Supply Chain Finance
Advisory
Demystifying supply chain finance*
Insights into the what, why, how, where and who
Table of contents
The heart of the matter
The emerging Supply Chain Finance (SCF) tool set.
An in-depth discussion
2
SCF—what it is, why it’s important, and how it works.
What this means for your business
4
Reaping the end-to-end benefits available through effectively managed SCF solutions.
10
March 2009
The heart of the matter
The emerging Supply Chain Finance (SCF) tool set.
2
Times are tough. Capital is more expensive these days and access to it is more difficult. Demand is dropping off, customers are paying more slowly and working capital is being tied up in languishing inventory and slow-moving receivables. As a result, companies are looking inward for ways to release trapped cash from operations. Going beyond payables and receivables, today’s CFOs and Treasurers are taking a fresh look at how their physical supply chain is impacting their companies' cash flow and working capital management. Over 70% of respondents to a recent Aberdeen Group survey said their companies view working capital optimization as a high priority.1 For decades we have witnessed companies taking an ineffective “now we focus, now we don't” approach to managing their working capital needs—focusing on collections, payables, and inventory during periods of cash constraints and relaxing, even losing, that focus during times of easy access to financing and liquidity. But now, even well-managed companies are being forced to consider embedding effective working capital management and associated tools into sustainable processes to eliminate those historic ebbs and flows and minimize related business risk across their customer and supply chain base. Rising interest in SCF. Concerned about the rising risk in their supply chains stemming from the economic stress on suppliers, volatile commodity and energy prices, and broadbased financial turmoil, today’s
Demystifying supply chain finance*
Insights into the what, why, how, where and who
Table of contents
The heart of the matter
The emerging Supply Chain Finance (SCF) tool set.
An in-depth discussion
2
SCF—what it is, why it’s important, and how it works.
What this means for your business
4
Reaping the end-to-end benefits available through effectively managed SCF solutions.
10
March 2009
The heart of the matter
The emerging Supply Chain Finance (SCF) tool set.
2
Times are tough. Capital is more expensive these days and access to it is more difficult. Demand is dropping off, customers are paying more slowly and working capital is being tied up in languishing inventory and slow-moving receivables. As a result, companies are looking inward for ways to release trapped cash from operations. Going beyond payables and receivables, today’s CFOs and Treasurers are taking a fresh look at how their physical supply chain is impacting their companies' cash flow and working capital management. Over 70% of respondents to a recent Aberdeen Group survey said their companies view working capital optimization as a high priority.1 For decades we have witnessed companies taking an ineffective “now we focus, now we don't” approach to managing their working capital needs—focusing on collections, payables, and inventory during periods of cash constraints and relaxing, even losing, that focus during times of easy access to financing and liquidity. But now, even well-managed companies are being forced to consider embedding effective working capital management and associated tools into sustainable processes to eliminate those historic ebbs and flows and minimize related business risk across their customer and supply chain base. Rising interest in SCF. Concerned about the rising risk in their supply chains stemming from the economic stress on suppliers, volatile commodity and energy prices, and broadbased financial turmoil, today’s