The phenomenal evolution oftelecommunications now makes cloud technology accessible everywhere. An apparelexecutive can now see whether they are at the sewing stage of a manufacturingcycle or at that the goods are already in transit and where it is in the world.Since supply chain and logistic analysts of a brand can now track in real timeevery step of a supply chain, informed decisions and forecasts for capacitymanagement and contingency planning have become easier. All these lead to amuch streamlined industry.

 

If there is any sector that hasbeen totally transformed - or is in the process of being transformed - by cloudcomputing, it is logistics and supply chain management. In many ways, the cloudconcept itself was tailor-made for this industry because of its global scopeand involvement of stakeholders.

 

The cloud allows data from manysources to be centrally collected, transformed, and presented in dynamicdashboards. Therefore, by taking recourse to the cloud, supply chain andlogistic analysts can track in real time every step of a supply chain. Thisresults in informed decisions and forecasts for capacity management andcontingency planning. Since cloud platforms for logistics are far more dynamicand responsive compared to earlier supply chain and logistics tracking tools,the cloud has been a heaven-sent gift for the logistics and supply chainindustry.


It's a given that supply chainfinance benefits both buyers and suppliers. But, the mechanism is mosteffective when all three - buyer, supplier and financial institution - areconnected on a single network that manages the complete transaction lifecyclefrom purchase order, through shipment, invoice and settlement of the invoice.That's the shape of things to come.

 

And, of course, this makes lifeeasier for one and all. Heidi Benko, vice president - Product Management at GTNexus, makes this easier to understand. She says, "Capital is essential tothe health of any supply chain. When it dries up, business comes to a halt.Linking all parties together and inserting financial services based on datavisibility or the financial strength of the buyer or, in this case theperformance on the platform makes it easier for funds to be delivered into thetransaction, more frequently and at lower rates."

 

Therefore, connectivity alsobecomes the foundation for collaboration beyond just financing. It opens thedoor to supply planning and raw materials management. It simplifies amendmentprocesses. It leads to work in process (WIP) tracking and factory automation.Continues Benko, "All of these processes - when linked together by anunderlying platform - allow data to become a competitive weapon for betterexecution in the supply chain. Unlike other platforms, finance providers areparty to the transaction, having full visibility to the transaction lifecycleand to supplier performance history. This helps finance providers mitigaterisks, creating the ability to fund greater volumes and at competitive rates.It enables finance providers to offer programmes such as PO Financing and tocreate innovative financing programmes that are not available without acomprehensive supply chain cloud platform and network like GT Nexus."

 

Benko's company, GT Nexus,is the developer and operator of one of the world's largest cloud supply chainplatform of its kind. It is virtually a community of manufacturers, retailers,logistics service providers, carriers, trading partners, and banks working towards improving the pace, ease, and flexibility of doing business globally.

The phenomenal evolution of telecommunications now makes cloud technology accessible everywhere. "An apparel executive can now see whether they are at the sewing stage of a manufacturing cycle or at that the goods are already in transit and where it is in the world. This type of transparency of real time information is the key for correct decision-making as a funding provider to companies as we now know what is happening with the order or invoice that we are funding," points out Robert Lin, president and CEO of Seabury TFX.

 

Benko outlines how such technology can accelerate the pace of data interpretation. She says, "Suppliers work in an automated environment. They can have a dashboard view of orders and incoming payments. They can log in once and view this data across multiple customers on the platform. Buyers automate the PO and payment process. But they also capture all transaction data and performance history. This becomes valuable in instances where supplier funding is delivered based on the performance data of the supplier and buyer instead of credit."

 

Such state-of-the-art technologies probably benefit MSMEs the most. Benko explains why, "Traditional hosted software can be difficult to deploy. Cloud-based solutions, on the other hand, are simple. There's no local installation or implementation. A web browser with a secure connection and security standards such as robust encryption processes provide an easy but secure way for smaller exporters to connect and transact." The process is as simple as that.

 

There are innumerable benefits than can accrue to MSMEs. Businesses get paid faster; they know when and how they will be paid; invoice processes are automated; and purchase orders and amendment processes are automated, and purchase order changes clearly highlighted. Besides, the same purchase order data flows into tools for packing, scanning and shipment-building. As a result, transactions are cleaner or more compliant, resulting in faster approval for payment and greater availability of financing. Moreover, suppliers know exactly what needs to be completed for an order, and when they will be paid.

 

This will be the future that no one can escape from. Says Lin, "Eventually, all supply chains will need to be digitally managed as business is simply moving too fast today for manual paperwork to work effectively. The same is true of funding providers servicing the apparel industry. If funding is not there at the right place at the right time, then that will delay the supply chain." Resistance to change, specifically to new technology in this case, can therefore be an issue. Dastaquir Ismail, vice president-Supplier Solutions at GT Nexus, has this to say about the challenges, "Accepting new technologies is always difficult as vendors are already set with their existing systems. Change is never easy. The key to this is educating suppliers continuously on the market changes and making them aware that they need to be ahead of the game. The best run and most efficient factories are the most automated with new systems and procedures in place."

 

Moreover, there is a need to sensitise the market. Ismail continues, "The word "financing" has changed, and it's all about partnerships. We look deep into customer requirements to determine if it's short-term or long-term funding needs, and then bring in relevant financial partners. We educate our suppliers on modern technology and proper supply chain processes. Our platform visibility features gives a good dash board for smarter decision making."

 

Seabury TFX, a specialist in trade finance, is already working with supply chains that have already invested into digitalising their supply chains. Says Lin, "Our solution is plug-and-play and easily implemented to be available to users of multiple supply chain communities. We provide funding that is competitive, and in most cases more readily available for companies that can demonstrate strong historical and ongoing performance." Unlike other supply chain finance providers, Seabury believes supply chain finance is the providing of cash flow all along the different points in a supply chain and not just after an invoice has been approved by the buyer.