1. Introduction Supply Chain Finance (SCF) Lecture # 12
Jan H Jansen

2. Round # 5 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. Levels of SCF instruments
Strategic
Take over
Joint venture
Minority interest
Tactical
Equipment financing
Pay on production
Supply risk sharing
Currency risk sharing
Operational
Working capital
Reverse factoring
Dynamic discounting
Inventory financing
Purchase order financing
Source: SCF, its practical relevance and strategic value, Boer de, R. et al, SCF Community, 2015 (adapted by the author)

5. Recent contribution in SCF An exploratory study into supply chain finance: The relevance of supplier segmentation Steeman, M.A. et al., 2015, Paper Vervoerslogistieke Werkdagen, University Press (Zelzate)

6. Supply chain finance instruments
Equity / Joint venture / Minority stake
Reversed factoring
Long-term loans
Vendor managed inventory (VMI)
Buyer manager inventory / Tolling / Natural hedging
Dynamic discounting
Contractual risk / profit sharing

7. Research outcome Strategic Operational Equity Dynamic discounting
Long-term loans
Vendor managed inventory (VMI)
Contractual profit/risk sharing
Reversed factoring
Advance payments

8. Blockchain in Logistics
Recap
Lecture 11
Blockchain in Logistics

9. Blockchain
Financial
Cypto currencies
Bitcoin
Ethereum
Altcoins
Non-financial
Energy
Logsitics data
Etc.

12. Source: http://www.blockchain-lab.org/#publications

14. About Maersk
A.P. Moller - Maersk is an integrated container logistics company working to connect and simplify its customers’ supply chains. As the global leader in shipping services, the company operates in 130 countries and employs roughly 76,000 people. For more information about Maersk, visit maersk.com or follow us on Twitter
About IBM
IBM is the leader in open-source blockchain solutions built for the enterprise. As an early member of Hyperledger and active contributor to the Hyperledger Fabric and Stellar blockchain projects, IBM is dedicated to advance cross-industry blockchain technologies supporting the development of openly-governed transactional business networks. IBM has worked with more than 400 clients across financial services, supply chains, IoT, risk management, digital rights management and healthcare to implement blockchain applications. For more information about IBM Blockchain, visit ibm.com/blockchain.
Source:

15. New business models unlock value
we.trade brings together fierce banking rivals to create new business value in offering liquidity to small and medium-sized businesses.

16. Source: https://www. maersk

17. Source: https://www. maersk

18. Lecture 12
Case study

19. Questions Why is supply chain finance for Unilever so important?
Why is supply chain finance for Unilever’s Tier 1 & Tier 2 suppliers so important?

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

22. Ticker symbol
Company name UL
Unilever(ADR) PG
Procter & Gamble Co

23. Case Unilever SCF Forum (10-12-2014) Jean-Christian Dumas
Senior Procurement Finance Manager /Business Controller at Unilever

24. Source:
Annual Report 2014 Unilever

25. Our growth model is enabled by a leaner, fitter, more agile Unilever, with costs being reduced through our supply chain efficiency programmes. These have been boosted by our low-cost business model initiative, which has delivered €450 million of savings since 2011.
Source:
Annual Report 2014 Unilever

26. The USLP is embedded into our business model.
It helps to drive long-term shareholder value by:
driving growth through innovations that bring new sustainability benefits to consumers and retailers;
reducing waste and energy and thereby saving cost; and
managing risk in our supply chain, for example by securing long-term sustainable sourcing of materials.
Source:
Annual Report 2014 Unilever

27. SUPPLY CHAIN
Our business depends on purchasing materials, efficient manufacturing and the timely distribution of products to our customers.
Our supply chain network is exposed to potentially adverse events such as physical disruptions, environmental and industrial accidents or bankruptcy of a key supplier which could impact our ability to deliver orders to our customers.
The cost of our products can be significantly affected by the cost of the underlying commodities and materials from which they are made. Fluctuations in these costs cannot always be passed on to the consumer through pricing.
Source:
Annual Report 2014 Unilever

28. Finance
Source:
Annual Report 2014 Unilever

29. Source:
Annual Report 2014 Unilever

36. Recent contribution in SCF Redraw the map to reduce suppliers’ finance costs, by Professor Michiel Steeman

39. Quadrant 4: Contract farming
In this model, where finance costs are high across the supply chain, the large buyer purchases the seeds, fertiliser and all the other things needed by a farmer who then becomes a contract manufacturer. The buyer keeps ownership of the produce throughout the supply chain. This is a model often seen in developing countries, for example, where much of the supply chain is financially weak. These farmer/suppliers’ margins may be smaller under this model than they otherwise would be, and the profit upside is more limited as farmers have less opportunity to deal with other buyers; they are more tied in to just the one supply chain. But they benefit from having a more certain income stream, relieving them of the downside risk.