Supply Chain Management and Business Credit Risk

“I’ll have the usual”

As a frequent visitor of South Street Diner, Boston’s historic 24 hour greasy spoon, I had the pleasure of calling for “the usual” and diving into an omelette just minutes later.

Breakfast after breakfast, “the usual” was ordered and happily consumed. It became my default behavior. I was hooked.

After an apartment change and a six month South Street hiatus, I returned to the diner to find a new chef and tweaked menu behind the same friendly waitstaff. The usual order (she remembered!) was met with runny eggs, a bigger bill, and a search for a new breakfast spot.

Quality changes, prices move and customers update.

“Same as last week?”

Small businesses today rarely have enough time to measure the quality and cost of their many product inputs. Even more rarely do they find time for a nice breakfast. Yet, without keeping a keen watch over their vendors, and how the market is responding, businesses run a real risk of losing clients. Responsible management of the supply chain has a major impact on future happy customers.

What is the supply chain? Though Websters defines it as an utterance used to signal relevance, we know it as a network of human-made transactions. We have discovered, much to our delight, that emotion beats out rationality in most of these decisions.

Retailer interviews confirmed our sneaking suspicion that ordering the “same as last week” is a great substitute for inventory optimization. The sales and delivery team have families, bring donuts, and offer banter on last night’s game. Why adjust one’s ordering pattern and risk losing insight on the MLB lockout?

Laziness means risk

Customer demand changes. Reordering solely from last week’s sales can leave cash tied up in slower-moving inventory. Review sell-through, stock levels and upcoming demand before replenishing.

Daylit’s original discussion of a Vigilance Score connected purchasing behavior with credit assessment. The underlying model and training dataset are not published here; this article should not be used as a description of current underwriting criteria.

Future free cash flow, or cash generated net of goods and expenses, is directly impacted by laziness in the supply chain. Less vigilance and slower inventory turn negatively affects cash flow and makes it harder for borrowers to pay back their debt on time.

When we can separate lazy and vigilant operators, we can optimally price the risk of each financing – especially every invoice financed using Daylit’s PayLater.

And, of course, better risk pricing means better rates for our customers!

For a more detailed explanation on the Vigilance Score and some other behavioral indicators (Helter Skelter Score, Generosity Score, Diligence Score, etc.), click here to schedule a call.

‍

References

EY: Cash forecasting. Read September 28, 2026.