A recent article in i2’s Supply Chain Leader on linking the CFO to supply chain execution made a great point when it notes that a company needs to have a good understanding of its total costs and sources of value to align business strategy with the supply chain. It made an even better point when it noted that sometimes the best person to help you do this is the CFO, whose skill set is a competitive asset in its own right. After all, who else in the organization is as focused on reducing cash-to-cash cycle times, achieving profitable growth, delivering predictable profit margins, and reducing the company’s risk profile?
So how do you get the CFO on your side? Take some tips from the i2 article and explain to the CFO how good supply management:
- Reduces Cash-to-Cash Cycle Times
Through the perfect orders and accurate purchase orders that result from properly implemented and utilized e-Procurement systems, companies can optimize purchases and eliminate overpayments through the invoice matching capabilities that are built into leading best-of-breed systems.
- Reduces the Company’s Risk Profile
Effectively optimizing total landed cost, despite global supply chain uncertainties, helps in the management of corporate budgets and gross margin erosions. Without good supply management, companies will frequently consider the lower unit costs in choosing global suppliers and fail to consider the uncertainties inherent in global supply chains. Several factors impact the total landed cost, including:
- elevated transportation costs
- longer lead-times that increase in-transit inventory
- lost business due to customs delays or unexpected demand surges
- increased inventory holding costs
- Achieves Profitable Growth
Good supply management systems not only measure and model cost reductions, but also track the KPIs necessary to quantify the impact on revenue.
- Delivers Predictable Revenue
Supply management helps to deliver predictable revenue and profits on a continuous basis as it utilizes systems that maintain accurate future supply and demand information and make it available on a timely basis.