Supply Excellence — Supply Chain Finance Part II – Using Technology to Your Advantage

Supply Chain Finance Part II – Using Technology to Your Advantage

January 24th, 2008 · by Tim Minahan · No Comments · best practices, supply management

In Aberdeen’s latest report “The 2008 State of the Market in Supply Chain Finance,” the firm seized the opportunity to help organizations embrace SCF programs and the promise of savings and improved financial supply chain efficiencies. The problem to date for organizations is the lack of best practice examples and specific guidelines for the corporate community to follow. Generally SCF projects span multiple departments so it’s hard to understand where the most savings could be derived and where to begin. There’s also confusion about the existing offerings in the services, technology and consulting markets in this area.

As with most major project, establishing a set of critical process and technology capabilities is a must. Take a look at your organization in the areas of process, organization, knowledge and technology – Can you access supply chain financing at various stages? Do you have defined cross-functional goals and metrics? Online visibility into shipments and in-transit inventory? Automated platform to manage AR and AP transactions?

Forty-eight percent of the study respondents report using third party technology to aid in their SCF programs. Thirty percent use in-house developed solutions and twenty-four percent use technology from a financial institution. Regardless of the technology platform, companies adopting SCF technology have reported:

improved staff productivity due to an automated order-to-pay process
few invoice discrepancies
increased visibility into financial supply chain
reduced / re-deployed staff
increased visibility into physical supply chain
improved collaboration with supply chain partners

In the next post, I’ll summarize required actions to address your SCF program, regardless of whether your company falls into the laggard, average or Best-in-Class category. You can download a free copy of the report by clicking here.

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