August 24, 2023
Highlights and Key Takeaways from the AAFA webinar, sponsored by Infor Nexus™: How Sourcing and Finance Improve Supply Chain Health
In the ever-evolving world of business, one truth remains constant: change is inevitable. This maxim holds particularly true in supply chain management, where adaptability is crucial for success.
In a recent webinar organized by the American Apparel and Footwear Association (AAFA), industry experts from DBS Bank and Infor Nexus gathered to discuss how the inseparable triad of sourcing, supply chain management, and finance can collaboratively improve supply chain performance, support environmental, social, and governance (ESG) goals, and strengthen relationships between companies and their suppliers. The speakers, Jeff Rohe, VP Product Management, and Gary Schneider, VP Financial Services, from Infor Nexus and Jenny Young, SVP Global Transactions, from DBS Bank provided valuable insights into these critical aspects of supply chain health.
In this article, we'll explore the key takeaways from the webinar, how sourcing and finance improve supply chain health, and delve into the strategies that organizations can adopt to enhance their supply chain operations.
Four Pillars of Supply Chain Health:
Jeff, Gary and Jenny outlined four key pillars for assessing and improving supply chain health: Performance, Resiliency, ESG, and Relationships. These pillars serve as a framework for evaluating and optimizing different dimensions of supply chain management.
Ensuring that products reach their destinations on time, at the right place, and at the right price is fundamental for supply chain success. This requires efficient processes and accurate documentation.
Building a resilient supply chain is crucial for adapting to unforeseen disruptions, such as pandemics, natural disasters, or geopolitical events. Digital connectivity and real-time information sharing play pivotal roles in achieving this.
ESG (Environmental, Social, Governance):
Many companies are now focused on reducing their environmental impact and ensuring ethical practices throughout their supply chains. Compliance with ESG standards is increasingly important for both consumers and regulators.
Strong and transparent relationships between buyers and suppliers are essential. Being a customer of choice for suppliers can lead to preferential treatment and a more reliable supply chain.
Collaboration is the Bedrock of Success
The webinar underscored the increasing significance of collaboration between procurement (sourcing) and finance teams in fortifying a resilient supply chain. By initiating a dialogue between these traditionally separate functions, essential communication gaps can be bridged. This connection enables treasury teams to gain profound insights into procurement intricacies, and vice versa, fostering improved communication and mutual support.
Moreover, this collaboration serves as the cornerstone for discovering mutually beneficial solutions. By comprehending each other's perspectives and needs, these teams can harmoniously work together to construct a more resilient and efficient supply chain. Ultimately, the goal is to cultivate a thriving ecosystem where both buyers and suppliers thrive.
Sourcing and finance departments should collaborate closely to improve supply chain health. Here's how they can work together effectively:
- When expanding operations into new countries or regions, involve finance early to address payment terms, financing availability, and regulatory requirements.
- Collaborate with finance to secure financing options for suppliers, making it easier for them to fulfil orders and maintain financial stability.
- Seek technology solutions that cover a broad spectrum of supply chain and financial operations, creating a unified platform for suppliers and streamlining processes.
Finance’s Role in ESG Goals
Part of the discussion focused on supply chain finance, especially within the framework of Environmental, Social, and Governance (ESG) initiatives, and how this offers a fresh perspective on supplier relationships. Implementing tiered supplier financing based on ESG performance encourages suppliers to align with broader sustainability objectives. This approach incentivizes suppliers to invest in improved equipment and practices, serving both their interests and those of their customers.
Finance departments can play a pivotal role in helping organizations achieve their ESG goals. Here's how:
- Access to financing can support sustainability initiatives, such as upgrading infrastructure or implementing eco-friendly practices.
- By measuring and reporting ESG metrics, organizations can attract more investors and consumers who align with their values.
- Consider creating consortiums among common suppliers to collectively work toward achieving scope 3 ESG goals.
The Power of Technology
The modernization of supply chain and finance operations hinges on technology. Leveraging technology solutions like Infor Nexus enhances operations by providing a centralized hub for suppliers and buyers to streamline processes, reduce errors, and ensure real-time visibility across the supply chain. Furthermore, by connecting all stakeholders, platforms like Infor Nexus engender greater efficiency and resilience and support ESG initiatives within the supply chain ecosystem.
A connected and unified supply chain, supported by platforms like Infor Nexus, can help with these competitive advantages:
- Multi-enterprise supply chain platforms optimize processes, heighten visibility, and enhance collaboration among supply chain stakeholders.
- The adoption of a single version of the truth ensures that every party involved in the supply chain operates with identical data, facilitating sound decision making.
- The presence of a single source for precise data eases customs clearance processes, ensuring all requisite documentation is in order which is especially valuable for complex, global supply chains.
The Wrap Up
In conclusion, providing financing to suppliers extends beyond mere payment term extensions; supplier financing arrangements should be designed to benefit both buyers and suppliers, fostering a harmonious and advantageous partnership. This AAFA webinar shed light on the critical elements of supply chain health and highlighted the importance of collaboration between sourcing, supply chain management, and finance departments. By working together and leveraging technology solutions, organizations can enhance their supply chain performance, increase resiliency, meet ESG goals, and foster stronger relationships with their suppliers. In a rapidly changing global marketplace, these strategies are essential for sustainable growth.
About Infor Nexus
Infor Nexus is the world's leading global supply chain platform. Infor Nexus connects a network of over 85,000 brands, retailers, manufacturers, suppliers, logistics providers and banks on single-instance network platform to seamlessly orchestrate global supply chain processes from source through to delivery and payment. Companies streamline their operations, eliminating inefficiencies and waste while gaining data-driven insights and optimize the flow of capital for improved agility, resilience, and sustainability.
Interested in watching the full webinar or learning more about Infor Nexus? Click here to view the full webinar on-demand and fill out the form below to be connected to an Infor Nexus specialist.
Author: James Illidge, Product Management & Strategy, Infor Nexus™
James Illidge is a Product and Strategy Manager who has been with Infor Nexus since 2021.