Effective inventory management is the lifeblood of your supply chain. However, with shifting carrier rates and material costs, your inefficient inventory may be eating a hole in your pocket.
Luckily there are solutions to this — using supply chain finance strategies. You can arrange financing to pay off your suppliers before you sell your goods, or you can outsource ownership of your materials to a third party.
Either way, suppliers gain quicker access to capital, while you get more time to pay and more leverage for procurement and transportation. Both parties can use the cash flow for other projects to keep their respective operations running smoothly.
Supply chain finance can be a positive initiative for all parties involved. It wasn't always the norm but, with more industries globalizing and creating complex, multi-party supply chains, it's become more common.
Leverage Supply Chain Finance To Reduce These Costs
Complex supply chains are our specialty. We understand that there can be many steps between your customer making a purchase and their shipment getting delivered. We have leveraged supply chain finance solutions to reduce costs and build strong relationships between buyers and suppliers for the ultimate benefit of each link in the supply chain.
With the right solutions, we’ve observed the greatest cost reductions in four key areas:
- Transportation
- Warehousing inventory
- The balance sheet
- Strategic sourcing
Transportation
So often, transportation choices are driven by the need to wait as long as possible to buy goods and then sell them as quickly as possible afterward. Finance strategies enable you to make smarter, more efficient decisions, including freight consolidations, transportation mode shifts or elimination of segments that can further improve your workflow.
Warehousing Inventory
The money you have tied up in goods sitting on a shelf often is one of your largest capital requirements. There's a lot of waste, even in good organizations, due to buffer inventory, seasonal spikes and demand volatility. The best system would allow you to have your cake and eat it, too. And, finance solutions can help you keep that extra inventory available at a lower cost.
The Balance Sheet
Public company investors measure how much productivity a company achieves with the money they're given. The more you have tied up in warehouse goods, the less efficient you look to Wall Street. Supply chain financing and outsourced inventory ownership can dramatically improve your balance sheet's return on invested capital (ROIC).
Strategic Sourcing
Any Costco or Sam's Club shopper can tell you: It's a lot easier to get great prices on goods when you're willing to buy in large quantities. But, again, that takes capital. This is why supply chain finance solutions can help you procure in larger quantities without bloating your costs. Having more materials continuously on hand also ensures uninterrupted operations in unstable supply chain conditions.
An End to End Solution
Financial strategies can help your operation grow in every step of the business, and doing so with Morgan is an added bonus. Our intuitive software platform, ChronosCloud, is the only enterprise supply chain solution that encompasses all processes from pickup to payment. You'll gain visibility from end to end while integrating that data with your finance team's processes.
Reach out to our team today to discover how supply chain financing can elevate your shipping operation.
