[Editor’s Pick] Bank on It: How Supply Chain Finance Supports Today’s Strategic Priorities

Note: Today’s post is part of our “Editor’s Pick” series where we highlight posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. This recent post by Heidi Benko from Infor’s blog discusses why supply chain finance is becoming important, how it works, and its benefits.

Resiliency, sustainability, and business growth are all top-of-mind issues for today’s C-level executives who must navigate increasing economic pressures and market expectations. These are volatile times for businesses in many industries, from fashion and footwear to electronics and manufacturing. Fortunately, supply chain ecosystems can make tough times easier, including opening doors between financial institutions and suppliers. As a result, supply chain finance can give suppliers access to necessary funds and help meet sustainability goals. It reinforces that investing in supply chain partnerships pays off. 

Supply chain finance is becoming increasingly important as companies and their extended supply chain partners face ongoing global disruptions and new sustainability mandates. Building a resilient network of suppliers and funding environmental, social, and governance (ESG) goals requires capital. Resources can be stretched thin from today’s high cost of fuel, inflated prices, and high interest rates. So, turning to financial institutions to help bridge gaps may be necessary. Supply chain finance helps banks and suppliers connect, sharing data and transaction insights in a way where buyers, banks and suppliers benefit. 

Benefits include:

• Suppliers have access to funds and materials needed to fulfill large orders  
• Buyers have greater confidence that suppliers will ship on time and in full
• Financial institutions have visibility and increased confidence in suppliers
• Companies improve cashflow to help meet compliance and ESG goals 
• Smaller companies can leverage the credit strength of larger partners  
• The supply chain is more resilient, with highly reliable partners
• Buyers are able to free up working capital
• The entire supply chain can take advantage of growth opportunities 

Aligning financial institutions with suppliers helps ensure funds are in place when and where they are needed to keep the supply chain moving at the speed of commerce. Purchases, order fulfillment, and shipping are all time sensitive. Gaps must be eliminated, including the gaps between when a supplier needs to buy materials and when the product invoice will be paid. This can be months, creating a stifling burden to suppliers, small to mid-sized businesses, or start-ups in emerging economies. Supply chain finance eases the pain. 

Here’s how it works: Read More at Infor’s Blog