Content thumbnail Partnering for Performance Part 1

A new relationship between finance and the supply chain? The supply chain is a critical driver of both top-line and bottom-line performance. Through a complex web of processes and relationships, effective supply chains allow companies to meet the demand for their product, keep costs to a minimum and maintain a balance between agility and resilience . In recent years, however, it has become increasingly challenging to juggle these priorities . Pressure on margins has become more intense, complexity has grown and the pace of change has continued to increase . This means that the relationship between the supply chain and senior finance leaders has become more important than ever. Today, many supply chain leaders have been elevated to the top echelons of the corporate hierarchy, with a seat on the executive board and significant influence on strategic decision-making. This elevation of the supply chain has coincided with a re-evaluation heads of supply chain, there is strong evidence that relationships of the CFO position. Many finance leaders are moving beyond the between CFOs and heads of supply chain are becoming closer . traditional responsibilities of monitoring, reporting and controlling Among CFOs, 70% say that the relationship has become more to play a more forward-looking and commercial role. This includes collaborative over the past three years, while the proportion working closely with other functional areas as business partners, among supply chain heads is 63% (see Chart 1). supporting their decision-making through insights and financial Chart 1 impact analysis, and helping them to identify and manage risks Over the past three years, what change has there been to the and optimize performance . relationship between the CFO and head of supply chain in your company? (Shows “much more collaborative” and “a little more Chart 1: Over the past three years, what change has there been to the relationship This changed dynamic creates a prime opportunity for CFOs and between the CFO and head of supply chain in your company? (shows much more collaborative” responses) the supply chain to work together to make significant performance collaborative and a little more collaborative) improvements across the entire business . By applying rigorous insight and measurement to supply chain decision-making, 70 CFOs can improve alignment between corporate strategy, sales, marketing and operations . 63 Among many other factors, the company’s executive management 0 10 20 30 40 50 60 % structure will influence the nature of collaboration between the CFO and the supply chain . For example, some CFOs’ contribution Finance to the supply chain may be more through partnership with the Supply chain COOs, when such a role exists, than directly with the head of supply chain . However, in a survey of CFOs and 8 Partnering for performance Part 1: the CFO and the supply chain

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