Taulia’s Supply Chain Finance Plus in Action at Milliken – Taulia Connect Dispatch David Gustin - March 1, 2016 2:37 AM | Categories: Supply Chain Finance | Tags: Greensill Capital, Paypal, Taulia Connect Milliken is a 150 year old privately held textile company and as I learned, the last of the textile companies in the USA. You would think textile companies are boring, but not Milliken. They make some pretty cool stuff – like protective textiles that prevent injuries from explosions or carpet tiles where you can inkjet print every fiber to make an image. With operations throughout the Americas, Europe and Asia, Milliken, when it came time to implement a program to free up working capital, looked at the matrix below to figure out what works best for them. They first had a slew of banks march through with similar supply chain finance pitch, providing the same benchmark analysis – basically Milliken quick paid their vendors compared with Anheuser Busch, Hertz and others who were at 45 days or higher. Figure: Evaluation Matrix for various Payable Working Capital Measures Discount DPO Simplicity Supplier Cost Terms Extension No Yes Easy to send letter but pushback can come No Discount Program Yes Not good for public company somewhat High APRs Vcard and Pcard Yes Yes Not simple at all Suppliers hate it and typically fight interchange costs Big Banks Supply Chain Finance Accounting issues Yes, because tied to term extension Complicated onboarding True sale legal opinion SCF+ from Taulia Receive a fee for providing supplier data Does not impact Yes Negligible As Tom Mathis, head of procurement at of Milliken, commented that CFOs love discounts until it gets to quarter end and its time to report on DPO. So when Milliken established new payment terms of Net 60, they also went out and implemented 1,300 suppliers into SCF+ from Taulia with Greensill Capital as the funding partner. They use multiple APR pools and believe the program has been very effective and Tom commented they like the flexibility in the program as company goals change – In his word, “I can flip a switch whether I want to self fund or use 3rd party capital.” At Taulia Connect, Tom also acknowledged that some parties will never log into their portal but would take Pcard. Paypal (another speaker) bore this out as well, saying essentially forget about going after Transportation and Utility vendors as they will not adopt certain programs (e.g., discounting, cards, etc.) This last point is critical to bear in mind – with more options these days, a flexible program can be designed that includes multiple options and multiple sources of funding. And done right, it can maximize supplier participation. Don’t forget to sign up for TFMs weekly digest delivered to your inbox every Monday here Follow me on Twitter @TFMatters Related Articles Taulia’s Crossroads: Both Directions Lead to Good Places (We Think!)… Supplier Networks and the Source-to-Pay Process: Taulia Connect Dispatch The Funniest CPO in the Business is Dead Serious About… Taulia Connect and an update on Dynamic Discounting First Voice Pat Snippley: 08.04.2016 at 5:19 pm Interesting…I had thought the SCF+ offering was essentially a flexible hybrid of DD and reverse-factoring, but it seems different to this. Can you explain the “Receive a fee for providing supplier data”…nature of the fee, the quantum, and who receives it in such a program? Reply Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of new posts by email.