The CFO How They Can Be A Change Agent in the Supply Chain

Introduction

Managing cash flow, planning the financial outlay, keeping the balance sheet in order, and ensuring all financial compliances are met is a CFO’s core job function. But this is not all that a CFO does.

The CFO is also responsible for identifying opportunities to reduce operating costs without sacrificing the quality of the products and services offered by the company.

Supply chain and transportation are two of the biggest cost centers in an organization. The cost for these functions is measured as a percentage of sales and differs from industry to industry.

However, according to a McKinsey Study, most industries report supply chain and logistics costs in the range of 1.8% to 10%.

When costs remain within the industry parameters, supply chain and logistics are usually given the leeway to make their financial decisions.

The CFO steps in only when the cost rise above the set industry norms or in case any other financial abnormality is noticed.

But is it a good strategy to wait for things to go wrong to ask the CFO to step in?

In all actuality, the supply chain is suffused in every aspect of your business.

As such the supply chain needs to be viewed between all participating companies and suppliers throughout the supply chain, with solutions applied from a holistic approach.

Table of Contents

• The Necessity of CFO Involvement In Supply Chains
• CFOs as Change Agents for Supply Chains
• Conclusion

We have found that working with organizations where CFOs are directly involved has helped turn over a new leaf and make significant cost reductions, positively impacting the supply chain of that organization.