Visa Syncada CEO preaches supply chain visibility
Before you read this, check out this story in November's issue of Supply Chain Digital. Trust us, it's way cooler!
Not surprisingly, it’s getting harder and harder for supply chain companies to recoup the capital listed on their outgoing invoices. What is surprising are the overall inefficiencies of the system between shippers and carriers.
“There’s a lot of time spent and energy invested when the phones start ringing and the carrier wonders when they’re going to get paid,” Visa Syncada CEO Kurt Schneiber said. “If the supply chain for the next shipment isn’t paid, and a carrier is already behind for two months of payments, and he might just say ‘You know what? I’m going to wait.’”
KURT SCHNEIBER ON THE FINANCIAL SUPPLY CHAIN
According to Schneiber, that disconnect is happening at a much faster rate thanks to a market flooded with smaller carriers.
“Because the carrier market is so fragmented, their access to funds is restricted,” Schneiber said. “The ability to finance those invoices is quite valuable. Carriers without access to cash can be strapped, and might not be as predictably available to the shippers.”
So, what can carriers do? According to Schneiber, adding visibility into their own supply chain is a good place to start.
“Many of these carriers sit at a distance, and they have a clouded vision of the process to get their services approved and paid at the offices of their buyers,” Schneiber explains. “They don’t have actual visibility into their own costs, and shippers struggle to manage the true freight spend.”
Automating the invoice presentment process can help matters, while making invoices crisp and clear in their language can also make for faster payments. It’s there that Visa’s financial supply chain mastery can step in.
“Part of the Syncada solution is an embedded trade finance mechanism that allows for immediate financing for an invoice as soon as it’s approved by the system,” Schneiber said. “This makes it so that buyer and supplier, shipper and carrier, know exactly when something is approved.”
CITI AND SYNCADA FORM VISA PARTNERSHIP
The battle between shipper and carrier continues to wage throughout the global financial supply chain thanks to rising logistics costs, and Schneiber thinks that companies would be wise to improve their supply chain visibility, because he sees this problem as a long-term issue.
“I think these costs will level out when the economy reaches greater stability, but it might be difficult to identify that point in time,” Schneiber said.