As total cost continues to grow in importance throughout the supply chain, we are noticing an increasingly global supply chain, impacting even Tier 2/Tier 3 suppliers.  Companies are now leveraging the global supply base to lower their material acquisition cost, and where possible, leveraging the ongoing strength of the Canadian dollar to stretch their purchasing power even further.  Doing so, when accompanied by judicious usage of currency hedging strategies, can help improve profitability and stability of cash flow for companies.

 That said, a potential limitation on the ability of a company to leverage global supply chains is their ability to adequately finance their supply chain.  Whenever there is a change in supplier/buyer relationships, payment terms and credit limits must be considered.  EDC has a way to work with Canadian companies to try and lever better terms/limits out of their suppliers.

Disclaimer:

The views expressed here are those of the author, and not necessarily of Export Development Canada

 Les vues exprimées dans ce propos sont celles de l'auteur. Elles ne reflètent pas nécessairement le point de vue d'EDC.