Study Finds Supply Chain Finance is Key to Improving Supplier Relationships, Working Capital Management

Success in today's unpredictable business environment depends on robust supplier relationships, a keen understanding of risk and skilled management of working capital. How are companies juggling this assortment of critical challenges? What steps are they taking to strengthen supplier relationships and improve working capital efficiency?

New research from CFO Research Services and Prime Revenue offers some insights. For instance, the study found that working capital management is now a high priority for most companies surveyed, and that the vast majority have deployed Supply Chain Finance or are considering doing so.

Here are a few key findings in greater detail:

Most finance executives are focused on working capital management with 81 percent stating it as a high priority.

Of the three levers of operating working capital, two (Inventory and Payables) require working with suppliers and finance executives recognize this as 73 percent of respondents said supplier relationships are also a top corporate priority.

82 percent of respondents have either deployed Supply Chain Finance or are considering doing so.

78 percent of respondents reported that Supply Chain Finance helped strengthen relationships with suppliers and 72 percent stated that SCF also helped improve working capital efficiency.

Two-thirds of respondents feel that the ability to involve multiple banks through a single, open SCF platform is a requirement for successful implementation of supply chain finance programs.

The survey was conducted with 168 senior finance executives representing companies with annual sales greater than $500 Million and average annual sales of approximately $5 Billion. The report, Strengthening Supplier Relationships Through Supply Chain Finance, is available here.

TAGS: Finance
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