The high volatility in the global business environment, especially post Covid-19 pandemic, necessitates more agile and resilient supply chains. For timely and effective decision-making, supply chain leaders require greater supply chain visibility and controls. The inability to apply data in real-time is a significant issue in supply chain finance nowadays. Data is abundant, and every process generates more of it; however, all data from the past is not always the best source of action today. Analytics applications are all about how a company responds to information and avoids risk. Hence, they are an obvious choice for businesses that need to restructure their supply chain finance goals.
Supply chain dashboards have several benefits, such as:
-Improves data visibility by delivering intuitive visuals that compare current performance to historical trends and targets.
– Allows supply chain stakeholders to take targeted and informed action.
– Enterprises can make better, more timely decisions to drive value to customers, shareholders, and other stakeholders across the supply chain.
– It can aid in determining the root cause of bottlenecks that reduce company profits, reduce competitiveness, and increase customer churn.
-It helps measure accomplishments and KPIs, which can encourage you to set more ambitious new goals.
A customized dashboard is an ideal playground for data exploration because it allows a company to visualize data of any type based on their needs, issues, and control points. A portfolio of interactive charts, combined with a company's streamlined data collection process, cuts through the clutter, freeing up time for their team to focus on advanced analysis and action because they will be working with real-time data. Businesses can make better and faster business decisions with real-time visibility. The data can help enterprises identify patterns and gain valuable insights into how their delivery operations work and ways to improve their delivery service.
End-to-end visibility can benefit the seller and focuses on factoring and invoice, which addresses corporate sellers' financing needs by anticipating liquidity related to commercial transactions. Buyer's side finance, on the other hand, is typically targeted at large buyers and their suppliers. It addresses suppliers' large buyers' financing needs, such as reverse factoring, which allows suppliers to access third-party financing for buyer-approved invoices, and dynamic discounting, which will enable buyers to pay suppliers early in exchange for invoice discounts. Through dashboards, businesses can keep track of these crucial things and focus on the financing needs of buyers and suppliers, which can enable smooth operations.
Better delivery predictability and insights from data analytics enable more efficient, cost-effective operations and more informed decision-making. Analytics can help companies create supply chain finance goals that align with success and help them measure their health to ensure processes align with those goals.
Some financial instruments in Trade Finance
- Bank-guaranteed trade finance (i.e., documentary trade)
– Letters of credit
– Guarantees
– Collections
- Not-bank-guaranteed trade finance
– Open Account
Below are a few of the financial instruments used in trade finance:
- Lending lines of credit can be issued by banks to help both importers and exporters.
- Letters of credit reduce the risk associated with global trade since the buyer's bank guarantees payment to the seller for the goods shipped. However, the buyer is also protected since payment will not be made unless the terms in the LC are met by the seller. Both parties have to honor the agreement for the transaction to go through.
- Factoring is when companies are paid based on a percentage of their accounts receivables.
- Export credit or working capital can be supplied to exporters.
- Insurance can be used for shipping and the delivery of goods and can also protect the exporter from nonpayment by the buyer.
