Supply Chain Finance: A Standard Business Process?

I’m a slow walker, but I never walk back– Abraham Lincoln

Not by a long shot, at least if you purview is the Global 2000. Yet, there seems to be no reason why Supply Chain Finance shouldn’t be a standard business process. It requires very little investment by the buyer and reduces cost, capital and risk throughout the supply chain. The benefits are significant, often reaching into the hundreds of millions of dollars. Further, Supply Chain Finance provides multiple benefits for suppliers and supplier participation generally is optional. Looking a little deeper we can see that Supply Chain Finance is in fact approaching standard business process status in several industries. In appliance manufacturing, all three global leaders have implemented a Supply Chain Finance program. In DIY retail, two of the top three global retailers offer Supply Chain Finance options to their suppliers. In heavy truck manufacturing it’s 6 of the top 8, including Volvo AB and Caterpillar. In CPG, 5 of the top 10. It certainly is a standard process in the US auto parts retail market as all of the leading firms utilize Supply Chain Finance solutions. These five industries give us a glimpse into the future of Supply Chain Finance.