The challenge

Archipelago Rubber Trading Pte Ltd (ART) specialises in rubber trading by purchasing rubber crumbs from factories in Indonesia. ART has been a regular supplier to an international tyre manufacturer, who is also a UOB customer, under its Financial Supply Chain Management (FSCM) programme. UOB finances the suppliers of this tyre manufacturer under its Supplier Finance – Irrevocable Payment Undertaking (SF-IPU) programme.

As the bank continuously upgrades its platform to improve its system capabilities, Archipelago agreed to participate as a SF-IPU spoke for the bank’s new system – Infinity FSCM.

The solution

ART was given training on the new system and during this session, the bank sought feedback from ART in terms of system requirements. In addition, the bank customised the training based on its understanding of the company’s requirements. For example, ART wanted to understand how transaction interest would be charged for every transaction in absolute dollars. This information is crucial for the company’s daily reconciliation. The bank also conducted a system demonstration to ART’s operations team on how to retrieve the interest advice and other system features.

After familiarising ART with the new platform, its banking partner proceeded to work with the tyre manufacturer (ie the buyer) and ART on live submissions. The parties were handheld at each stage of the live submission with any enquiries resolved promptly. In addition, ART was able to retrieve the interest advice for the disbursements on a real-time basis. Notifications were also sent out when the disbursements were completed. Furthermore, ART also commented that the user-interface was easy to manoeuvre and met the company’s expectations.

ART appreciated that the UOB Infinity FSCM platform allows for the viewing of real-time updates on the transactions and financing status. This allows the company to track the entire process from request submission to the disbursement of funds.

Elizabeth Heng, Director says, “The improved visibility has enabled us to better manage our working capital requirement and mitigate risks. Furthermore, UOB Infinity FSCM has also automated the documentation verification process at different stages of the supply chain. This was previously manual and time-consuming. It has been a game-changer to be able to achieve greater transparency in every transaction that we undertake.”

Best practice and innovation

With the official launch of the solution, ART expect to reduce manual processing to a minimum and the company’s experience under the pilot programme has been seamless. As a supplier (ie the spoke), ART can view the entire transaction on a real-time basis from the moment the invoices have been uploaded by the anchor client (ie the buyer). Previously, the client would have to wait for the fax advice to be notified of the interest charged and interest rate for each transaction. With the launch of Infinity FSCM, the client is now able to retrieve it on a real-time basis. Lastly, as a spoke, ART would be able to monitor the facility utilisation and customise any reports as required. Alerts can also be customised and set up to help remind the clients when, for example, certain limit thresholds are reached.

Key benefits

• Process efficiencies.
• Improved visibility.
• Manual intervention reduced.

“The improved visibility has reduced manual intervention and real-time updates. This is crucial for trading companies like ours so that we can quickly seize opportunities and determine our selling price accurately. It also eliminates manual processes eg faxing of the advice as we can retrieve it electronically. We can now see our utilisation updated on a real-time basis. This will significantly improve our planning for internal cash flow. There is also greater transparency on the transaction and financing status,” concludes Heng.