MANAGE RISK EXPOSURE
CONTRACT MANAGEMENT
68 will respond well to management techniques and help them anticipate how successful a supplier finance programme is likely to be .
The reason these are so important is that supply chains are , of course , built on relationships . Ideally , any solution should be arrived at and implemented in collaboration with suppliers .
For example , many businesses first decide to use supply chain finance to provide preferential payment terms for key suppliers , while also allowing them to boost working capital .
Its uses can be far more nuanced than this , but the way it is traditionally introduced demonstrates how any tactic aimed at optimising a supply chain – and indeed the whole supply chain strategy – should be about creating a win-win arrangement for both parties .
MANAGE RISK EXPOSURE
When working with international supply chains , larger scale can potentially generate cost savings but operating across borders can also increase risks around using new suppliers based in unfamiliar geographies .
This could be caused by anything
from geopolitical uncertainty to the level of working capital available to local suppliers . Then there are risks caused by dealing with small and medium-sized suppliers , which might be particularly vulnerable to liquidity pressures .
What is important is not that firms try to eradicate these risks in all circumstances , but that these hurdles are considered and planned for .
By allowing key suppliers to secure an earlier injection of cash flow on
MAY 2019