04 May 2012 Free supply chain finance white paper
Supply Chain Finance and Working Capital Management are important tools for any business and in 2012, there are compelling reasons why now is the time to adopt financial supply chain management tools in earnest and today we are delighted to make available a new white paper “Supply Chain Finance – extracting value from the supplier tail”
There is an economic perfect storm. A combination of constrained liquidity – business struggling to maintain a line of credit – and very low interest rates. This makes it less attractive for businesses to hold on to cash but very expensive to borrow.
The ability for a buying organization to leverage Supply Chain Finance is predicated on the assumption that you are able to manage accounts payable efficiently and effectively, which in turn is reliant on purchase to pay process being sound. This is rarely the case and poor P2P processes can be a serious blocker for some areas of spend.
But not all areas of spend are created equally. For some categories of spend the balance of power between the buyer and supplier can make strategic relationships untouchable and, where hard core supply chain process are in place, the complexity of the P2P process makes it difficult to manage.
In contrast, there is one area that is often overlooked. The so called “supplier tail” – the 80% of suppliers that represent 20% of spend. Too complex to be considered by many, the fact is that the supplier tail represents one of the most important areas of spend for Supply Chain Finance and it can provide rich pickings for those looking to enhance their working capital management strategy.