The supplier financing programme in the German-based chemicals and pharmaceuticals group was initiated as part of a broad working capital initiative launched in 2008. This took aim att expanding the days payable outstanding (DPO), without any negative impact on the suppliers.
The story is told in a contributed case-describing article, at industry website Treasury Management, written by Michael Friede, who is the head of global procurement intelligence for Bayer’s Materialscience subsidiary.
Already the pilot phase of the supplier finance programme, launched in the German part of Bayer Materialscience in late 2009, was deemed highly successful.
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A core purpose of the solution is to let suppliers reap benefit from giant Bayer’s good access to capital. Simultaneously, Bayer gains advantages in terms of operational stability, as the supply chain risks were mitigated. Also internal processes could be made more efficient.