GT Nexus 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. Heidi Benko, Vice-President - Product Management at GT Nexus talks about supply chain intricacies in an interview with Fibre2Fashion.com
How can supply chain finance be integrated with both buyers and suppliers?
Supply chain finance can benefit both buyers and suppliers. It is most effective when buyer, supplier and financial institution are connected on a single network that manages the complete transaction lifecycle from purchase order, through shipment, invoice and settlement of the invoice. This level of connectivity enables not only process automation, but also allows for strategic programmes such as early payment programmes, PO and post-shipment financing that help suppliers access to capital when needed throughout the transaction lifecycle and faster.
More importantly, suppliers access capital at better rates than what's available locally. Suppliers are eased of the capital burdens that frequently slow down apparel manufacturers. For buyers, they benefit from a healthier supply chain with less risk of delays. Lower capital costs also impact cost of goods sold, helping improve margins.
How does this linkage work to benefit the entire community?
Capital is essential to the health of any supply chain. When it dries up, business comes to a halt. Linking all parties together and inserting financial services based on data visibility or the financial strength of the buyer or, in this case the performance on the platform (HB- with Seabury it is about performance not the buyer's financial strength) makes it easier for funds to be delivered into the transaction, more frequently and at lower rates. Connectivity also becomes the foundation for collaboration beyond just financing. It opens the door to supply planning and raw materials management. It simplifies amendment processes. It leads to work in process (WIP) tracking and factory automation. All of these processes - when linked together by an underlying platform - allow data to become a competitive weapon for better execution in the supply chain. Unlike other platforms, finance providers are party to the transaction, having full visibility to the transaction lifecycle and to supplier performance history. This helps finance providers help mitigate risks, creating the ability to fund greater volumes and at competitive rates. It enables finance providers to offer programmes such as PO Financing and to create innovative financing programs that not available without a comprehensive supply chain cloud platform and network like GT Nexus.
How easy or difficult will it be for MSME's to implement this technology?
Traditional hosted software can be difficult to deploy. Cloud-based solutions such as GT Nexus 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.
What are the immediate benefits that an MSME can accrue by implementing this technology?
The immediate benefits are:
1. Businesses get paid faster - in just a few days;
2. They know when and how they will be paid;
3. Purchase orders and amendment processes are automated, purchase order changes clearly highlighted;
4. Invoice processes are automated;
5. Data is reused (versus manually rekeyed) to create other documents and execute processes: POs are used to create packing list/ASNs, data form packing lists + POs are used to create invoices and so on;
6. The same purchase order data flows into tools for packing, scanning and shipment-building;
7. Transactions are cleaner/ more compliant resulting in faster approval for payment and greater availability of financing;
8. Suppliers know exactly what needs to be completed for an order, and when they will be paid.
What is the kind of hand-holding you provide to allow people to understand and implement it? And what are the legacy practices that people can easily abandon once they begin work through this technology?
Training is conducted for users to get up and running. Users have a client manager that they can contact. Once they are up and running, a support line is available to customers to call any time of the day for support or questions regarding the system. There is always someone available to assist a user. Old processes of manually handling orders, amendments and invoices are eliminated. Costly tools such as factoring are eliminated. The need for more costly financing options is reduced.
Please elaborate on how this technology can also accelerate the pace of data interpretation?
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.
Published on: 04/09/2015
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.