Banking

Supply Chain Finance - What's It Worth?

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Executive Summary

Supply Chain Finance (SCF) represents an innovative opportunity to reduce working capital. Its underlying mechanism is reverse factoring making the technique buyer-rather than supplier-centric. Implementing SCF is a difficult and time-consuming task that requires top management attention. Yet, it promises significant savings. The survey results show that, on average, companies reduce working capital by 13% and suppliers reduce working capital by 14%. Three factors differentiate successful implementations of SCF from less successful ones: Choosing the right banking partner, ensuring CEO sponsorship, and involving at least 60% of the supply-base.

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