Executive Briefing

SCF in Italy: Insights from the SCF Observatory conference

Report by the Supply Chain Finance Observatory, Politecnico di Milano School of Management

The Politecnico di Milano School of Management main conference hall was completely full on Thursday, March 23rd, when the final event of the fourth edition of the Supply Chain Finance Observatory took place. The Observatory (www.osservatori.net) is the leading research initiative on SCF in Italy, and works in close collaboration with the Supply Chain Finance Community. Around 450 attendees were present, ranging from corporate executives, bank and ICT providers’ representatives and leading consultants and researchers in the field.

The Observatory Scientific Committee opened the event with a welcome from Prof Alessandro Perego, head of the School of Management; Prof Stefano Ronchi gave an introduction to SCF followed by a reflection about the role of the banking system by Prof Marco Giorgino. The agenda was rich and alternated research insights from the Observatory, corporate presentations of SCF implementation success stories and thematic round tables with partners and sponsors.

Prof Federico Caniato, director of the SCF Observatory, captured audience attention by presenting key numbers about the Italian SCF market. In 2015 (the most recent data available), the cumulative net operating working capital of 1.16 million Italian companies was €620bn (€559bn of receivables, €582bn of inventories and €521bn of payables). This translates into high values in the cash conversion cycle measured in days (DSO=78 days; DIO=80 days; DPO=137 days), far exceeding the European average. Assuming the receivables outstanding as a proxy of the potential SCF market, the following picture presents the potential vs served market in Italy, revealing the attractiveness of the Italian market potential for SCF compared with European benchmarks.