Introduction Supply Chain Finance SCF Lecture 13 Jan

Introduction Supply Chain Finance (SCF) Lecture # 13 Jan H Jansen E-mail: jansen@han. nl

Round # 7 The Cool Connection

Lectures period 2 or 4 Lecture Topic Preparation 8 Introduction to value Cool connection round 1 Assignment 6 9 CAPM & EVA Cool connection round 2 Assignment 7 10 SCF instruments Cool connection round 3 Assignment 8 EBA SCF 11 Blockchain in SCM & SCF Cool connection round 4 Cool connection round 5 Cool connection round 6 Cool connection round 7 Test exam Case Heineken 12 13 14 Case Unilever Case Philips Test exam Exam case

Round # 8 The Cool Connection

Source: http: //www. treasury-management. com

Assignment 7

Lecture 13

Case study Philips

Source: https: //www. google. com/finance? q=NYSE%3 APHG&ei=ICBNV 8 mm. Fd. WBsg. Gzl. Kao. Bw

Source: Philips annual report 2014

Capital Source: Philips annual report 2014

At the height of the economic crisis, it was critical for Philips’ suppliers to have access to funding to ensure the continuity of supplies to the company, thereby reducing Philips’ risk exposure. The company therefore launched a supplier financing programme, which presented an opportunity for Philips to address its working capital needs at the same time Source: http: //treasurytoday. com/adamsmith/2010/winners/wcm-fsc-highly-commended-philips

Citi’s supply chain solution, which is enabled through a webbased application, allows Philips to upload approved invoices for their suppliers in multiple currencies through a host-tohost connection. The suppliers can elect to discount their receivables, giving Philips’ suppliers automated or optional early payment flexibility. No Citi accounts needed to be opened by suppliers under the programme. Source: http: //treasurytoday. com/adamsmith/2010/winners/wcm-fsc-highly-commended-philips

1. Liquidity at the click of a button. Suppliers are able to receive financing for their receivables the same, or at latest, the next business day from when Philips uploads payments into the platform. 2. Asia linkage. The existing European technical solution was enhanced by linking with the local Asia SCF product processor to reach Philips’ global suppliers. The Asian suppliers benefited from a local feel to the solution as they only engaged with the local Citi branch. Philips on the other hand achieved a single window interface for all their purchases. 3. Supplier selection. Citi and Philips worked together to select suppliers that would create maximum value and cash flow benefits for Philips and its suppliers. This resulted in gaining acceptance from some of their global suppliers, which took the facility utilisation to 100% within three months of launching the programme. 4. Standardisation of payments interface. Although the supplier financing programme introduces a new process operationally, Philips and Citi worked closely together to integrate the SCF process into Philips treasury’s existing way of working, thereby keeping Philips’ central payment factory intact and yet creating a fully automated process for delivering, approving and paying the invoices. Source: http: //treasurytoday. com/adamsmith/2010/winners/wcm-fsc-highly-commended-philips

Benefits at a Glance: • • • Strengthen relationships with suppliers Extend Days Payable Outstanding (DPO) Reduce the Cost of Goods Sold (COGS) Streamline administrative processes Keep supply chains moving Source: https: //www. citibank. com/tts/solutions/trade_finance/financing/docs/citi_supplier_finance. pdf Video CITI Supply Chain Finance Platform http: //www. citibank. com/transactionservices/home/supplier_finance/email/supplier/index. jsp

Source: https: //www. citibank. com/tts/solutions/trade_finance/financing/docs/citi_supplier_finance. pdf

Source: www. theiirc. org

Six Capitals (Gleeson-White) • Financial capital • Equity • Debt / Loans • Manufactured capital • Physical goods • Services • Intellectual capital • Knowledge • Patents, copyright, etc • Human capital • Competencies • Social & relationship capital • Instituitions • Stakeholders & networks • Nature capital • Renewable & non-renewable environmental resources

Source: 2016 Annual Report Philips