Ronald Molenaar, manager business controlling at Dutch supermarket chain Jumbo and Vilhelm Otterheim, senior sourcing manager with Swedish retailer ICA Gruppen told SCF Europe forum delegates how they used supply chain finance to ensure that their key suppliers can afford to stay with them as they develop.
Both acknowledged the vital importance of supply chains growing with their companies. Jumbo’s passion for modernising and evolving was conveyed by Molenaar, who used Jumbo’s history of fast growth over the past twenty years, to discuss how modern corporations need to make a commitment to a healthy supply chain in order to ensure positive outcomes for suppliers and growing enterprises.
Otterheim echoed this and spoke about ICA’s optimisation of the value chain and use of SCF as a tool for funding, stating that: “we never force a supplier to us, but we convince then that we can face the future together. The most important thing for us is supplier satisfaction.”
Growth rate, supporting SME suppliers, CSR, legislation and technology were identified by Molenaar as the five key reasons that led to them starting a programme to develop a healthy supply chain. He outlined the commitments that his firm had made, highlighting the fact that they offer initiatives for early payments.
The changes made by Jumbo have resulted in a significant reduction in average payment dates, standing at 30-33 days. Molenaar said: “Suppliers really like the flexibility, the liquidity and the freedom that the programme gives.”
Both Molenaar and Otterheim warned that a lack of access to working capital can be concerning as it can inhibit growth and reduce companies’ ability to ‘keep up’. Molenaar highlighted the need to move further from ‘supplier chain’ towards ‘supply chain finance’ and discussed how modern organisations can utilise SCF in order to drive growth and innovation in the supply chain.
Digitisation, convenience, and sustainability were identified as future challenges by Otterheim, but both remained optimistic for the future, reflecting on how commitment to reform, growth and strengthening the supply chain will lead to win/win situations for both businesses and suppliers.