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Trends and Concerns in Linking the

Physical and Financial Supply Chains


Key Takeaways Based on 103 Survey Responses

Research Overview
Objective:
Discover current trends and issues in how companies approach the
physical and financial supply chain
Target Industries:
Retail and manufacturing
companies $500M+ in revenue
Target Audience:
Executives responsible for
physical and financial supply
chain
Total Surveys:
103 executive interviews

Industries and Job Functions of Respondents

Source: LTM Research; n = 103

Analyst Perspective
Supply chain finance, done right, can generate strategic value
throughout the P2P lifecycle, particularly in assuring continuity of supply,
reducing COGS, meeting profitability targets, creating more sustainable
supply chains, and reducing time-to-market and lead times.
Bill McBeath, Chainlink Research
As manufacturers and retailers seek to partner with suppliers to ensure
their health and strong performance, P2P is a way to enable better
planning and access to capital for suppliers.
Leslie Hand, IDC
World class supply chains are no longer just execution engines. Todays
best-in-class supply chains drive value through flexibility and speed in
order to respond to customer demand.
- Sonia Syngal , EVP Global Supply Chain, GAP

44 % of survey responders do not have a finance leader


embedded within their supply chain team today

Source: LTM Research; n = 103

75% expect increasing complexity in their supply base


over next 5 years

Source: LTM Research; n = 103

P2P automation 60% plan to achieve this within 5 years


74% of respondents from retail cited a 2-3 year time horizon.

Source: LTM Research; n = 35

Financial supply chain automation 79% rank as High


or Medium, compared with other corporate initiatives.

Source: LTM Research; n = 103

Supply Chain for: Competitive Advantager:

Competitive Advantage
Strategic supplier engagement
boosts competitive advantage

Sources: SCM World, Chief Supply Chain Officer Report, 2014

Lack of financial supply chain automation impacts top 3 areas:


Financial decision making, working capital efficiency, and
hurts financial health of suppliers

Source: LTM Research; n = 102-103

Working capital improvements are challenged by the


lack of a technology platform and supply chain control

Additional Responses from Prospects:

Lack of control due to customer demands

Product complexity (high mix, low volume)

Regional control

Inventory and service level

Discipline of Supply Chain personnel

Source: LTM Research; n = 93

Supply Chain for: Competitive Advantage for:

Competitive Advantage
Supply Chains contribution
to competitive advantage:
Cost reduction
Agility and speed
Increasing revenue

Sources: SCM World, Chief Supply Chain Officer Report, 2014

Example from the field: Cloud-based Financial/Physical


Supply Chain Control Platform

Vendors & Factories

Singapore
Sourcing Office

Retail, Consumers

Unified
ERP
View

POs

Filings

Payments

Customs
Broker

Commercial Invoices

Product Flow

PROFILE
$4.4 Billion apparel retailer
Sold in 55,000 locations in 110
countries
Source from 34 countries
105 Vendors, 400 Factories

PLATFORM CAPABILITIES
Streamlines customs compliance through
increased use of electronic documents
Supports direct sourcing model
Invoice discounting
Purchase to pay
Customs automation

RESULTS & VALUE


Extended value of SAP implementation to
supply chain partners
Established strategic supply chain foundation for
a centralized GSO
Reduced Exceptions by 85%
Improved return on cash with invoice discount
program

Supply Chain: Key Initiatives ply Chain:


Key Initiatives
Visibility and Business
Intelligence are the top
Key SCM Initiatives

Thank You!