Content thumbnail Partnering for Performance Part 1

As an objective broker between different functional areas of Better integration between the commercial and operations teams the business, the CFO has an important role to play in building also means that objectives can be aligned more closely . “If you stronger bridges. Consider the relationship between R&D and have accountability and management in one place, then you can manufacturing as a case in point . “For a long time, manufacturing also drive one P&L and one set of numbers,” says Mr. Dingemans, has not had a voice in defining a new product, and it’s always been CFO at GlaxoSmithKline. “That can be very effective in making the assumed that it will simply be able to translate ideas from R&D into commercial business more responsive and more understanding of products,” says Stan Brown, a Partner at EY in the US . “But by the consequences of their actions .” giving manufacturing a voice, you can enable decisions that affect A partnership between finance and key functions within the the efficiency with which products are made, creating equal or supply chain, such as procurement, helps to ensure that the right greater consumer benefit at a reduced cost point. CFOs can play objectives are being met . “Procurement reports into the CFO, an active role in creating an internal structure that enables and but we have a dedicated procurement team focused on the global promotes this more collaborative behavior .” supply chain,” explains Mr . Maddaluna . Purchased materials and At the pharmaceuticals company Pfizer, a strong relationship goods represent a significant portion of cost of goods sold, so between the commercial and operational sides of the business they play a key role . Regardless of reporting relationship, the helps to create a careful balance between efficiency and procurement team is integral to our success and the working responsiveness in the supply chain . “The supply chain is a large relationship is seamless . It is a true partnership in terms of what part of the financial structure of the company because we we need to deliver and how we deliver it . Cost is important; are responsible for both product supply and inventory, which however, quality and compliance are essential . Procurement fully represent a significant portion of both the Profit & Loss (P&L) understands this .” statement and the balance sheet,” says Anthony Maddaluna, An effective sales and operations planning (S&OP) process is President of Global Supply at Pfizer . “Our focus is on delivering vital to ensure alignment and minimize debate between different products to satisfy customer demand that meet our exacting functional areas . If the company has too much stock, for example, quality standards at the best cost of goods, and doing so while the CFO and supply chain leader need to understand why — it balancing required product supply and inventory . We strive to may be due to over-forecasting, underselling, change in the ensure we are not consuming excess cash in inventory and, at the market or the wrong price . The S&OP process can help to reveal same time, ensure we have the right inventory in our supply chain the drivers of performance in the supply chain and facilitate a to fulfill orders and drive revenue.“ stronger partnership between finance and the supply chain. Although CFOs have not traditionally been at the heart of S&OP planning, they have the opportunity — through business partnering relationships — to play a more central role . 22 Partnering for performance Part 1: the CFO and the supply chain

Partnering for Performance Part 1 - Page 24 Partnering for Performance Part 1 Page 23 Page 25