Supply Chain Finance

I will quickly try to draft the main points of the recorded webcast - Supply Chain finance

1. Since the credit crisis, our distributors and other channel partners obviously dont have much access to the credit the way they used to have before crisis. It is our responsibility that we help them grow or sustain their business while not blowing our balance sheet

2. The goal is not have lowest inventory levels or the lowest logistics related cost but to have the most optimized "overall financial performance" - revenue growth, operating margin and capital utilization (cash operating cycle, fixed asset utlization)

3. Have to look at the factors or KPIs from an enterprise wise perspective

4. Supply Chain value added = supply chain benefits (point 2) - supply chain costs (transporation, warehouse, administration, labour, working capital finance charge)

5. What we improve supply chain - it will increase revenues, decrease labour cost, decrease logistics cost, decrease inventory levels

6. Great savings can be achieved by reducing inventory, reducing days of sales outstanding, reducing operating expenses, days purchase outstanding,

7. You have got debt, equity and the supply chain cost of capital

HOW TO IDENTIFY IMPROVEMENT OPPORTUNITIES

1. Identify financial driver gap
2. Identify business process gaps
3. Supply chain enhancing initiatives
4. Map the business processes with the KPIs to be achieved ***

8. By paying the suppliers earlier, you are subsidising their liquidity and then they use the same money to purchase goods from your competitors

9. Use the "power of one" - aha moment

10. ALIGN GOALS, ALIGN STRATEGY, ALIGN RESOURCES