08News On the line at Jaguar.


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Working capital optimisation still a priority, says report


As the global economy picks up, working capital optimisationwill continue to be a high priority for corporate treasurers in 2015, a survey of 78 corporate treasurers and financialmanagers by Demica, has revealed. It found that treasurers are


increasingly looking beyond the traditional forms of finance to explore awider range of alternative funding options that support theirworking capital requirements, ranging from supply chain finance, to trade receivables securitisation (TRS), to factoring. The research, produced in


conjunctionwithTreasury Management International, reveals thatmore effective cash management/forecasting (63 per cent respondents), releasing working capital (60 per cent) and improvingworking capital risk management (58 per cent) are the threemost important priorities for surveyed treasurers in the coming year. Demica said the survey’s sample represented a strong


enthusiasmfor SCF,with 40 per cent of respondents already offering such a finance facility to their suppliers. Enhancing working capital liquidity for the buyer company is themost important driver for the implementation of the programme, followed by the provision of liquidity to suppliers and reducing supply chain risks. The research also found that


trade receivables securitisation (TRS) is becoming an increasingly important component in corporates’ working capital strategy. 16 per cent of respondents are currently running aTRS programme.The decisive driver for doing so is, first and foremost, to improve liquidity. Among those that have not


implemented aTRS programme, a quarter are planning to do so in the next 12months. Demica CEOPhillip Kerle said:


“The financial crisis has highlighted the importance of cash and liquidity in times of need.”


Special trains tomove parts around new Jaguar plant


Jaguar Land Rover has chosen specially adapted cargo trains to move parts around its new £500mEngineManufacturing Centre, inWolverhampton which has been officially opened by the Queen. The facility will be home to the ‘Ingenium’ engine family,


which will power a new generation of Jaguar Land Rover products designed, engineered andmanufactured in the UK. This starts with the two-litre diesel engine in the Jaguar XE. A spokesman said: “The logistical challenge that a facility of


this scale represents is immense, and the logistical department is every bit as vital to the success of the centre as the manufacturing process itself.” The 100,000 sqmEngineManufacturing Centre has 71


suppliers, approximately 30 per cent of which are based in the UK.Hundreds of individual parts will be required when both diesel and petrol divisions are operational. These will be delivered to twomain receiving areas – five bays


in the assembly area and two in the rawMmterials area.Once inside the facility, the parts will be transported on specially adapted cargo trains,making 133movements a day, facilitating a large volume of engines. JLR says this process has an inherent capacity for flexibility,


allowing logistical operations to keep up with the rapidly evolving demands of themodern automotive industry. When operating at full capacity, the EngineManufacturing


Centre will employ 1,400 people with a further 5,500 jobs created in the supply chain,where production of these engines will help provide a criticalmass for inward investment.


Environmental supply chain can drive revenue


The environmental supply chain is an untapped opportunity to capture value and drive top line revenue, according to awhite paper commissioned byDHL. It argues thatwhere the supply


chainwas formerly theweakest link froma sustainability perspective, the new, closed loop environmental supply chain is a business imperative that can reduce carbon, deliver significant cost savings and improve favourabilitywith consumers. “ClosingThe Loop: Building


the Environmental Supply Chain” by LisaHarrington, president of the lharrington groupmakes the case for businesses to think differently about their supply chains and the ‘costs’ attached to going green. It points out that best-practice


businesses, such as P&Gwhich recently reported nearly $1billion in cost savings fromits environmental supply chain, no longer perceive sustainability as a cost, but recognise it as an opportunity to create value. LisaHarrington said: “A great


shift in attitudes is currently underway across industries. Gone are the old and dated misconceptions that ‘green’


means higher costs.Where the environmental supply chain model is executed correctly, companies are capitalising on increased revenue and social kudos fromcustomers,while also ensuring their business is operating in linewith necessary compliancemeasures. “The recipe for success is to get


the four principles right.These are reduce, reuse, recycle and recapture.” Thewhite paper identifies


solutions thatwill enable companies to realise the four principles of the environmental supply chain. A Lead Environmental Partner (LEP) fulfils a control tower role by monitoring the forward and reverse flows of the supply chain. The next solution is the closed


loop supply chainmanagement approach,which integrateswaste recycling, value recovery and environmental protection compliance through an LEP that manages collection, sortation and recycling streams. Finally, the LEP provides


visibility through its detailed carbon reporting that allows progress tracking better management.


December 2014 Supply Chain Standard


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