In Procurement Leaders’ November/December 2016 issue, Anil Walia, EMEA Head Supply Chain Finance at Deutsche Bank, explains the crucial role supply chain finance can play in the buyer/supplier ecosystem, contributing to the benefit of all involved.
Under the title “Ramping up the synergies in cash-poor times” Walia relates how many of the discussions in which he recently engaged with Chief Purchasing Officers of global companies sounded a note of concern at volatility and complexity in purchasing leading to disruption.
Complexity of technological innovation is also making supply chain finance (SCF) tools increasingly sophisticated, says Walia. However, the fundamental concept underlying SCF is beautifully simple: “Purchasers and suppliers operate in symbiosis, yet often one partner has better payment terms or cheaper financing than the other. By tapping into SCF, these benefits can be shared rather than halved – reducing operational and financial risks for both.”
He sums up: “By extending better financing options in both directions, instead of pitting buyers and sellers against each other, SCF strengthens ecosystems of buyers and suppliers link-by-link.”
You can read Walia’s column in full here (please note that this lies behind a paywall).