Over the years, supply chain finance has emerged as a bridge for buyers and suppliers, proving a range of finance and risk mitigation solutions to optimize the supply chain. As the global economy is currently undergoing turbulent times, supply chain financing will become all the more important. As we enter a new year, there are certain trends that we can expect to shape supply chain finance. 1. Healthy collaboration between advanced technologies and human capabilities. While technology is automating payment exchange and history, documentation, data analysis, and other processes, a workforce intervention with capabilities such as critical thinking, logical implementation, and client relations is a prerequisite for the success of the business. The biggest performance improvements happen only when machines and humans work in harmony, improving each other’s strengths. 2. Enhanced risk management solutions. The pandemic highlighted the risks to global supply chains as organizations struggled with disruptions. In the coming year, businesses will take this into account and work toward creating a holistic ecosystem with better risk management and risk mitigation solutions. An “always-on, always-ready” solution will become a needed asset to provide timely action when disruptions and changes gain momentum across the globe. It enables organizations to get an extended view to continuously monitor and reach new supplier tiers and gain higher visibility to the supply base. Furthermore, technologies such as machine learning and artificial intelligence help assess credit risk and predict frauds and threats in real time. 3. Larger supplier pools. Accelerated digitization and collaboration will create a wide network with alternate suppliers, stakeholders, and facilitators. 2022 will bring a massive shift toward a “multiple-choice quotient” with expanded reach and many players providing higher value, improved financing, and better working capital. 4. Changing needs. The past two years have led to new habits, needs, and demands among companies across sectors. With such close-knit networks of suppliers and buyers, it is imperative for businesses to take the time to understand the evolving needs of buyers. COVID lockdowns and subsequent economic breakdowns, disruptions, and irregularities have been a driving factor in the changing behavior across supply chains and it falls to supply chain financing to ensure that these new capacities can be developed. 5. Regulating and optimizing compliance concerns. The past few years saw organizations implement automation strategies before evaluating compliance needs. The new era calls for the reverse. With government mandates and regulations changing constantly across geographies, global invoicing and tax compliance are becoming increasingly complex and fragmented. 2022 will see a transformation in business strategies where global organizations prioritize compliance resolutions in their automation approach. —Kunal Ahirwar, CEO and Co-Founder, Earnvestt Technologies 5 TRENDS TO WATCH IN 2022
When bringing suppliers onto the platform, education is key, Feather says. One common area of focus is helping suppliers weigh the cost of the transaction fee against the benefit of improved cash flow. Another focus is the flexibility and control over cash flow they’ll gain, especially when many are facing ongoing disruption and inflation. AN SCF ROKU SCF programs have come in for some criticism. Over the past year or so, the market had to navigate the collapse of Greensill Capital, which fell under the broad umbrella of a working capital provider. However, Greensill was “narrowly focused on lending to a small number of very high-risk companies,” Dunn says. A more minor complaint is the lack of a single dashboard for all SCF arrangements—essentially, “a Roku for SCF,” Dunn says, referring to the device that aggregates content from multiple streaming services. Currently, if a supplier has some customers on one SCF program and other customers on another solution, it has to access each program separately. Given the growth in SCF, its benefits appear to more than compensate for any shortcomings. As a just-in-time approach to inventory management has shifted to just-in-case, both buyers and sellers face pressure to acquire or sell more goods, Monaghan says. SCF helps companies on both sides of the equation. Over the past 15 years, organizations have had to navigate the financial crisis and pandemic, among other shifts in the business world. “What stands out for both buyers and suppliers is that needs change over time,” Feather says. While working capital might not be a high priority for some businesses at some points in time, that can quickly shift. Early in 2020, the pandemic generated massive uncertainty, and SCF activity jumped. Feather notes: “Having access to supply chain finance gives a buffer against a changing business climate.” n
February 2022 • Inbound Logistics 45
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