Supply Chain Finance in Growing Demand
Hawser, Anita, Global Finance
Best Supply Chain Finance Providers 2009
The credit crunch has demonstrated which banks are truly committed to developing supply chain finance solutions.
Few market segments within financial services have emerged unscathed from the recent credit crisis, and supply chain financing is no exception. Twelve to 18 months ago banks were eager to talk about their investments Ln technology that enabled them to provide early payment to suppliers based on approved payables from the buyer. Since the credit crisis, however, a number of banks have gone quiet on supply chain as they no longer have the risk appetite or the capital to invest in solutions. The number of banks bidding for supply chain financing deals is estimated to have gone from double to single figures.
However, now more than ever, companies - particularly small and medium-size enterprises (SMJEs) or those that are unable to obtain affordable financing from traditional channels - are in need of supply chain financing. The winners of the Global Finance Best Supply Chain Finance Providers awards are those organizations that stand out as remaining committed to the business and to providing ever more effective and useful solutions for cheir clients.
Supply chain financing is gradually evolving as the products on offer expand from covering payables and receivables to encompass other parts of the supplychain, such as inventory. However, supply chain financing is not just about selling a product. In order to understand the financing needs of both buyers and suppliers, technology is important in terms of gaining greater visibility across the entire order-to-pay process. Some of the key innovations in this space are coming from third parties that are leveraging the latest in webbased technologies to provide buyers and suppliers with a wider range of innovative financing options. While the majority of banks are still focused on providing post-shipment financing, pre -shipment and inventory financing is an area that requires much greater focus, particularly in the current economic climate.
Best Global Supply Chain Finance Bank
Ir has been a tumultuous year for most global cash management banks. While affected by the crisis, HSBC still has a relatively strong balance sheet and appears to remain committed to the supply chain financing business. Globally its trade and supply chain finance offerings cover just over 6lt countries and territories, and it claims to have achieved strong supplier uptake in key markets, particularly in Asia-Pacific and, to some extent, the Middle East. It provides an array of electronic platforms tor automating and matching trade documentation including letters of credit, purchase orders and invoices. It has the risk appetite to encompass a broad range of supply chain and trade finance solutions including pre-shipment financing.
Best Global Supply Chain Finance Provider (Non-Bank}
Last year's winner retains its crown this year, and as one of the longest-running providers in die non-bank space it remains committed to the business while others that entered the space more recendy have fallen by the wayside due to financial problems of their own. Orbian has provided electronic payables services since the late 1990s. Ic commenced operations as a joint venture between enterprise application software provider SAP and Citi but was later spun out as a separate company. In 2008 Orbian saw its transaction volume increase by just over 20% and supplier funding transactions increase by 1 5% to $4 billion. Orbian gained more than 400 new clients last year, bringing the total number of clients to 2,322. It has more than 30 active buyer programs and more than 2,280 suppliers that are using its platform to actively discount invoices. Orbian operates in 44 countries.
Best Supplier Support & Enrollment
Ariba continues to boast the largest supplier network, with more than 180,000 "e-enabled" suppliers across 1 1 5 countries on its supplier network. …