9 Required Skills That Appear in Almost Every Supply Chain Finance Job Posting
May 27, 2021
Looking to build a career in supply chain finance? We've compiled a list of the nine skills included in most SCF job postings. Check to see how many of these boxes you tick.
Since the beginning of time, we've needed to move things from one place to another. Cave dwellers shuffled their stone tools between their caverns. Middle Agers used carts and horses to transport wheat and barley from village to village. More recent developments in ships and rail have dramatically improved load capacity and delivery times.
Modern-day technology brings extraordinary advancements to connect the world to its manufactured goods. However, someone needs to manage this process to increase efficiency, reduce costs, and speed transport.
Getting things moving from place to place is the ultimate goal of supply chain managers. Supply chain management (SCM) is a vast enterprise encompassing many specializations, including the emerging field of supply chain finance (SCF).
Incorporating financial institutions to manage the capital investments of both shippers and receivers necessitates SCF specialists. They work on the front lines of the supply chain to direct financing options to shippers of goods, especially when the process involves international trade with developing countries. The growing field requires professionals who bring business acumen and analytical and strategic skills to a position with many spinning plates.
What skills are needed to excel in this role? We've identified nine required skills that appear in almost every supply chain finance job posting to answer that question. In this article, we'll cover:
- What is a supply chain finance specialist?
- Supply chain finance skills
- Do you need a master's in supply chain management?
What is a supply chain finance specialist?
Supply chain finance demands knowledgeable business analyst professionals who can navigate a complex array of bankers, accountants, attorneys, and manufacturers to keep the money and goods flowing across an increasingly connected world.
According to PwC, SCF is a "set of financial solutions available to buyers for financing specific goods and products as they move from origin to destination along the supply chain." SCF simplifies the process for buyers, suppliers, and financial institutions by "improv[ing] financing terms that they would otherwise not have access to."
Traditional supply chain financial transactions involve dollar-for-dollar agreements to ship using standard lines of credit and loans from banks and other financial institutions. The critical difference in SCF is that the buyer of the goods facilitates the financing, typically using their own "open trade accounts" to allow a consistent flow of financial options between buyers and sellers.
This is especially beneficial in emerging markets. According to ICC Academy, "Open account trade can help to bring customers into competitive markets, and exporters can use one or more appropriate trade finance techniques to mitigate the risk of potential non-payment." SCF developed as more up-and-coming sellers of goods found themselves shut out of new markets by the added risk of wary buyers. The predictability of self-financing the supply chain to minimize disruptions caused by lack of funding appeals to many buyers.
SCF specialists must negotiate with suppliers using the funding available to them. They collaborate with several divisions of a company, including finance, accounting, and program management. SCF specialists also analyze cost, timelines, and technical functions and report these variables to stakeholders.
How do full-time SCF specialists succeed in their careers? Most enter the field with a financial planning background and also some supply chain finance experience. Master's in Business Administration (MBA) are common requirements for higher-level positions.
The complex nature of SCF requires a broad skill set. Here are nine required skills that appear in almost every job posting.
Supply chain finance skills
According to Bankers By Day, SCF specialists offer a "mixture of what a relation manager, credit analyst and trade finance analyst specialist might do." The job entails a wide-ranging mix of disciplines combined into one role. There are nine SCF specialist skills that most have in common. They are:
Budgeting figures daily into an SCF specialist's to-do list. To stay on budget when procuring financing to suppliers before goods are shipped, SCF professionals must understand balance sheets and forecasts. Strong budget management skills are a prerequisite for many SCF specialist jobs. These include subtasks that fall within budgeting, including:
- Business administration
- Cash-flow forecasting
- Contract negotiation
- Finance statements
- Financial planning and analysis (FP&A)
- Organizational skills
- Performance measurement and analysis
- Record keeping principles and practices
You can develop budgeting skills in any financial analyst degree program at the undergraduate or graduate level. Majors in business planning processes and finance services that incorporate courses in mathematics or statistics also provide the necessary training in budgeting to satisfy this skill requirement. Budgeting is also taught in most MBA programs.
This soft skill is essential to SCF specialists. Compellingly communicating the many financial particulars in any given transaction gives communication oversized importance within supply chain finance.
There are also internal reporting elements within the SCF specialist role that require regular communication among stakeholders. Reporting financial transactions, revenue, expenses, and budgeting requires preparing and presenting findings to C-suite level management.
Communication skills are equally essential in working with suppliers. International negotiations require familiarity with the language and the business customs of various populations worldwide. Navigating these through clear communication confers a significant advantage to SCF professionals. Even though English is the default language in most international business transactions, the ability to form trusting relationships with global suppliers requires cross-cultural etiquette in all communications.
Forecasting and modeling/analytics
According to the employment website Indeed, forecasting is "a method of making informed predictions by using historical data as the main input for determining the course of future trends." Global supply chains use forecasting to anticipate future shipping revenues and expenses so they can plan budgets and allocate resources.
Data is the primary source of forecasting metrics. Modern corporations employ financial analysis to spot trends in large data sets to forecast changes. Data modeling takes various scenarios and plays them through to the end to see where organizations can create efficiencies and increase profit.
SCF specialists need forecasting skills to predict product demand and seasonal variations in pricing metrics. Many master's-level programs teach forecasting as part of their curriculum including MBAs. You'll find interlocking skills in computer programming and data science to develop and use forecasting models drawn from big data.
Negotiation takes skill and fortitude. That's why it's considered an essential SCF skill. Negotiation is often combined with soft skills like communication, planning, strategizing, and cooperating to achieve a mutually satisfactory outcome.
SCF is basically a negotiation between the shipper and buyer to finance the delivery of products, so both parties make a profit. SCF specialists need a clear understanding of the players and strong analytical capabilities to assess friction points that can make or break the deal. Strategy rather than tactics often comes out on top in SCF.
Unfortunately, few college programs teach negotiation. It's frequently seen as a sales technique for wheeler-dealer types rather than a targeted and nuanced skill that can make the difference between success and failure. Some MBA programs include negotiations in their curriculum, however.
You can also sharpen your negotiation skills for use in SCF through online or in-person certificate classes or workshops. These programs help in one-on-one and team negotiation techniques and usually have a group role-playing component to practice your newly learned skills.
SCF specialists may find themselves with subordinates working directly under them. Skills in personnel management help lead a finance team to success. You may have other specialists working alongside you with expertise in IT, banking, transportation, or finance to provide added nuance to your daily operations.
Personnel management is taught throughout undergraduate and graduate-level business programs. These skills are coveted by employers so their new hires can lead functional team members and work effectively with colleagues and upper management.
Success in SCF requires a lot more than looking at numbers and plugging them into an algorithm. Critical thinking skills play into every choice and decision a supply chain finance professional makes.
SCF specialists find problems through the process of providing financial solutions for sellers. Shipping services often deal with trade regulations and shipping laws that need to be navigated. Global supply chains break down. Financing from banks can dry up. SCF specialists must be nimble, creative, and constantly thinking one step ahead to anticipate and solve potentially deal-killing challenges.
An SCF specialist not only arranges financial deals but also must sell them. The ability to read stakeholders and determine what they need to close an agreement and then convince them that the deal on the table meets those needs is a critical sales and marketing job.
SCF professionals can develop sales and marketing skills through undergraduate and graduate-level business programs. Supply chain analyst courses often cover sales and marketing as well.
Strategic planning in SCF coincides with supply chain organizations in general. Adding the financial planning elements to the planning needed to schedule shipments of goods requires skill in setting priorities, strengthening operations, and ensuring that employees and other stakeholders are working toward common goals.
Having strategic planning skills is a big plus for those seeking employment as an SCF specialist. Employers look for candidates who can plan and execute strategically rather than just shooting from the hip.
College business programs and MBA programs both offer coursework in strategic planning.
Tracking and organization/record keeping
We all want to know when our package will arrive at our doorstep. The same applies to the supply chain. Knowing when and where product managers are shipping is a crucial competency to the SCF specialist skill set.
SCF specialist candidates will need a basic understanding of supply chain management and logistics to track shipping for their financed clients. They also top organizational skills, including recordkeeping to manage the many customers, projects, contracts, and shipments that are part of an SCF specialist's day-to-day activities.
Do you need a master's in supply chain management?
There's a good deal of separation between supply chain management and supply chain finance. The supply chain itself is a matter of logistics and operations to get goods from point A to point B. SCF specialists deal with financial planning aspects of providing funding and contractual concerns of the supply chain team between buyer and seller.
Those looking for full-time supply chain finance jobs should have years of experience in finance and a thorough understanding of supply chain management. But their focus is on the financial, so advanced degrees in finance, banking, and trade are more relevant to their work.
SCF specialists can enter the field with a bachelor's degree, but advancement typically requires a master's-level education. Some SCF specialists move on to broader careers in banking and finance with their understanding of credit analysis, relationship management, trade finance, and international trade. Others stay and grow within the SCF ranks at either the buyer or seller level. Some become supply chain finance manager. It's a growing and evolving field that can deliver a challenging and rewarding career.
Questions or feedback? Email firstname.lastname@example.org