Supply Chain Finance

The 2017 SCF BarometerPwC Survey

www.pwc.com/it

PwC

PwC Global Treasury Survey ’17 - Strategic goals for the CFOs

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“Companies are coming around to the notion that they need a comprehensivebalance sheet strategy […] thinking about the tradeoffs that come with differentbalance sheet configurations and how to prioritize them in light of theirbusinesses and particular value creation strategy”

Source: PwC Global Treasury Survey 2017

Source: ALM Intelligence Competitive Landscape Analysis – Corporate Finance & Treasury Management Consulting (Nov 2016)

PwC

Balance Sheet Management Framework

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Immediate Cash Benefits

Long Term Financial Flexibility

Sustainable Capital Allocation

Long Term Cash Improvements

• Effective banking & cash management

• Enhanced global cash & liquidity visibility

• Accuracy of cash forecasts and reporting

• Improved ability to fund and support operations

• Freed-up cash to pay down debt

• Improved ability to select higher ROI projects

• Improved ability to achieve capital budgets

• Optimal capital structure• Increased enterprise agility

& flexibility• Reduced borrowing costs

Cash & Liquidity

Management

Capital Optimisation

Working Capital Management

Corporate Finance Strategy

PwC

Balance Sheet Management drives Profitability as well as P&L does

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Companies that maintain a strong Balance Sheet efficiently fund their operations andgenerate sustained cash flow growth, are best positioned to face unexpected events andcapitalize on business opportunities.

Goals for the Finance function partnering the Business:

Goals for the Finance function partnering the Supply Chain Higher company

valueLower cost

of debt

Higher returnsBetter credit

standing

PwC

The PwC SCF Barometer - Introduction

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The Supply Chain Finance Barometer

Goal

Questions

Respondents

Goal of the surveyUnderstand the current position and awareness of SCF and implementation drivers & critical factors

Respondents’ profiles• +60 respondents, global view • Variety of industries & size• Diverse range of functions• Varying levels of SCF maturity

Key questions• Key SCF implementation drivers?• SCF program scope? SCF technology used?• Total spend covered by the SCF program?• Supplier onboarding?• SCF success rate?

PwC

Reasons for implementing

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Principal reasons for implementing an SCF program

Working Capitaloptimization

Supplier liquidity needs

Supplier relationship improvement

Other• Additional revenues, cost reductions• Utilise cash surplus• Optimize corporate finance (incl.

Asset financing)

Supply chain stability improvement

SCF in place Interest in SCF

46%

18%

18%

12%

6%

45%

14%

14%

14%

12%

PwC

SCF adoption varies between industriesTop 3 SCF industries

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PwC

Awareness of SCF Solution and Technology platforms

8

PwC

Where SCF in place - Supplier selection criteria

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Strategic relationship and spend amounts are

key drivers for suppliers’ selection

PwC

Implementation time of SCF Solution and Initiator

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SCF initiator - 2017

period between signing the contract with the SCF provider till processing the first invoice on the platform

Respondents used external support for all phases of a SCF implementation, including:

• business case assessment• legal/contract review• IT implementation• supplier on boarding• project management

PwC

Critical success factors and bottlenecks

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PwC

When SCF not effective? What our experience has shown

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• All or the majority of the spending is with Suppliers who have a credit standing better than the Buyer

• Buyer’s Finance and Purchasing Departments do not share common objectives and have divergent interests/incentives

• Price setting is ownership of the Purchasing Dept. and a “no-fly zone” for the Finance Dept. (for Dynamic Discounting)

• Cash is not an issue for the Suppliers, so reducing the payment terms is not a priority

• Little effort dedicated to the Suppliers’ onboarding initiatives

PwC

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

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PwC

Download a copy of our PwC SCF Barometer2017 ….

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…and reserve a copy of our coming PwC SCFBarometer 2018 at our Desk!

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