Last month, the Cortera Supply Chain Index hit its best numbers of the year.
The November 2009 Supply Chain Index (SCI) report measured payment activities of approximately 350,000 businesses, and the results signal the speeding of payments and related cash flow throughout the overall supply chain.
That’s good news, but quite unusual for this time of year. Typically, the speeding of payments doesn’t happen until months after the holiday shopping season.
Coretera says this break from tradition likely supports reports of retailers and suppliers reducing inventories this holiday season with little expectation of replenishing goods once those inventories are exhausted.
Interestingly, the latest data represents the fifth time in the last six months that the Cortera SCI has revealed improving cash flow conditions throughout the supply chain, though the SCI remains 20 percent higher than pre-recession levels of two years ago.
“The speeding of payments is a positive although highly unusual development for this time of year. The latest data suggests a unique balance between the fresh lessons from the past holiday season and cautious optimism to meet conservative sales expectations,” says Jim Swift, president and CEO, Cortera. “This would seemingly support widespread reports of tighter, controlled seasonal inventories this year. The big question now is whether we see an uptick in December caused by optimistic replenishment and higher confidence in additional holiday sales.”
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