Content thumbnail Partnering for Performance Part 1

3. Monitoring and enhancing performance Business partner CFOs go beyond monitoring performance to play Chart 13 an important role in defining and driving the behaviors that will Do you agree that you need to do more work to ensure that the support organizational goals . One way they do this is by helping to KPIs and targets set for the supply chain are driving the right behavior? Please indicate whether you agree with the following statements (percentage) (Shows “agreed strongly” and “agreed”) standardize the language, measurement, tools and KPIs across the organization . “CFOs have a unique skill to bring together different parts of the organization that may be at odds with each other 57 or may not have a great mechanism for open communication,” 27 says Mr . Brown, Partner at EY in the US . “They provide a single point of reality and, when you combine that with a more % 0 10 20 30 40 50 60 collaborative relationship, you can start to have transparent, high-value conversations.” Business partnering finance Business partners see room for improvement in setting KPIs and Business partnering supply chain targets to drive the right behaviors in the supply chain, with 57% of those in finance and 27% of those in the supply chain saying that Ensuring that there are consistent definitions for measures, such they need to do more here (see Chart 13). “Technology and the as working capital and tax, across the business is central to driving supply chain are the two main drivers to support the growth of our the desired behaviors . “It’s extremely important that you develop business,” says Philippe Pédone, CFO of Galeries Lafayette . “This consistent definitions for KPIs, so that groups come together and means we need to have the best KPIs in order to be more efficient set those KPIs from a leadership perspective and let them cascade on these two aspects that support the business .” down through the organization,” says Jim Muse, Head of Supply When finance is less involved in the supply chain in a more Chain at Fisher & Paykel Healthcare, a medical devices company . traditional relationship, there is a danger that it will apply targets, The CFO’s neutral position within the supply chain means that in areas such as working capital, that do not take the realities of they can evaluate trade-offs between different targets and give a the function into account . perspective on which course of action will deliver the best overall “You can’t just dictate terms or arbitrarily put working capital benefits. Consider, for example, an initiative to increase service goals in place that aren’t achievable,” says Mr . Hilzinger, CFO of levels or fill rates in the supply chain. Increasing them from, say, USG . “Finance can establish that working capital is important and 95% to 96% would benefit customers, but it would also require ensure that there are consistent definitions in place, along with increasing inventory . “The CFO can add a valuable perspective to objective measures to show whether or not we are achieving our this discussion by evaluating the impact of increased service levels goals. But it is then up to the supply chain to figure out what they on other metrics, such as working capital,” says Sean Ryu, Supply can do to meet those objectives .” Chain Leader for Asia Pacific at EY . 26 Partnering for performance Part 1: the CFO and the supply chain

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