Patrik Zekkar

Making the final preparations with the family before the Eastern, we run out of fuel and needed somewhere to eat. Not a second thought when I saw the well recognized golden M. After first going through a riot in relation to making the food order for the whole family (we are actually five these days..) and then after finalizing my burger in 18 second to cement my lead role in the family, I run into a (typical McDonald) food coma.

However, some issue from work manage to surfaced in my head, it was about the relevance of physical distance to your clients. Take McDonalds, which is a good example as in principal everyone knows it, how long are you prepared to transport yourself to be able to eat at McDonalds? Not very far I guess. If you bump into one, you take it. Which is quite easy since they are in almost every corner (at least in my city) and probably have to be for the same reason.

On the other hand, take a well recognized gourmet restaurant, then we are prepared to travel quite some distance, and have to as it is located in a unique place. So, then I was thinking that maybe there is a correlation between the complexity of food served at a restaurant and the distance you are prepared to travel to get to such restaurant, and this most be possible to put into a mathematical formula in order to find exactly which cover area a restaurant would have.

Now, going into mathematics I returned to reality and poked on my wife’s attention since this is here area of specialty. After explaining my thesis, my wife made it pretty clear that she’s not gone think of any stupid mathematical formula and by the way she said that my thesis in general didn’t work.

She took a parallel towards shopping malls and branded stores. Shopping centers, located in dark suburbs but people are still prepared to travel some distance to buy their groceries, cloths and equipment. On the other hand, branded cloths (Gucci, Marc Jacobs, whatever..) which people should be prepared to travel some distance to buy is in most cities I been to located in prime areas. And NO price is not the balancing parameter as McDonalds is cheap and Gucci is expensive.

I gave up and whent to get myself a coffee and one of this McFlurry ice cream. However, I still wonder if in trade finance (an area I’m still best in my family on) the physical distance between client and bank is put far too much emphasis on than what is relevant?

Sometime, maybe, I get a feeling that being so dedicated so detailed so cautious so….. that we (sometime only) miss out on the bigger picture. What I mean is that the hands-on details (custom regulation, freight details, document wording, etc) surrounding the transaction itself overshadowing the principal management of these trade flows.

In order to take the best practice temper on the corporate markets trade flow management a joint-study was conducted by SEB and gtnews.com (the treasury and finance network) were approximately 2,500 companies was approached with 11 questions to evaluate if corporate´s trade finance strategy adapting to take advantage of the new opportunities?

313 respondents completed the survey, and I will give you a sneak peak of the findings as I above challenged that in principal management of these flow out there in general are not as good as they could be. But first some background. The participants in the survey was corporates from all over the world with a domination (35%) from West Europe and also of all sizes (from 10bn) almost equal distributed.

The survey covered areas from centralized/de-centralized trade finance handling, level of automatic forecasting of trade flows, lead time in document handling and working capital focus overall, were result is measured on both geographical and by size of company basis.

So, then finally to the sneak peak of the findings, and what I can say so far is that there are absolutely no red thread in how companies of different size have decided to manage their trade flows, neither are there any geographical alignment (which at least recognize this is a international business). Overall, I would say that with 50% or more below best practice there are room for improvement of the principal management of the trade flows.

In next blogg I will in more detail elaborate in the finding on some of the areas the survey covered.

Trade people are sometime relatively easy to spot. What I mean is that there are certain pre-requisites which seem to be binding, these issues can be described with that trade people seems to have the motto; “The devil is in the detail…”

A well tried example to identify trade people is when giving information not refer to the source or (as might be the case in this text…) have spelling errors, as these things will not be passed unattended. Another, hopefully not accurate incident, I did experience when listening to a retirement speech for a non-trade profile in the industry sector when the speaker made the joke about “the similarity between a man and a open-ended bon?” and we were only two people laughing to the reply “ …. non of them mature.” The other guy laughing was working in the Trade department in an international bank.