The events of 2020 disrupted supply chains within businesses of all sizes, and impacted the ability of many to provide their usual products and services in the same capacity. To illustrate this point, Harvard Business Review estimates that 95% of business leaders in manufacturing, financial services and technology experienced disruption to supplier management last year.
For some smaller firms, Covid-19 even meant reducing or halting production altogether, causing a lot of uncertainty. An added burden has been an increase in those experiencing late payments, with many seeing an uplift as a result of the pandemic. This has exacerbated a longstanding problem, with the FSB estimating that 50,000 small businesses go bust business each year because of late payments.
However, amid these challenges, a silver lining has been the way that businesses have embraced technology to overcome hurdles created by the virus. Companies needed to find new ways of ensuring business continuity, from sourcing different products and services to adopting new, data-led tools and capabilities. This has been as noticeable in supplier management as it has been in other areas of business life, and is a key component to success in 2021.
Due to the pandemic causing a large shift to online and digital payments, many companies now have access to a huge amount of data about their supply chain, which they can harness to better run their procurement and payment practices. Data can show who their suppliers are, their location, how important are they to the business, preferred payment methods and even whether discounts are available through early payment of invoices.
At Barclaycard Payments, we have developed a new platform – Barclaycard Payment Intelligence (BPI) – that combines accounts payable information with third-party data and proprietary algorithms to do just that.
Using this insight, BPI helps businesses catalogue their suppliers based on the number and value of transactions processed, as well as their size, location and industry, to help identify strategic improvements that can be made. For companies with thousands of suppliers on their books – big and small – this can offer opportunities to drive significant time and cost savings from implementing new payment strategies.
For too long, supply chain processes have been clunky and prohibitive, putting capital at risk for businesses and their suppliers. But by embracing the latest technology and data analytics within platforms such as BPI, companies can maintain vital supplier relationships, and improve and futureproof their commercial operations.
As the world looks to learn from the challenges presented to businesses by the pandemic, these trends will only become more important.
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