This week’s announcement by India – the world's second-largest producer of wheat – that it would suspend all exports in the wake of a poor harvest has added to concerns over food price inflation. With supplies from the world’s number-one producer – Ukraine - impacted by conflict, India’s aim is to protect its domestic wheat price from the near 40% increase in global prices seen already this year. While India already retains most of its wheat production for domestic consumption, its decision to ban exports is a stark reminder of the fragility of global supply chains.
The global nature of major industries, which rely on networks of suppliers, distributors, and customers in every corner of the earth, requires each link in the supply chain to function efficiently for the business to prosper. For example, within 24 hours of India’s decision the chief executive of Greggs warned shareholders that the price of some of its products could rise by as much as 10%. Perhaps few of Gregg’s customers would equate sausage roll price inflation with Ukrainian and Indian wheat prices … after all, the UK produces over 14 million tonnes of wheat a year, right? But this underlines the reliance that many businesses have on factors beyond their immediate control, in the pursuit of delivering a great product at a great price.
What is the answer? It is easy to point to the unusual times we find ourselves in – an almost perfect storm of post-Brexit, post-COVID, geopolitical uncertainty. But smart businesses succeed by working closely with their suppliers, by predicting the unpredictable, by feeling uncomfortable when things are going well (if you haven’t read Who Moved My Cheese, we recommend it).
Access to supply chain funding is one of the tools that helps overcome the uncertainties that companies face from time to time. At Crossflow, we have created a marketplace for working capital funding that can transform a supplier’s cash flow as well as benefit the corporate’s balance sheet, while improving supplier engagement. Uniquely, the Crossflow platform through its algorithms automatically selects the lowest cost of funding for suppliers. This means that suppliers can go “hands free” on accessing working capital and instead focus on making great products and delivering great services to their customers.
Please contact us for more information on how we can help you and your suppliers optimise your working capital.
Tony Duggan is co-founder and CEO of Crossflow. He served as Supply Chain Director at Wickes and B&Q prior to serving as Product Development Director at SWIFT, the global banking network. He also managed an outsourced fintech development project for HSBC in Hong Kong.