By THE NATION
“TMB services business clients with differences. Fintech companies’ concepts are applied in creating supply chain financing solutions whereby an ecosystem is built and involves all relevant parties in the supply chain. Our idea is that all parties win. Our goal is not to generate revenue or grow fee income, but to ensure sustainable growth of our clients’ supply chain,” Rachakorn Chayapirad, head of domestic transaction banking at TMB, said.
Rachakorn’s remarks reflect the marketing strategy of “TMB Supply Chain Financing”. And the strategy is now being applied to CJ Supermarket, a Thai convenience store chain.
Supply Chain Financing and E–Supply Chain have been trending following increasing digitalisation in Thailand’s financial industry. The trend kicked off with the National e-Payment that waives transfer fees and brings down the transfer, receiving and sending cost to zero. Digital technology also leads to the migration of paper-based operations to an electronic platform. Both were key factors that contributed to a jump in the supply chain industry’s growth in the past 1-2 years.
TMB said it sees small and medium-sized firms in particular as needing a sizeable amount of working capital but suffering from limited access. As their information appears on the digital platform, TMB witnesses the flow of business between buyers and sellers in the supply chain. The information can be analysed and a loan can be approved accordingly. Credit extension is quick while risk analysis quality improves, leading to quick loan approvals and higher credit amounts compared to unsecured lending, the bank said.
Rachakorn explained that TMB and CJ Supermarket’s partnership is aimed at moving its supply-chain management to the next level and enhance the efficiency. It is set to address the pain point that orders placed with small and large suppliers were based on papers. Though CJ Supermarket has put in place an electronic system, several suppliers prefer the paper-based system which were time-consuming and increased cost. Some documents are missing or contain errors.
“Our question is what platform will entirely turn the paper-based system to an electronic system, a system that allows CJ Supermarket to place orders electronically and suppliers can produce products according to the electronic orders. And the platform must also be able to immediately transform the orders to electronic purchase orders and such information should be accessible by CJ Supermarket. All transactions on the electric platform can reduce the operating cost and enhance management efficiency. Plus, the information can be stored for future analysis.”
Veeratham Setthasit, deputy managing director of CJ Express Group Co Ltd, said: “CJ Supermarket is a large-scale retail chain. We’re the first Thai retailer with annual sales exceeding Bt10 billion, being in an industry dominated by foreign retailers. Our key strategy lies in inventory management. We’re confident that our supply chain is as efficient as that of foreign retailers. Our supply chain now involves more than 600 suppliers, including over 200 large-scale suppliers.
“Our daily ordeal is to handle orders from over 300 outlets, involving over 10,000 SKUs [stock-keeping units]. That means over 3 million sets of data. TMB’s EDI system will facilitate the sending of purchase orders to suppliers and suppliers will receive orders that contain no error. This ecosystem will benefit our operations and our suppliers.”