Supply Chain Game Changer

22 September 2021

Supply chains are showing signs of creaking, with cracks surfacing at every stage of the cycle, right from raw material availability, inventory management, labor shortages, pandemic /Covid issues, to delivery issues.

Supplier working capital, worn down by the extended period of Covid, has resulted in a cash crunch at suppliers’ end resulting in shortages at the very beginning of the supply chain.

Many corporates believe that suppliers can access capital markets and bank lending as they do. The reality is that financial institutions have, their own cost base challenges, focused all their energies on servicing corporates with larger deals. That means the suppliers to those corporates do not have access to working capital to respond to client orders.

Crossflow has recently set up a program for a large UK based retailer, supporting a step change in product availability which is being achieved through working capital driver mechanisms. This is being achieved by offering advance/early payments for its 85 global suppliers (75% of its total supplier base) in the different stages of the transaction right through from the initial purchase orders through to the final invoice transaction. Through Crossflow’s program, the retailer has achieved as standardized payment term of 90 days across all its global Suppliers and has also ensured that its product availability is secured by 60% for the next 3 months, with Christmas peak season round the corner, making sure, that it is given priority by its suppliers. The retailer wins by leveraging its financial clout for the benefit of their suppliers.