial Flow Efficiency.
H2: Inventory Management Efficiency has a positive effect on Working Capital Efficiency.
H3: Transportation Efficiency has a positive effect on Financial Flow Efficiency.
H4: Order Fulfillment Efficiency has a positive effect on Cash Flow Management.
H5: Information Visibility has a positive effect on Financial Flow Efficiency.
H6: Digital Logistics has a positive effect on Cash Flow Management.
H7: Financial Flow Efficiency has a positive effect on Working Capital Efficiency.
H8: Working Capital Efficiency has a positive effect on Financial Performance.
H9: Cash Conversion Cycle mediates the relationship between Logistics Efficiency and Financial Performance.
H10: Logistics Integration has an indirect effect on Financial Performance through Financial Flow Efficiency and Working Capital Efficiency.
REFERENCES
Hofmann, E. (2005). Supply Chain Finance – Some Conceptual Insights. This work provides an important foundation for positioning Supply Chain Finance at the intersection of logistics, supply chain management, and finance.
Pfohl, H.-C., & Gomm, M. (2009). Supply chain finance: Optimizing financial flows in supply chains. Logistics Research, 1, 149–161. DOI: 10.1007/s12159-009-0020-y.
Randall, W. S., & Farris, M. T. (2009). Supply chain financing: Using cash-to-cash variables to strengthen the supply chain. International Journal of Physical Distribution & Logistics Management, 39(8), 669–689. DOI: 10.1108/09600030910996314.
Hofmann, E., & Kotzab, H. (2011). A Supply Chain-Oriented Approach of Working Capital Management. Journal of Business Logistics, 31(2), 305–330.
Gomm, M. L. (2010). Supply chain finance: Applying finance theory to supply chain management to enhance finance in supply chains. International Journal of Logistics Research and Applications.
Zenkevich, N., & Ivakina, A. (2018). Working Capital Optimization in Supply Chains. Journal of Corporate Finance Research. DOI: 10.17323/j.jcfr.2073-0438.12.4.2018.29-42.
Kouvelis, P. (2023). Supply Chain-Centric View of Working Capital, Hedging, and Risk Management: Integrated Supply Chain Finance. INFORMS.
Wu, L.-C., Eng, T.-Y., & Wang, C.-W. (2024). Working capital management under supply chain disruption: The role of government response during economic uncertainty.
Bui, T. N. (2020). How does corporate performance affect supply chain finance? Evidence from logistics sector. Uncertain Supply Chain Management, 8, 563–568. This study is particularly relevant because it uses data from Vietnam’s logistics sector and employs CCC as a measure of Supply Chain Finance.
A 2025 study published in Finance Research Letters on supply chain resilience, CCC, and firm performance in e-commerce also provides an updated basis for examining the relationship among resilience, CCC, and performance