Exploring Disruptions in Financial Flows Across Supply Chains : The Supply Chain Financial Bullwhip Effect

Following the recession created by the recent global financial crisis, which caused disruptions in the funding markets and in the financial flow level of supply chains, companies were forced to reduce their working capital targets, as well as find new forms of financing their business plans. This inevitably caused a substantial shock in the supply chains across the world thus, creating both an inventory-driven and a financial bullwhip effect. While the previous Supply Chain Management (SCM) research has focused on the bullwhip effect of physical material flows, the existing bullwhip in financial flows has been neglected, despite the crisis-enhanced interest and its growing significance. The main objective of this paper is to study the current literature dealing with the interactions among supply chain material and financial flows, to shed light on the increasing amplification of financial distortion along supply chains, caused by the transmission channels of financial shocks at the micro (firm) and the macro (economy) level and to build on current theory by introducing the supply chain financial bullwhip effect (SCFBE) in the contemporary supply chain scientific agenda