Training on Supply Chain Finance and Working Capital Optimization

Module 1: The Intersection of Supply Chain and Finance

• The financial impact of supply chain decisions: inventory, payables, receivables.

• Key financial statements: balance sheet, income statement, and cash flow statement.

• Supply chain's role in shareholder value creation.

• Case Study/Hands-on Exercise: Analyze a company's financial statements to calculate its cash conversion cycle and identify supply chain-related drivers of recent cash flow changes.

Module 2: The Cash Conversion Cycle (CCC) in Depth

• Deconstructing the CCC: days inventory outstanding (DIO), days sales outstanding (DSO), days payables outstanding (DPO).

• Industry benchmarks and best-in-class performance.

• Trade-offs between working capital optimization and supply chain resilience.

• Case Study/Hands-on Exercise: Calculate the CCC for three competitors in the same industry, comparing their DIO, DSO, and DPO to identify best practices and potential improvement areas.

Module 3: Inventory and Working Capital

• The financial cost of holding inventory: carrying cost components.

• Strategies to optimize inventory without harming service levels.

• Impact of forecasting accuracy and lead times on working capital.

• Case Study/Hands-on Exercise: Model the working capital impact of reducing safety stock for a key SKU, quantifying the cash release against the potential risk of stockouts.

Module 4: Payables Management and Supplier Financing

• Strategic management of accounts payable: extending payment terms.

• The supplier's perspective: cash flow needs and supplier risk.

• Implementing dynamic discounting programs.

• Case Study/Hands-on Exercise: Evaluate a proposal to extend payment terms from 30 to 60 days for a strategic supplier, analyzing the financial benefit for the buyer and the potential risk to the supplier relationship.

Module 5: Supply Chain Finance (SCF) Programs

• Overview of SCF: reverse factoring, receivables financing, and inventory financing.

• How SCF benefits both buyers and suppliers.

• Selecting and implementing an SCF platform.

• Case Study/Hands-on Exercise: Design a reverse factoring program for a manufacturing company, identifying eligible suppliers, defining program parameters, and projecting the working capital benefits.

Module 6: Trade Finance Instruments

• Letters of credit (LCs): types, process, and risk mitigation.

• Documentary collections, bank guarantees, and trade credit insurance.

• Managing foreign exchange (FX) risk in international procurement.

• Case Study/Hands-on Exercise: Review a letter of credit for an international shipment, identify discrepancies that could lead to non-payment, and propose corrective actions.

Module 7: Supplier Financial Health and Risk Assessment

• Analyzing supplier financial statements: liquidity, solvency, and profitability ratios.

• Early warning signs of supplier financial distress.

• Integrating financial risk into supplier selection and management.

• Case Study/Hands-on Exercise: Conduct a financial health assessment for a critical supplier using their latest financial statements, calculating key ratios and developing a risk mitigation plan.

Module 8: Customer Credit and Receivables Management

• Setting customer credit limits and terms based on risk.

• Managing the order-to-cash cycle.

• Impact of logistics performance on DSO (e.g., billing accuracy, proof of delivery).

• Case Study/Hands-on Exercise: Analyze a customer's payment history and credit profile to recommend an appropriate credit limit and payment terms, balancing sales opportunity against risk.

Module 9: Financial Metrics and Supply Chain KPIs

• Developing a financial supply chain scorecard.

• Linking operational KPIs (e.g., on-time delivery, inventory turns) to financial outcomes.

• Communicating supply chain value to finance and executive leadership.

• Case Study/Hands-on Exercise: Create a supply chain financial dashboard that translates operational metrics (e.g., freight cost, inventory levels) into their impact on cash flow and EBITDA.

Module 10: Building a Collaborative Finance-Supply Chain Relationship

• Breaking down silos between finance and supply chain.

• Joint planning processes (S&OP and integrated business planning).

• The future of supply chain finance: technology, sustainability-linked finance, and embedded finance.

• Case Study/Hands-on Exercise: Develop a presentation for the CFO to advocate for a new supply chain finance initiative, including the business case, projected ROI, and risk considerations.