Remember when clearing new credit applications was a 20-30 day process? Reference letters were mailed out and you hoped that you would get a response. Credit reports had to be built and that could take anywhere from 2-3 weeks. Keeping track of the A/R was done from green bar computer paper and you would use a marker to indicate that a payment was made. The rest of the day was used for collection calls and other manual tasks.
Fast forward to 2018. It is reported that 80% of the credit function is now automated with scoring models approving a large percentage of accounts and the internet accelerating the other jobs that used to consume most of your time.
Has your role or more importantly “value” to your company been diminished by this new technology? What will the job description be in ten years?
Those who “get in front” of this change will increase their odds of survival and a great way is to expand your risk management skills to the vendor side.
Supplier risk management is gaining more traction as companies reach out to vendors globally. Who better to analyze the potential red flags of doing business with a new or existing vendor than someone who has been performing the job on the customer side.
Is your primary vendor sufficiently capitalized to continue supplying you with raw materials? Do they have the capacity to produce product for you if they bring on a new customer? Has anyone vetted the shipping companies used? Do you have a secondary supplier and are they financially stable if there is an interruption with your primary? What about the political situation in the country? A supplier risk manager knows the answers to all of these questions.
Working with your procurement department or whoever seeks out new suppliers can expand your role and value to your company. Just ask management to consider what would happen to sales and market share if you were not able to get product from your vendors domestically or internationally for 30 days.
For the past 3 years, CMA’s Supplier Risk group has brought companies such as Nestle and Pepsico together, exchanging best practices to assist those entering this field. You do not have to be with a Fortune 100 company to learn from these “credit managers” on how to position yourself in this growing profession.
Check with anscers and the CMA News for the time and agenda of the group’s next meeting and get in front of the next generation of credit management. For more information, email us at firstname.lastname@example.org.
If your responsibilities include vetting your vendors to ensure the steady supply of raw materials or services to your company, you need to join the next teleconference meeting of CMA’s Supplier Risk Credit group to provide strategies to assist you in managing your suppliers.
On August 29 at 10am, we will have two guest speakers. First up is Gary Mendell of Meridian Finance, who will be providing an international supplier risk update on topics including international supply-chain issues updates, assessing the reliability of vendors in other countries, and protecting advance payments against non-delivery from abroad.
The second speaker will be Nick Vyas, an expert in supply chain management, who will address establishing a vendor risk framework. Mr. Vyas is the Executive Director for the Center for Global Supply Chain Management, the Academic Director for the MS in Global Supply Chain Management, and an assistant professor of clinical and data science and operations for the Marshall School of Business at the University of Southern California.
Whether your essential suppliers are in California, the U.S. or worldwide, any interruption in the Supply Chain can have a devastating effect on your company.
For more information on how you can join this Group discussion, contact Larry Convoy at email@example.com.
If one of your responsibilities is to vet your company’s vendors, CMA recommends that you participate in the upcoming Supplier Risk Credit Group on January 25.
The January meeting of this group will feature special guest speaker Ken Bonitz. Bonitz is the Supply Management Solutions Advisor with Dun & Bradstreet, and over the past 15 years his primary focus has been with Fortune 500 companies; he’s had great success in all industry verticals.
Ken Bonitz is a 35-year supply-chain professional who has more than 20 years’ experience in high tech, developing supply chain solutions that focus on operational efficiencies, cost savings, profitability, risk and product support. He also has 15 years supply chain consulting experience, helping customers identify supply chain financial risk, operational risk, country risk, leverage opportunities and ERP/MDM improvements.
The meeting will take place at the CMA Glendale offices, or you may participate via teleconference.
Among the items on the agenda: D&B Overview; D&B Segment Overview; D&B Supply Management Overview; Supplier Predictive Scores; Supplier Predictive Risk Tools; and a Questions-and-Answers session.
For more information about how you can get involved, contact Larry Convoy at firstname.lastname@example.org or 818-972-5323. We look forward to your participation in what is sure to be a lively discussion.
Thanks to all the credit practitioners, industry experts, and industry partners who participated in the many valuable conversations at CMA’s recent CreditScape Summit. Our goal was to create an interactive, collaborative learning environment, and I was so pleased with the high level of sharing among all participants throughout the two-day event.
I was equally pleased with the audience response to facilitator Bob Shultz’s approach to process improvements within what he calls the Cash-to-Cash cycle. Also known as the cash conversion cycle, Shultz emphasized that the role of credit management extends beyond basic credit and collections processes. There is the opportunity to impact the company’s liquidity through good inventory and accounts payable management, in addition to traditional accounts receivable management. Collections trainer Bart Frankel recommended that credit people take responsibility for helping to resolve issues that arise out of these “other” departments, as they ultimately impact the credit department’s effectiveness in granting credit and collecting receivables.
Experienced credit practitioners and other credit industry experts shared specific examples of how they successfully influenced and improved processes across the Cash-to-Cash cycle and created more cash flow from operations.
Another example of how CMA is advocating for the expansion of the traditional role of credit within the enterprise is the suggestion that credit can support procurement in evaluating the risk of critical suppliers. Recently, I had the unique opportunity to participate as a panelist in the fourth annual Global Supply Chain Management Conference at USC’s Marshall School of Business. As panel moderator, CMA Member Alvin Moreno, Director of Global Supply Chain Credit Risk with Nestle USA, made the case that the credit department is best positioned to help the procurement department assess the financial stability of a company’s suppliers. In the wake of shipper Hanjin’s bankruptcy, supply chain disruption has continued to grow as a concern for companies that rely on critical suppliers, which gives credit the opportunity to add new value to the business.
As a panelist, I told the audience of supply chain professionals about how CMA has worked with Alvin, his team at Nestle USA, and other CMA Members to create a special credit group in which credit managers collaborate on processes and best practices in supplier risk evaluations. More information about that collaboration is here.
Clearly, we at CMA are big fans of process improvement through collaborative learning. But as I mentioned in my opening remarks at CreditScape last week, credit managers need to step up and become credit leaders if they are to be successful in driving the organizational changes necessary to make those process improvements a reality.
How are you leading change in your organization? I welcome your feedback.
CMA Mentor of the Year Alvin Moreno, MBA, of Nestle USA, has 30 years of extensive experience in the credit industry. He has three masters degrees and a six sigma green belt. He is passionate about using sound credit and risk management principals to reduce risk. He is always willing to guide his team and those around him to grow and recognize their potential. Under his leadership, CMA created the Supplier Risk Management Industry Credit Group over the past year, and the group has been successful as the first best-practices group CMA has ever offered.
Congratulations again to our winner, and we appreciate all that you do for CMA and its members.