1. Introduction Supply Chain Finance (SCF) Lecture # 13
Jan H Jansen

2. Round # 7 The Cool Connection

3. Lectures period 2 or 4 Lecture Topic Preparation 8
Introduction to value
Cool connection round 1
Assignment 6 9
CAPM & EVA
Cool connection round 2
Assignment 7 10
SCF instruments
Cool connection round 3
Assignment 8
EBA SCF 11
Blockchain in SCM & SCF
Cool connection round 4
Case Heineken 12
Cool connection round 5
Case Unilever 13
Cool connection round 6
Case Philips 14
Cool connection round 7
Test exam
Exam case

4. Round # 8 The Cool Connection

5. Source:

6. Assignment 7

7. Lecture 13

8. Case study Philips

9. Source:https://www. google. com/finance

10. Source: Philips annual report 2014

11. Capital
Source: Philips annual report 2014

17. At the height of the economic crisis, it was critical for Philips’ suppliers to have access to funding to ensure the continuity of supplies to the company, thereby reducing Philips’ risk exposure. The company therefore launched a supplier financing programme, which presented an opportunity for Philips to address its working capital needs at the same time
Source:

18. Citi’s supply chain solution, which is enabled through a web-based application, allows Philips to upload approved invoices for their suppliers in multiple currencies through a host-to-host connection. The suppliers can elect to discount their receivables, giving Philips’ suppliers automated or optional early payment flexibility. No Citi accounts needed to be opened by suppliers under the programme.
Source:

19. Liquidity at the click of a button.
Suppliers are able to receive financing for their receivables the same, or at latest, the next business day from when Philips uploads payments into the platform.
Asia linkage.
The existing European technical solution was enhanced by linking with the local Asia SCF product processor to reach Philips’ global suppliers. The Asian suppliers benefited from a local feel to the solution as they only engaged with the local Citi branch. Philips on the other hand achieved a single window interface for all their purchases.
Supplier selection.
Citi and Philips worked together to select suppliers that would create maximum value and cash flow benefits for Philips and its suppliers. This resulted in gaining acceptance from some of their global suppliers, which took the facility utilisation to 100% within three months of launching the programme.
Standardisation of payments interface.
Although the supplier financing programme introduces a new process operationally, Philips and Citi worked closely together to integrate the SCF process into Philips treasury’s existing way of working, thereby keeping Philips’ central payment factory intact and yet creating a fully automated process for delivering, approving and paying the invoices.
Source:

20. Strengthen relationships with suppliers
Benefits at a Glance:
Strengthen relationships with suppliers
Extend Days Payable Outstanding (DPO)
Reduce the Cost of Goods Sold (COGS)
Streamline administrative processes
Keep supply chains moving
Source:
Video CITI Supply Chain Finance Platform

21. Source:

22. Source: www.theiirc.org

23. Six Capitals (Gleeson-White)
Financial capital
Equity
Debt / Loans
Manufactured capital
Physical goods
Services
Intellectual capital
Knowledge
Patents, copyright, etc
Human capital
Competencies
Social & relationship capital
Instituitions
Stakeholders & networks
Nature capital
Renewable & non-renewable environmental resources

24. Source: 2016 Annual Report Philips