Latest

The supply chain is a company's secret weapon

In capital-constrained times, Drew Hofler of Ariba says the supply chain is a "secret weapon" for companies to put money to work.

We have all heard the stories about corporates hoarding cash. REL Consultancy estimates that there is USD 1.7 trillion being hoarded in cash by big corporations. Most corporations are not getting a great return on their cash however, with yields on most short-term investments much lower than they have been historically.

In the January 2012 edition of financial-i, Drew Hofler, senior manager, Financial Solutions, Ariba, maintains that corporates should seriously consider putting their excess cash to work by looking more closely at opportunities within their supply chain. "Cash that's hoarded in traditional, low-return liquidity vehicles is cash that's losing value and potentially creating risk," says Hofler.

Ariba maintains that buyers on its network captured discounts of more than USD 4.5 million in 2011 and that buyers receiving these discounts saw average annual returns of between 10% and 30%, far greater than the returns delivered through traditional investments.

For Drew's full article click here.