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Calculum Inc

Calculum x PwC x CRX Markets

Unlocking Working Capital Efficiency through Supply Chain Finance: A Strategic Approach

February 21, 2024
Read time:
7 min

Calculum Inc

Press kit

March 5, 2020
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1 min

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In the ever-evolving landscape of Supply Chain Finance, we turn our attention to the experts at PwC, CRX and Calculum, as they delve into how organizations can effectively improve their working capital management in this article.

In the current environment of increasing interest rates, inflation and supply chains under pressure, effective management of working capital has become a key factor for maintaining a competitive edge. 

Supply Chain Finance, also known as Reverse Factoring or Supplier Finance, offers a strategic set of solutions that corporate treasurers and procurement professionals use to optimize Working Capital and generate free cash flow. 

In recent years, Supply Chain Finance has become an important tool for improving financial efficiency and gaining competitive advantage. It relies on leveraging the financial strength and creditworthiness of the buying entity to optimize its payment terms with suppliers, whilst also providing suppliers with access to essential working capital.

Supply Chain Finance: A Win-Win Proposition for Buyers and Suppliers

The benefits of Supply Chain Finance are varied and extensive, offering advantages to both buyers and suppliers. 

For buyers, it presents an opportunity to:

  • Boost cash flow by fine-tuning payment terms without negatively impacting suppliers
  • Reduce reliance on traditional financing methods, such as bank loans
  • Strengthen relationships with key suppliers

On the other hand, Supply Chain Finance can empower suppliers to:

  • Increase their access to working capital, thereby equipping them to fulfill their financial commitments and invest in expansion
  • Enhance their bargaining power with buyers
  • Minimize the risk associated with late payments

Unleashing the Power of Supply Chain Finance: A Structured Approach to Implementation 

The successful deployment of a Supply Chain Finance program requires a systematic approach that includes several key steps:

  1. Planning and Analysis: This initial phase involves a thorough review of the company’s supply chain, identification of potential opportunities for Supply Chain Finance, and an evaluation of the financial implications
  2. Choosing Financing Partners: This important step involves carefully selecting financing partners who can provide competitive financing terms and have a strong history in Supply Chain Finance
  3. Technology Integration: The integration of Supply Chain Finance technology platforms ensures a smooth program launch and sets the stage for efficient program management
  4. Supplier Onboarding: This essential process involves informing suppliers about the benefits and procedures of Supply Chain Finance and then onboarding them, which is crucial for the program’s success
  5. Monitoring and Performance Evaluation: Ongoing monitoring of the program’s performance and making necessary adjustments are important to maintain its long-term effectiveness

Anticipating Changes: Emerging Trends in Working Capital Management

Supply Chain Finance is already a key tool in corporate finance, with technologies enhancing its efficiency and accessibility. This is expected to accelerate its adoption, enabling more companies to optimize working capital, strengthen supplier relationships, and improve financial health.

Emerging trends in working capital optimization include the adoption of multi program setups that offer flexibility and scalability, and the re-evaluation of strategies due to changing interest rates. 

Smaller companies are setting up their own programs, while regulatory changes and increased reporting requirements are influencing operations.

Considerations of environmental, social, and governance (ESG) factors, as well as diversity, equity, and inclusion, are becoming increasingly important. Companies are diversifying their funding sources and investing in data management and analytics.  In addition, the focus on Supply Chain Finance is expanding to include tier-2 suppliers and beyond, with artificial intelligence and machine learning also being used to get more insights in working capital optimization.

Supply Chain Finance: A Strategic Approach to Enhance Financial Performance and Market Competitiveness

Supply Chain Finance is proving to be a valuable tool for businesses aiming to optimize their working capital management and enhance their financial performance. By carefully assessing the potential benefits and effectively addressing the associated challenges, companies can strategically employ Supply Chain Finance to achieve their objectives and sustain their competitiveness in the market. It’s not just about maintaining operations, but about advancing them - and Supply Chain Finance is playing a key role in this process.

About the Authors

Pierre-Louis Frugier
PwC Consulting Switzerland, Manager

Pierre-Louis is a manager with PwC Switzerland in the Treasury and Commodity trading consulting team. His focus is on business processes and technology in the area of working capital financing, treasury and commodity management.

Throughout his career, he has worked at a multinational corporation in the Structured Finance team, leading Supply Chain Finance and Receivables financing programs in London. He has also worked with many international corporations leading transformation projects covering strategic, organizational, process and technological changes.

Daniel Bischof
Head of Business Development, CRX Markets

Daniel brings a wealth of experience since 2010, starting at Deutsche Bank in roles such as Product Specialist. His journey continued at CRX Markets AG, where he excelled from Sales Manager to Head of Business Development. 

Oliver Belin
Calculum, CEO 

Oliver has over 15 years of experience in supply chain finance and credit finance solutions. He has worked for numerous leading organizations in trade finance and had key roles with PrimeRevenue, GSCF, Sumitomo Bank, and Marco Polo Network.
In 2008, he founded Swiss Commercial Capital, a company specialized in trade finance solutions, which was successfully sold to Macquarie Bank in 2011. Oliver is the author of two books Supply Chain Finance Solutions and a frequent speaker on this topic.

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