5 Steps to Delivering Supply Chain Success with Chief Financial Officer Involvement

Enabling Change In The Efficiency Era

We are living in a time of efficiency. We all want to optimize, to do more with less, to maximize return while minimizing effort.

It makes perfect sense – there is not an industry on earth that has escaped the effects of digital disruptions.

For those encumbered by legacy operations and established processes, competing with these disruptions can be challenging.

The nature of competition has fundamentally changed.

So, established companies look for ways to respond and defend themselves.

At the heart of this drive is the need to have greater transparency, to be able to see all the moving parts. Ultimately, it is impossible to make changes without knowing what you have to change in the first place.

For any sort of organization, this can be challenging - every company is made up of different functions and departments, all with their own ways of working, their own unofficial workarounds. When you are a business involved in the production or sale of a tangible product, you have the added complexity of a supply chain to contend with.

The mistake many companies make is to consider their supply chain purely a logistics function. It is so much more than that - it is, in effect, your entire business. So, if you can have visibility of every part of that process, if you can understand what works and what doesn’t, then you will be more confident in your ability to make impactful decisions. Who wouldn’t want that?

The question then becomes, who is best placed to action this change?

It requires a skill set that draws on finance, data, and analytics, that is comfortable with reviewing the sort of information held within supply chains, identifying patterns, and understanding what it means. A broad view of the entire business, its overall goals, and strategy is also a necessity.

It is a complex mix; one which few within a business will have.

That strategic overview, that experience with finance and data - all fingers point to the Chief Financial Officer. Indeed, organizations that can enable collaboration between CFOs and supply chain leaders are more likely to see tangible business benefits.

One study said that 48% of respondents following that approach reported earnings before interest, taxes, depreciation, and amortization (EBITDA) growth increases of more than 5% in their company over the past year, compared with just 22% of those with a more traditional relationship.

From a personnel perspective, being more strategic will have a hugely beneficial impact on CFO careers. In some instances, leading to the top.

Yet it is not as straightforward as simply drafting in the CFO and telling them to make the supply chain more efficient. By taking on this role, CFOs are becoming change agents, but in doing so, they need to be open to change themselves.

It’s something I’ve experienced first-hand. As CFO of a grain company, I was part of the transformative effects of closer relationships between finance and our supply chain.

Historically, the latter had been very good at buying, moving, processing, and delivering the finished grain product to the customer. It was less accomplished at understanding some of the subtle, but costly, financial implications of their actions.

By working more closely together, not only were we able to identify opportunities to work more efficiently and maximize opportunities, but it improved the company’s bottom line by millions of dollars.

The white paper “CFO & Supply Chain Success: Five Steps To Delivering Supply Chain Success with CFO Involvement” explores exactly what CFOs can bring to help supply chains operate effectively, and why they themselves need to change. It also considers how the context in which the CFO operates plays a significant role, and it details the steps to supply chain success.

At a time when we are all looking for new ways to optimize our operations, there is immense potential in bringing together CFOs and supply chains. Forward-thinking companies need their CFOs to have that strategic vision. Those that take this step will reap significant rewards.

Article Introduction by CFO.University

CFO Talk: Learning from Crisis. Building a Robust Supply Chain with Dileep Kulkarni

Dileep Kulkarni and CFO.University

Dileep Kulkarni, a supply chain expert with a finance background joined us for the second time on CFO Talk. A few months ago Dileep shared his thoughts on How the Manage Your Supply Chain During a Crisis In this Talk he shares his perspective on how finance leaders can help Build a Robust Supply Chain as we exit a crisis. He defines the “critical supply chain”, what you should expect of your suppliers and how to evaluate supplier risk.

In the video below, Dileep and Steve Rosvold, Chief Learning Officer at CFO.University, make reference to some resources you can learn more about here:

• Four assessments to evaluate the effectiveness of your supply chain Assessing Your Supply Chain
• Here is a link to our supply chain risk assessment tool: Supply Chain Risk Assessment Tool
• Contact Dileep for a deeper discussion on how you can improve your supply chain: Dileep Kulkarni
• For more insight on post-crisis planning: CFO - Post Crisis Planning

Related Resource

CFO & Supply Chain Success: Five Steps To Delivering Supply Chain Success with CFO Involvement
This paper explores exactly what CFOs can bring to help supply chains operate effectively, and why they themselves need to change, it also considers how the context in which the CFO operates plays a significant role, and it details the steps to supply chain success. Download Now!

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The CFO How They Can Be A Change Agent in the Supply Chain
In this white paper, we detail how the CFO has become a crucial decision-maker on the direction and capabilities of a business's supply chain. Download Now!

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