Supply Chain Finance at Procter & Gamble

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Case

Reference no. 9-216-039

Subject category: Finance, Accounting and Control

Authors: Benjamin C Esty (Harvard Business School); E Scott Mayfield (Harvard Business School); David Lane (Harvard Business School)

Published by: Harvard Business Publishing

Originally published in: 2016

Version: 3 May 2017

Revision date: 31-May-2017

Length: 16 pages

Data source: Field research

Topics: Working capital; Supply chain; Finance; Cash flow; Value creation; Suppliers; Liquidity; Accrual accounting; Accounts payable; Costs; Banks; Financial strategy; Multinational corporations; Products; Supply chain management

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Abstract

In April 2013, Procter & Gamble (P&G), the world's largest consumer packaged goods (CPG) company, announced that it would extend its payment terms to suppliers by 30 days. At the same time, P&G announced a new supply chain financing (SCF) program giving suppliers the ability to receive discounted payments for their P&G receivables. Fibria Celulose, a Brazilian supplier of kraft pulp, joined the program in 2013, but was re-evaluating the costs and benefits of participating in the SCF program in the summer of 2015. The firm's treasury group and its US country manager must decide whether to keep using the program and, if so, whether to keep their existing SCF banking relationship or start a new relationship with another global SCF bank.

Locations:

United States; Brazil

Industries:

Banking and investment industry; Forestry industry; Retail trade

Size:

> 1 billion; Fortune 500