Overheard on the Quad: What We Learned When Supply Chain Finance Went to University

Michigan State University SNEHIT/Adobe Stock

Even with the increasing shift in focus to the importance of return on investment for a college education, many young men and women these days pursue an undergraduate degree to answer foundational questions about themselves. It’s no surprise, accordingly, that so many university mottos include the word “veritas,” a nod to students and professors alike searching for “truth.”

Likewise, as our sister site Trade Financing Matters explains, supply chain finance recently went back to school, under the tutelage of Professor David Wuttke of the EBS Business School. His team at EBS, in collaboration with Orbian, has been seeking the truth about trade finance, including a few foundational questions of their own.

How are firms using supply chain finance today? What are purchasing managers true motives for adopting supply chain finance? How do companies really benefit from supply chain finance programs? What adoption challenges are they facing?

The answers to these questions, along with new insights both Wuttke and Orbian had not even considered when they began their collaboration three years ago, will be explored in a webinar Thursday June 22, at 10 a.m. CDT. Titled Supply Chain Finance Goes to College: Groundbreaking Research Results from the EBS Business School, the event will explore highlights of Wuttke’s research on observed patterns of behaviors in supply chain finance, and Thomas Dunn, CEO of Orbian, and David Gustin, editor of Trade Financing Matters, will describe some of the SCF product and service innovations that have developed directly from this research work.

Here’s a preview of the study results, as explained by Wuttke in a guest post over on TFM:

“Briefly touching on this topic, we will share our insights characterizing successful on-boarding approaches. Finally, we come to the latest highlight of our research endeavor, where we study a particular type of suppliers: those who use supply chain finance manually; that is, for each invoice they decide deliberately whether and when to use supply chain finance, rather than using an automated as-early-as-possible approach.

“With about 25% of revenues, manual suppliers are not only a substantial part of all supply chain finance users, but also a quite instructive one. You will likely agree that suppliers using supply chain finance automatically expect substantial benefits, be it in terms of earlier cash or lower cost of finance. That is, after all, why they agree to adopt supply chain finance. But what benefits do manual suppliers expect? If it was lower cost of finance, why do they not use it automatically? Analyzing 80,000 transactions we will provide answers in our webinar on June 22.”

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