The progression to supply chain event management 1

The progression to supply chain event management 1. SCEM • • 2. Anticipate Analyse Resolve Collaborate Dynamic visibility • Real-time information • Ability to re-plan 3. Static visibility • Where is it? • What went wrong? 1

Supply chain finance 1 Supplier 5 Discounted finance provided Purchase orders Goods/services and invoices Request for discount facility 4 SCF Platform Financial Institution Buyer 2 Confirmation/ approval of invoices 3 6 Invoice payment Main principles: • The supplier benefits from having access to finance at a preferential interest rate linked to the buyers’ creditworthiness. To make this feasible, the buyers’ rating must be better than the suppliers. • The buyer introduces the supplier to the financial institution providing the SCF facility and terms of business are agreed. • The buyer approves the suppliers’ invoices an confirms that it will pay the financial institution for these at a fixed future date. • The supplier sells (discounts) the invoices to the financial institution at a predetermined discount rate and receives the funds straight away. • The buyer pays the financial institution as agreed. • In parallel to the SCF facility, the buyer is typically able to negotiate better payment terms and/or prices with the supplier. Source: PWC, Supply Chain Finance, 2014 2