Americas CFO Hot Topics

The CFO and the supply chain

  • Share

Today’s CFOs command a broad perspective of the entire organization, making collaboration between the CFO and supply chain – and all disciplines – indispensable.

In our latest report, Partnering for performance: The CFO and the supply chain, we surveyed more than 420 CFOs and chief supply chain officers about that collaboration. What we found was that working together leads to stronger profitability, a wider, more detailed view and a better-performing business characterized by:

Higher growth

Almost half (48%) of such companies surveyed report EBITDA increases of more than 5% according to our findings in Partnering for performance: The CFO and the supply chain.

More focused investment decisions

Collaboration and a more synergetic approach leads to deeper understanding, which leads to adept decision-making.

Greater visibility of risk

Combining perspectives and discussing details fosters an understanding of performance barriers across the business.

Strategic alignment

Aligning corporate strategy and operations generates efficiencies otherwise unrealized or under realized.

Supply chain – find out more

EY - Supply chain – find out more

CFOs are driving better business performance through strategic partnerships.[See a transcript of this video]

Seeing more of each other

This level of partnering is still relatively new with 70% of CFOs and 63% of supply chain leaders saying their relationship has become more collaborative over the past three years. But it’s a relationship that’s more pronounced than ever, and with sound and proven reason. Top CFOs are recognizing collaboration as the most efficient method to improve supply chain performance, specifically through improved capital-investment decisions.

By unifying their approach, the CFO and the supply chain and tax officers can build an integrated, cost-effective operating model that is strategically purposeful. This model is critical to developing an adaptive, agile organization that can meet the changing demands of an unpredictable global market. In truth, supply chain missteps can create significant business-performance issues and negatively impact a company’s reputation and bottom line. Missing deliveries, supply shortages, increases in logistics costs – the more the CFOs are in tune with such risks, the more readily they can prepare and address them.

Giving tax its due

The importance of tax – across the board – can never be undervalued. By considering tax when considering the supply chain, CFOs create efficiencies. In fact 26% of business partnering CFOs and 24% of business partnering supply chain executives see improving organizational design to aid tax effectiveness as one of the top three opportunities for the CFO to play a greater role in the supply chain. But by overlooking the keen importance of tax in relationship to the supply chain, they create and amplify risk. Managing and eliminating risk is a key role of the CFO, and the ramifications of supply chain in relationship to tax concerns must be on the radar.

  • The best time to think about tax is at square one. The most tax-efficient supply chains are those that plan for taxes from the outset. But don’t stop at square one – keep considering tax as you consider your supply chain, and vice versa. Changes in the supply chain can generate tax implications – VAT, excise tax, customs duty. Forgoing deeper, more collaborative relationships with the supply chain and tax officers is a leading practice for successful CFOs, because it can impact after-tax profits.

Supply chain – find out more

EY - Supply chain – find out more

To become more strategic, CFOs must cast a critical eye on the global supply chains. [See a transcript of this video]

View our latest resources on supply chain