Matthew Seiler from the World Economic Forum focused on sustainable value chains. His speech gave us a sneak peek into the work of the World Economic Forum. He shared insights on the sustainability angle in relation to SCF, from decarbonization to social issues. The Forum is partnering up with the SCF Community to bring knowledge and know-how about SCF to its initiatives. During the event, Matthew started a discussion with participants about their experiences with sustainable SCF and the barriers to implementing or scaling those programs.
Jeffrey Thompson’s presentation shared Merck’s procurement-led SCF initiative. He discussed the typical discussion points between procurement and finance in and outside SCF and the consequences of ‘win-lose mandates’. His parallel between zero-calorie sweeteners and artificial savings is surely stuck in all of our heads. As he pointed out, Merck’s SCF objective is not improving working capital or extending payment terms and creating a win-win situation for a diverse supply base. A truly supply chain management-oriented program.
Joshua Pratt talked about the sustainability-focused strategy of the United States Steel Corporation. During the presentation, he shared how their SCF program started in the second half of 2020 with the goal of reducing the weighted average days payable among raw material suppliers. They managed to provide lower interest rates than many suppliers’ borrowing rates, which made it a real win-win situation and helped them achieve a 100% buy-in from the suppliers of both of their main commodities.
The last business case, with the most mature SCF program, was presented by Douglas Schoch from Siemens. He explained how Siemens defined the goals of its program, and how it chose supportive partners. Doug also walked us through their supplier enrolment milestones. The participants gained insights into how the program developed and improved since the start. For instance, how supplier eligibility over the years increased as the annual spend decreased from half a million dollars to only twenty-thousand dollars. This boosted participation in the program, but also diversity and financial inclusiveness across the entire supply chain of Siemens.
Finally, Rudolf Leuschner (Rutgers Business School) and Dale Rogers (Arizona State University) from our US Board concluded the presentations with an insightful (and amusing) talk on the future of SCF: from using your supply chain to finance your working capital, to use your working capital to finance your supply chain.
An exciting event that kicks off our activities in the US and the rest of the world. We are already planning our event for 2023 in the US, Europe, and Asia. Did you miss this event, and would like to know more? Stay in touch and register for our newsletter or if you are able to travel to The Netherlands, on the 2nd of November, we will organize a similar event on the financial, physical, and data flows. You can register here