Banks and credit unions have some of the most intricate supply chain systems in the world. The main driver for this is the increased use of sophisticated technology such as ATMs/ITMs, Video Tellers, Recyclers and Kiosks.
Supply chain management (SCM), or inventory management is the process of sourcing materials that a business needs to create a product or service and deliver it to its customers.
As we have mentioned in previous blogs, SCM applications and cloud software are used by almost every other industry today. Banks and credit unions are behind the times regarding supply chain management even though retail products and currency move in a very similar way through the supply chain. The graphic below depicts a box of cereal moving through the retail supply chain compared to currency moving through the financial institution’s supply chain.
The main goal of supply chain management software and consulting is to improve and optimize supply chain performance. For financial institutions, we are specifically talking about the cash supply chain. Timely and accurate cash supply chains for banks and credit unions allow them to order an appropriate amount of cash to meet customer demand. This means proactively buffering cash to expect the unexpected, but it also means not having too much or too little on hand. Efficient cash supply chain systems help both suppliers, such as your money supplier and armored car carrier, and locations like your branches, to ensure they have optimal inventory levels. Optimized management of these systems decreases the cost of producing, shipping, insuring, and storing unused inventory such as cash. In this new era of technology and digital transformation, banks and credit unions need to use all the tools at their disposal to optimize and automate their workflows and run the most cost-effective operational processes.
Automation technologies allow financial institutions to centralize their cash supply chain. Centralization means being able to operate and communicate all the working parts in a more cost-effective and efficient way. By automating the cash supply chain, you are creating significant time savings for your team members. The image below depicts how automation leads to an optimized cash supply chain.
To learn more about automating your cash supply chain, download our “Supply Chain Management 101 for Financial Institutions” e-book.