Making the Case for Mavericks

It was an honor to speak at the Global Expansion Summit in London, but to be honest, I was just as excited to be an attendee. With attendees from 700+ companies representing 60+ countries, I was eager to absorb a healthy dose of new and varied business perspectives.

It’s an interesting time to be conducting business in a global climate. Supply chains are more global than ever, but the political and trade policy climate in the U.S. and Europe could have long-tail implications. Disruption is happening across every industry and it’s precipitating significant, meaningful changes in how companies operate, compete, survive and thrive. Your supply chain may already be feeling the impact in the form of its own disruptions and changes.

In a recent report from The Economist Intelligence Unit, most companies are confident they will be able to deal with the challenges and disruptions in their supply chain over the next 12 months. But, in order to do that, they are very sensitive about lowering costs. More than half of the 500+ executives surveyed cited reducing costs as a top priority. At the same time, nearly a third of respondents identified the optimization of working capital and quicker receivable collections as areas in great need of innovation.

The state of global business underscores a critical need for improved cash flow. The ability for companies to innovate, compete and embrace disruption(and survive it!) – also known as resiliency – depends largely on their ability to optimize working capital.

For finance and supply chain executives, this requires a maverick mindset and a drive to explore new approaches to cash flow optimization. How do you find $1B or more to fund infrastructure improvements to meet demand? Or an acquisition to help you tap into new markets? Or R&D that will produce innovation?

Traditionally, companies have had four options to access the cash needed to fund large-scale business improvements:

  1.  Deep, deep cuts.
  2.  New debt.
  3.  Equity.
  4.  Selling of assets.

The problem with each of these strategies is they have negative implications on the business – either operationally or financially. Despite finance executives’ confidence in their ability to survive supply chain disruptions and challenges over the next 12 months, many companies can’t afford a material hit to operations or their balance sheets.

One of the things I spoke about at the Global Expansion Summit was the role that supply chain finance plays in this quest. I discussed how PrimeRevenue is helping several companies unlock $1B or more of working capital that was previously trapped in their supply chains. And we’re doing it in a way that helps rather than harms suppliers.

If you were in London last week, I hope you attended the Global Expansion Summit and learned how companies like PrimeRevenue are leading the charge in helping businesses successfully tackle the challenges of global trade.

If you didn’t attend, I’d still like to hear from you. What concerns and challenges do you have related to cash flow in the current business climate? How do you expect these to change over the next 12 months? Finally, what are you doing today to address them?