SCF BAROMETER

Download 2 Nov 2017 ... The SCF Barometer - introduction. Introduction. Goal of the survey. Understand the current position and awareness of. SCF, a...

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SCF Barometer 2017/2018

Introduction

Page 2

The SCF Barometer - introduction SCF Barometer 2017

Goal of the survey Understand the current position and awareness of SCF, and implementation drivers & critical factors

Profile of the respondents • Diverse range of functions • Variety of industries & size • Global view • Varying levels of SCF maturity

Key questions • What are the reasons to implement or investigate a SCF implementation? • On what basis are suppliers eligible to join the SCF programme? • What are the key success factors and bottlenecks? • Which department is initiating the SCF programme? • How will the SCF programme develop? SCF Barometer

November 2017

Supply Chain Finance Programme

Page 3

Despite a changing landscape, reverse factoring on a bank platform remains the most widely used SCF option SCF option awareness: ‘We know well how it works’

SCF technology used amongst Rev. Fact. users 3%

Invoice auction

7%

15%

P2P

7% Pre-shipment financing

18%

ERP Inventory finance

22% 10%

In-house Collaborative logistics

Dynamic discounting

Bank platform

32%

51%

59%

3P 14%

Reverse factoring

SCF Barometer

71%

November 2017

Supply Chain Finance Programme

Page 4

Working capital optimisation is (still) the most important reason for implementing a SCF programme Principal reasons for implementing a SCF programme Working capital optimisation Liquidity needs of our suppliers Supplier relationship improvement

Key impact

Improving our EBITDA / cost reduction

High impact Improve Supply Chain stability

Medium impact Low impact

Utilising cash surplus

No impact Changing market dynamics Potential credit rating agencies approach to SCF programs Legislation on SCF programs 0%

SCF Barometer

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

November 2017

Supply Chain Finance Supplier Base

Page 5

For 1/3 of the SCF programmes all suppliers are eligible Supplier selection criteria - Respondents running a SCF programme 31%

Spend value, geography and strategic relationships are key drivers for supplier selection

18%

17% 15%

7% 6% 4% 1%

All suppliers are eligible

SCF Barometer

Suppliers with a Suppliers of a Suppliers in specific Suppliers for Suppliers in specific certain amount of specific size (annual geographies specific business spend categories spend revenue) units / divisions

Suppliers with a strategic relationship

Suppliers with a specific risk profile

November 2017

Supply Chain Finance Supplier Base

Page 6

A typical SCF programme for respondents covers 20% of spend value and less than 100 suppliers Spend covered by SCF: actual vs expectations

Number of suppliers who joined the programme

77% 7% 7%

64%

Up to 25 Up to 100

14% 48%

Up to 250 Up to 1000

18%

15%

18%

24%

8%

Up to 20%

21% to 40% SCF in place

SCF Barometer

More than 1000

41% to 100%

Interested in SCF

November 2017

Supply Chain Finance Success Factors and Bottlenecks

Page 7

Supplier appetite, on boarding process, and business case are the key success factors for a SCF programme Key success factors

Factor

Bottlenecks

Supplier appetite (for cash / SCF)

(69%)

On boarding process of suppliers

(50%)

31%

Business case (money and time)

(47%)

16%

Commercial offering to suppliers

(41%)

44%

IT/technology

28%

(28%)

Sponsorship/internal buy-in

28%

(28%)

Resources / project management

(28%)

Procure-to-Pay process

(38%)

(9%) (6%)

SCF Barometer

34%

25% 19%

Legislation

Credit rating agencies approach

16% 0%

November 2017

Supply Chain Finance Success Factors and Bottlenecks

Page 8

SCF programmes are generally viewed as a success What are the future plans with respect to Supply Chain Finance?

Is the SCF program in place a success? 39%

56%

56%

Yes

44%

Implement other SCF solutions Extend the program

38% 17% 6% 38%

Partly

25% 58% 17%

6%

No SCF Barometer

100%

Continue the program Implement other SCF solutions Extend the program

>80% of participants plan to extend their programme or implement other SCF solutions

Continue the program Extend the program November 2017

Supply Chain Finance Barometer

Page 9

There is an increasing awareness over the past few years, driving appetite for introducing or extending SCF solutions

56% consider the programme to be a full success

28%

of the programmes have over 100 suppliers on the platform

33%

implemented the programme within a 6 month timeline

2016 survey

2017 survey

53% of the companies with a SCF programme in place have revenues >€5,000m

SCF Barometer

84% intend to enhance its SCF solutions

84% of the respondents not having a SCF programme are interested in implementing

November 2017

download the report from scfacademy.org

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