As they say, ‘necessity is the mother of all invention’ and with everything that’s been thrown at the global supply chain over the last 3 years, invention or hard change has happened because it had to for global supply chains to survive and thrive. From exchanging efficiency for resilience and complexity for simplification Technology is having a big part to play in the future of Corporate and Supplier agility
Global Supply chains are still under pressure and the financial imbalance of payments to suppliers and vendors alike are adding an enormous strain to business security in the short term. An example of this is some of the large retailers who have misjudged their demand vs supply as well as short-term improving supply chains which left them with warehouses full of stock that will have to be discounted or written off. At the same time with buyers choked warehouses, suppliers are being asked to delay deliveries to the corporates leaving them with potential storage costs as well as the inability to submit invoices for the shipment delaying payment further.
In a recent white paper by Reuters and Maersk Supply disruption causing sourcing strategy shift they find a clear 'generational shift' in sourcing strategy, caused by supply chain disruption.
The report states that these shifts are the result of supply chain disruptions, finding delays to raw materials (70%), shipping (68%), and components or finished goods (63%) as the key factors.
Even with supply chain technology which stretches from near fully automated container ships and Ports to Blockchain, fully embedded tracking and ESG software, along with the barriers of the pandemic and the recent global crisis, it has forced corporates and suppliers to overcome and innovate around the disruptions they have faced. Businesses are responding to increased disruption by exchanging efficiency for greater resilience. Some are prioritising costlier near shore suppliers in less risky markets. Such strategies come at a cost. But firms are working to mitigate these costs through investments in technology, simplified and regionalised supply chains, and, in some cases, simplifying the design of goods to make components easier to source. In the automotive markets several brands are now aligning small components like bolts to simplify ordering and even sharing across the marketplace.
As a Microsoft article in the Financial Times this week noted Why smart supply chains are now a retail essential even in the fast turnover sector of Retail, that has recently been accused of greenwashing, have realised that smart, transparent digital supply chains are a must, as knowing your end to end cycle in detail means that certainty and sustainability in the ESG of your supply chain will positively impact your consumers wiliness to purchase more of your goods and sustainably increase your bottom line. Technology will revolutionise the Supply Chain that has been stuck in a manual paper or spreadsheet mode for far too long and with that change, clarity and transparency will liberate spending, investment and purchasing behaviours, so it really is time for everyone to board that digital train.
Although still in its infancy within supply chain, Blockchain will help with moving aside the costly and time-consuming manual and offline approach of sharing information that creates vulnerabilities. The distributed digital ledger delivers transparency, speed & efficiency along with traceability and has also been seen to improve operational efficiency upwards of 30-40% in some areas which means moving suppliers closer to source is now more financially viable.
Supply chain optimisation technology is dramatically improving operations and increasing resiliency for businesses in a wide variety of industries. The visibility and agility that the digital transformation of supply chain processes affords is a vital competitive advantage in a fast-paced market. In all of this though, the threat of real supply chain disruption due to late invoice payments of suppliers and vendors remains a constant. A credit crunch and tighter money in the system means financial relief becomes harder to find for many businesses. An increasing number of suppliers seek additional working capital financing to expand business operations or pursue new market opportunities. But waiting months or even weeks for funding approval from traditional financial services organisations can mean the difference between innovation and potential business closure.
FinTech’s like Crossflow are rising to the challenge. Simplified application processes, rapid approvals and access to competitive funds quickly makes working with digital lenders an obviously attractive choice. Because if you aren’t making it easy for your suppliers to get the funding they need, your competitors certainly will.
That’s why at Crossflow Payments we offer a technology driven global financial marketplace that brings Corporates, their suppliers, and a pool of funders together to help suppliers and vendors gain quick access to low-cost funds for their approved invoices, purchase orders and pre-shipment invoices helping them maintain a healthy working capital balance to weather any storm. Throughout this process we also help corporates increase their overall working capital in a variety of ways to enable financial optimization and flexibility.
Please contact us today to find out more.
Kevin Hayden is an executive level professional with over 35 years of Fintech, Investment & Commercial banking, and software sales & services industry experience, managing key major business and transformation change teams. With an economics and banking background he is driven by challenge and excellence at all levels, he is committed to delivering a long-term partnership with clients that foster trust and build reputations, focused on the transformation of supply chain finance that helps and assists everyone along the journey.