Supply Chain

I went into a supermarket recently and helped myself to £50 worth of food. Rather than going to the tills to pay, I approached a security guard and told him I had no intention of paying and unless he allowed me to leave the store without paying, I would do my weekly grocery shop somewhere else. Oddly enough, he didn’t appreciate my position and I was forced to leave the store empty handed. And it is odd that he didn’t understand the point I was making because this same retailer does exactly the same thing with its suppliers. It has become common practice amongst some retailers to demand cash from suppliers or insist that outstanding debts are written off in return for a continued relationship. Only this week, the BBC reported that Premier Foods, one of the UKs biggest manufacturers, has been asking suppliers to pay to continue to do business with them. You can read the full story here but it was the wording of a letter to suppliers that the BBC claim to be from Gavin Darby the CEO of Premier food that I found quite shocking: “We require you to make an investment payment to support our growth” he apparently wrote. It isn’t even subtle.

[caption id="attachment_9451" align="aligncenter" width="413"]Something familiar out of context can have a dramatic impact Something familiar out of context can have a dramatic impact[/caption] Joe Hyland, CMO at Taulia, recently wrote an excellent piece about industry disruption in which he highlighted three of the characteristics of a truly disruptive strategy. Essentially, Joe advises: 1. Don’t simply reinvent the wheel. 2. Don’t plagiarize an existing model and 3. Don’t make incremental changes – be bold. I’d agree with all of that but there’s something that Joe didn’t say – perhaps because he didn’t want to blow the Taulia trumpet too overtly – so I’m going to say it for him.

On the back of the extraordinary announcements over recent weeks , MasterCard and Basware have just declared another supply chain finance deal. It's a big deal and it's another sign if we needed it that products and services providing working capital support to business is one of the faster growing areas in B2B. I chatted to Esa Tihilä, CEO of Basware and Hany Fam, President, Global Strategic Alliances at MasterCard last week about this new partnership. It's good news for Basware - they now have an important new string to their bow, but I think it's even better news for MasterCard who couldn't have chosen a better partner.

Q4 2013 may well be remembered as the inflexion point for AP automation and supply chain finance. The synergy between e-invoicing and supply chain finance (SCF) has been recognized for some time but the reality of business is that despite the benefits staring us in the face, it takes time to put the pieces together and for it to become a reality. Software needs to be developed or adapted, marketing campaigns crafted and pilot programmes need to run their course. This all takes years. So when we see solutions emerging and new offerings launched, it’s not because everyone has suddenly seen the light – the early adopters saw the light a long time ago and what we’re seeing now is the culmination of years of effort. The OB10 deal announced last week follows two years of behind the scenes discussion. Tradeshift’s $3bn fund to support small business is the realization of a vision that Christian Lanng shared with me about 3 years ago and just this week a new player on the scene, Crossflow Payments, emerged into the fading light of late summer after 3 years of research and development.  I met Tony Duggan, the CEO, this week in The City of London to understand what they have to offer.