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Keep clients lean, not mean

Unlocking value
By Kareem Chouli, Head of Sales, Americas

Commercial banking partners play a vital role in keeping clients ahead of the competition in a real-time, demand-led marketplace

Digitisation puts today’s companies under a great deal of pressure. While the online universe has opened up a world of commercial opportunity, it also puts strain on operations that are still run along largely analog lines.

A demand-led economy means companies have to respond to dramatic spikes as well as troughs; some of the factors influencing that demand can be outside companies’ control. Influenced by social media trends or a disruptor entering the marketplace, these spikes and troughs also have to be addressed in near to real time.

Keeping to old-fashioned forecasting and supply chain management leaves organisations frequently facing interruptions in supply or storing excess inventory. Neither is ideal.

Lean supply chain
The best practice response to a demand-led market is to adopt a lean supply chain. A solid practice in theory, many organisations find it difficult to implement.

Lean supply chains mean managing the whole process of supply with minimal wastage, whether that’s in terms of cost, time or product. It means streamlining procurement and getting rid of multiple steps and duplications that often occur in a more traditionally organised supply chain.

It means staying on top of production, whether that’s manufacturing physical product or delivering a service, making sure it is in top form to respond to changes in demand. And finally it means storing as little resource or finished product as possible and delivering it in the most efficient way possible.

To achieve any of this, companies need the support of their suppliers. They need access to the most favourable terms that will allow them to dial their own supplies up or down when required. Organisations need to find financing for increased production quickly and without diminishing returns through punitive rates.

Banks are essential partners
Commercial banks are an essential partner to businesses in the lean supply chain. They need to be on hand to provide the advice and financial mechanisms that allow companies to manage their expenditure and facilitate lean behaviour across the business.

Companies that shift payments from cash to card to defer expenses and keep working capital healthy will have an advantage over those who can’t access finance quickly. Organisation-wide visibility of spend, both from large-scale logistics to daily discretionary expenses allows for quick decision-making. It’s as valuable to know when responsiveness to demand may not be in the best interests of the business; when acquiring the customer at all costs becomes a strategy of diminishing returns.

From adaptive credit to simple financial dashboarding, banking partners that can deploy tools such as commercial cards and expense management systems will give their partners the edge in a competitive and consumer demand-driven marketplace.