The successful harnessing and sharing of data will be key to the survival of businesses as the Covid crisis deepens across Europe.

The Covid-19 global crisis could spark the acceleration of purchase order financing as companies urgently need cash to bring their supply chains back to life.

The scale of the human tragedy of the Covid-19 outbreak unfolding around the globe can often seem overwhelming. Who could anticipate the speed at which the virus took hold over one country after another? National death tolls have become a depressingly regular feature of each passing day. As I write this, there have been more than 183,000 deaths worldwide.

Governments and regulators are calling for a reappraisal of some supplier finance programmes. We should respond positively, says Michiel Steeman.

We are living in an age where there is acute awareness of the social and environmental impact of our actions, both at an individual and corporate level.

We are all familiar with how eager supply chain finance (SCF) providers are to make bold claims of how much their businesses have grown from the previous year and how many new clients they have won. These glowing announcements are inevitably a common occurrence in all of our overstretched inboxes.

As I prepare my keynote speech for the sixth China Supply Chain Innovation Summit in Shenzhen this month, I mull over some of the defining trends that are shaping the country’s SCF market – making it such a dynamic, exciting and yet very different space to operate in compared to Europe or the US.

Digging and drilling resources out of the ground, making stuff with them, selling them, then letting consumers eventually dump that stuff somewhere: this is a simple business model but one that has been tolerated – encouraged, even – for far too long. We all know that the world’s attitude to this linear model is changing. And the world is grateful for that.

I’ve recently made my third trip to China this year. At a conference I joked that, if my increasingly frequent trips are any kind of lead indicator then the supply chain finance market there is about to explode.

Get out your white coats: we’re going to create a laboratory. The interface between the supply chain and finance is our specialist area, and we’ve recently started seeing some extremely interesting but complex technology develop in this space. We need to understand it and we need to see how it can be made to work for us.

This year’s SCF Barometer again brings the Supply Chain Finance Community together with PwC to see what sort of picture emerges from a statistical survey of international business. It’s a picture that, I think, matches and reinforces the experience that SCF professionals gain in the field in their face-to-face dealings with corporates.

Inventory is, for many companies, the largest component of working capital and can be very slow to turn over. It’s an expensive burden – and yet inventory finance has traditionally proved difficult if not impossible for companies to access. Banks are not enamoured with the product because the risks involved weigh heavily on their balance sheets, directly impacting their capital requirements.

The benefits of supply chain finance as a portfolio of tools to reduce cost and optimise working capital are, of course, very well known to us all. And SCF is also widely acknowledged as a means of reducing the risk of supplier failure by enabling suppliers to get early access to liquidity.

So much of the world’s trade goes through Asia these days that it seems perfectly natural to explore for opportunities to develop supply chain finance in this market. At the same time, however, as I write this on my return home from Singapore and our first-ever Supply Chain Finance Community Forum Asia, I find myself reflecting on the progress that has already been made – in some cases, progress that professionals in western Europe and the United States can learn from.

Supply chains are complex beasts. Suppliers and customers create a web of trading relationships that are difficult to map – not least because, depending on the industry, the products and the service, suppliers can also be customers. A company’s supplier could also sell to other suppliers (see chart 1, below). Products can be physically shipped from highly-rated suppliers to less-highly rated suppliers for additional value to be added, then shipped again to a highly-rated business to be sold on to an end-consumer.

We are fortunate that, for the good of the planet, consumers and regulators have environmental concerns much more ‘front of mind’ than ever before. From carbon emissions to resource depletion to the junk that floats in our seas, we all have a far greater awareness of the need to be much more careful about how we use and dispose of all the things we buy.

The signing of another six major Dutch companies to the Betaalme.nu programme was a real milestone. The total number of Dutch companies that have taken the ‘Pay Me Now’ pledge is now 40 – but our ambitions for Betaalme.nu certainly don’t stop there.

Way back in the early days of the internet, nobody seemed quite sure what it was or what its potential could be, but it seemed certain to be the start of something big. Exactly what that potential was began to emerge only over time, but it took pioneers to take early steps to put real, practical applications in place, and then build on those.

When you are shipping goods from A to B, the safe arrival of the goods in the right place is obviously critical to the success of international trade flows.

At the same time, as we all know, equally important are the financial flows – without which those goods couldn’t be paid for.

Over the 20 years since I first started to learn more about SCF by conducting in-depth research, one thing has always been very clear to me: this is a tool that has almost limitless possibilities. That might sound like a simplistic, almost naïve comment – but the evidence that I have seen proves to me that it is true.