Category: Transport and logistics
Winner: Deutsche Lufthansa
Summing up: An innovative and bold solution by CRX Markets was the obvious choice for Lufthansa’s first-ever supply chain finance programme.
What the judges said: “Very professional and thorough as well as innovative. Objectives were fully met by selecting a provider solution which allowed diversification of funding sources, cost-efficient implementation and transparency and competition on discount rates.”
- The first-ever supply chain finance programme to be implemented by Lufthansa
- CRX Markets was chosen as it met the criteria outlined by Lufthansa, which included diversification of funding sources, cost-efficient implementation and transparent pricing
- CRX Markets was also able to ease implementation with their proprietary add-on, which integrates CRX Markets into SAP.
- Within one year of the programme launching 85% of expected cost savings were achieved
- Supplier onboarding was carried out by the finance team with introductions made by procurement
Working capital management was a high priority for Lufthansa and so the implementation of a supply chain finance programme was a key part of this initiative. The programme gained the full support of the CFO and the rest of the senior management team.
Lufthansa demonstrated considerable courage by becoming the pioneer customer of CRX Markets, chosen against other, more established vendors. Lufthansa selected CRX Markets as they were able to offer a multi-investor platform with transparency on rates. The SAP add-on simplified implementation.
Lufthansa’s criteria in its RFP included:
- strengthening supplier relationships
- reducing working capital related costs
- a diversified investor platform
- transparency and competition on discount rates
- ease of implementation
The programme chosen used a centralised approach to onboarding suppliers in a bid to improve supplier uptake. Procurement led the introduction process with ultimate responsibility resting with the finance team.
The uptake from suppliers was particularly interesting as suppliers with better credit ratings than Lufthansa’s were early joiners to the programme. That’s because they were able to benefit from competitive discount rates and a reduction in their DSO (days’ sales outstanding).
The programme has now been running for a year and of the suppliers on-boarded 85% of the expected cost savings expected have been achieved. The programme has also stemmed improvement programmes in the accounts payable process through the implementation of a digital invoice initiative, which will streamline and speed up the invoicing process.
Overall, a programme described by the judges that demonstrates “innovation, best practise and a certain courage”.