Philips Offers Crucial Support to Suppliers With C2FO

Find out how C2FO worked with Philips, the Dutch healthcare giant, to offer their suppliers fair and affordable access to liquidity on demand.

The challenge

Philips’ previous SCF (supply chain finance) solution was a bank-led reverse factoring scheme — but it required a huge amount of paperwork, long and complicated set-up processes, and could only engage suppliers above a certain size.

They selected C2FO to support them for the following objectives: 

• Develop and deploy a working capital solution where suppliers could prioritise urgent invoices and easily determine discounts where relevant

• Grow access and participation in their early payment programme

• Create a solution that aligns with existing government programmes that increase access to liquidity for SMEs

• Build a solution covering Philips’s full global spend, increasing EBITDA and generating higher returns on short-term cash

• Deliver a solution with zero integration required for enterprise resource planning software, low resourcing requirements, and that would work alongside their existing long-term strategic initiative

• Support their corporate efforts to de-risk their supply chain as part of a sustainable ecosystem

The solution

C2FO’s Philips Early Payment Programme went live in July 2018 across 133 countries and has improved the financial stability of thousands of Philips’ suppliers around the world.

As well as consolidating the long-term sustainability of the company’s supplier network, the Programme is living proof of its commitment to collaboration, innovation and corporate social responsibility.

The flexibility the Programme delivered proved vital during the pandemic: at its height, Philips created a special rate market for supply chains that supported the global COVID-19 response. In collaboration with C2FO, Philips set up an early payment platform for producers of medical equipment so they could be paid earlier and at preferential rates to meet the increase in demand for medical equipment — indicating both the resilience and utility of the C2FO platform.

The results

Philips now uses C2FO to accelerate its early payments, reinforcing and accelerating the firm’s commitment to improving the lives of a million workers in its supply chain by 2025.

The numbers speak for themselves:

• Since launch, more than 19,750 suppliers have had accounts payable loaded onto the platform.
• C2FO executed the implementation in 10 weeks, requiring only a simple file exchange from Philips.
• Philips saw a return on its investment within the first 30 days after launching its early payment programme.