Procurement Professional is the official publication of CIPS Australasia

Supply chain finance has potential

17 Aug 2010

Source: Procurement Leaders

Though it has been treated with a range of cynicism, deference and ignorance, supply chain finance has been brought to the attention of many businesses in the UK and recently the Bank of England has labeled it as a tool with a lot of potential.

In conjunction with the publishing of a report by the Association of Corporate Treasurers into the viability of supply chain finance (SCF), Paul Fisher, executive director, markets and member of the Monetary Policy Committee, Bank of England spoke positively about its wider adoption.

For UK supermarket chain Sainsbury's, which launched its supplier finance platform three years ago, educating suppliers in SCF has been a challenge, but it has gained traction both in the business and among suppliers.

"We've pushed quite hard to get it on to the agenda with the suppliers and tell them the benefits to their cashflow, and to discuss whether they want to do trade invoicing," says Darren Clark, assistant group treasurer at Sainsbury's.

As procurement looks to its supply chains to compete, especially in the case of a company like Sainsbury's which resides in a market where very few major competitors offer a similar platform, the organisation is looking to use this as differentiator.

It makes sense then, that procurement's role in the wider uptake is crucial and CPOs have a key part to play in communicating its virtue to the rest of the business.

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