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Created on 27.09.2019

Swiss WCM Award 2019: how Kühne + Nagel gives suppliers a boost with working capital management

The global logistics company Kühne + Nagel was the winner of the Swiss WCM Award 2019. Roger Sutter, Group Treasurer for Kühne + Nagel, lays out the approach behind their working capital management concept and what makes it so successful.

What does the Kühne + Nagel WCM solution do?

Our integrated solution links the order process, electronic invoicing and supply chain finance with each other. Banks handle the interim financing of invoices confirmed by Kühne + Nagel, which enables us to pay our suppliers quickly. Suppliers can use our platform to send their invoices and view any suppler chain finance details. 

What does “quick payment” mean in terms of days? Or, to put it another way, what exactly has the solution achieved as far as payment targets are concerned?

Thanks to this solution, over 500 of our suppliers were able to reduce their days sales outstanding (i.e. the number of days between the time of invoicing and the receipt of payment) from 60 days to an average of 10 days and also increase their working capital by around CHF 70 million. 

Why did Kühne + Nagel launch this WCM initiative?

We knew we had to do something that would enable us to pay our suppliers, most of whom are small and medium-sized companies, sooner. We also knew we needed heavily integrated systems to carry out payments as quickly as possible

So far, the WCM solution has achieved positive results. But how did you arrive at this solution? How much persuading did you and your team have to do?

We started seven years ago and were one of the first logistics service providers to offer this kind of solution. The approach we took was new to our industry, which meant we had to do a lot of persuading. The first thing we had to do was win our suppliers over to electronic invoicing. In the beginning, we held lots of talks to explain that switching over from paper invoicing to electronic invoicing, combined with our integrated supply chain finance solution, would speed up payments significantly. 

What about now?

Since then, we have launched e-invoicing in 40 countries and our supply chain finance solution in 20 countries. This is a real success story that makes launching these solutions in other markets worldwide a lot easier. 

Aside from launching these solutions worldwide, what are your main objectives now?

We are working on further improvements to our internal process so we can pay our suppliers even more quickly in future. Some suppliers are already receiving payment within three days, and we want this to be the case for a higher proportion of suppliers in the future

What does the Swiss WCM Award 2019 mean to you?

It is tremendous recognition for the sheer amount of time we have invested in developing this solution. The award is also testament to the fact that our integrated approach stands out from other solutions. 

About the Swiss WCM Award

The Swiss WCM Award, granted by the University of St. Gallen and PostFinance, is presented to companies with exceptionally successful WCM concepts or innovative approaches. The jury is made up of distinguished representatives from the worlds of business and academia.

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