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Bridging Financial and Operational Gaps in Supply Chain Finance: An Information Processing Theory Perspective

Author

Listed:
  • D. Divya

    (School of Business and Management, Christ University, Bengaluru 560029, Karnataka, India)

  • Rebecca Abraham

    (Huizenga College of Business, Nova Southeastern University, 3301 College Ave, Fort Lauderdale, FL 33314, USA)

  • Venkata Mrudula Bhimavarapu

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Bengaluru 560100, Karnataka, India)

  • O. N. Arunkumar

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Bengaluru 560100, Karnataka, India)

Abstract

This paper explores the integration of financial and operational flows in Supply Chain Finance (SCF) through the lens of Information Processing Theory (IPT). Despite increasing adoption of SCF solutions like reverse factoring and trade credit, existing literature lacks a unified theoretical framework that captures both financial and organizational complexities. Drawing from 47 peer-reviewed articles in leading supply chain journals, this study identifies key SCF dimensions—task characteristics, environment, and interdependence—as primary sources of uncertainty and information processing needs. It then examines how IT systems, coordination mechanisms, and organizational design enhance processing capacity, enabling firms to build SCF capabilities such as risk assessment, supplier onboarding, and financial process standardization. These capabilities facilitate financial supply chain integration through data connectivity, embedded flows, and collaborative planning. The study contributes a comprehensive conceptual model that connects SCF uncertainties, processing strategies, and performance outcomes, addressing theoretical and managerial gaps. It further provides a foundation for future empirical research and strategic design of SCF systems to enhance supply chain resilience and financial efficiency.

Suggested Citation

  • D. Divya & Rebecca Abraham & Venkata Mrudula Bhimavarapu & O. N. Arunkumar, 2025. "Bridging Financial and Operational Gaps in Supply Chain Finance: An Information Processing Theory Perspective," JRFM, MDPI, vol. 18(9), pages 1-19, August.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:9:p:479-:d:1734216
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    References listed on IDEAS

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    1. Christian Busse & Jan Meinlschmidt & Kai Foerstl, 2017. "Managing Information Processing Needs in Global Supply Chains: A Prerequisite to Sustainable Supply Chain Management," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(1), pages 87-113, January.
    2. Chen, Sihua & Du, Jiangze & He, Wei & Siponen, Mikko, 2022. "Supply chain finance platform evaluation based on acceptability analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
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