CFOs who establish strong communication with the supply chain experience better results for their company, according to an international survey of the world’s leading CFOs. The study finds that aside from a positive impact on revenues, perhaps the largest contribution the CFO made was enabling the collaborative and business partnering opportunity between supply chain leaders and internal departments within the company.
As both business partners focus on growth, CFOs can control risk via the supply chain itself. For instance, finance professionals now have unprecedented insight to the impact that promotions and special offers have on the bottom line. With insight into the supply chain, the impact of limited-time offers and other specials can be balanced against expected losses, thereby providing customer satisfaction while keeping the company strong. Aside from controlling risk, CFOs can also improve cash flow and integrate new ideas via the supply chain.
Supply chain planning enables enterprise performance prediction with accurate analytics. With this data, CFOs can gain insight into statistics such as projected revenue, estimated costs, and other pertinent information. This allows the finance team to analyze gross-margins and how promotions plans can be protected from underpriced retail inventory. Furthermore, access to even more data gives CFOs the opportunity to provide guidance to not only stakeholders, but the company board as well.
Profit Boost Linked to CFO-Supply Chain Relationship
“Although a company’s financial performance will inevitably be determined by a multitude of factors, a strong business partnering relationship between the CFO and the supply chain leader is definitely a contributing factor,” says Andrew Caveney, an international supply chain expert.
Many companies are beginning to sense the power of the collaboration, and are taking advantage of its benefits. Key opportunities to partnering for performance include:
- Consistency. Insight into the supply chain allows the CFO to ensure that the business and corporate strategy is consistent internally and with the supply chain. Consistency is critical to the broader strategy and sturdiness of any business plan.
- Supporting investment decisions. Key insight into the supply chain ensures that the CFO has the data needed to support – or challenge – investment choices. This insight allows the company to remain agile in an increasingly tumultuous market.
- Monitoring performance. Throughout keeping track of key stats, CFOs can ensure that performance indicators are meeting expectations and make adjustments where necessary.
- Managing risk. Above all, the greatest benefit of this partnership is the ability to manage risk and minimize unnecessary fall-out. Direct, secondary, and tertiary suppliers now give the CFO long-term strategic vision and wisdom.