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Confronting the challenges of supply chain management head-on, you, as the CFO, have evolved from a number cruncher to a strategic innovator. The job description is no longer only about understanding debits and credits; it’s about thinking outside the box to build resilience and efficiency. How can you master this juggling act of adapting to digital transformation while also keeping pace with changing consumer expectations? We’ll outline a few tools and strategies for you in this article.
Modern supply chains are complex ecosystems, constantly challenged by global disruptions and evolving demands. That’s why step one for supply chain CFOs should be understanding the role of digital transformation and adapting to changing consumer expectations, including ESG and DEI considerations.
Digital tools and technologies are transforming supply chain efficiency and compliance with enhanced visibility and tools for smarter decision-making. For instance, integrating the Internet of Things (IoT) and advanced robotics has significantly improved performance and customer satisfaction by enabling automation and detailed analysis. Predictive analytics, increasingly accessible to smaller enterprises, allows for anticipating customer demands and optimizing inventory, cutting logistics costs by 15%. Digital Supply Networks (DSNs) have also been crucial, with 90% of companies investing in them in 2022, facilitating a unified and responsive supply chain system. Yet, despite these advancements, a McKinsey study indicates a considerable scope for growth, as the average supply chain digitization level stands at just 43%, the lowest of the five business sectors studied.
Changing consumer expectations profoundly reshape supply chain strategies, particularly regarding ESG and DEI factors. A major shift in consumption patterns shows that over 60% of consumers are willing to pay more for products with sustainable packaging, driven largely by the growing purchasing power of younger generations who equate sustainability with trust. The numbers add context to this shift: products with ESG claims have experienced a 28% cumulative growth over five years, outpacing those without such claims. 78% of U.S. consumers, as per a NielsenIQ study, and 83%, according to a PwC survey, prioritize sustainable lifestyles and expect companies to champion ESG best practices. Moreover, on the DEI front, three-quarters of supply chain organizations now report on diversity, reflecting these changing priorities.
What also influences you as a CFO to think critically is that we live in an era full of labor shortages and global uncertainties. That's why thinking outside the box with innovative financial strategies is imperative to bolster supply chain resilience and efficiency.
As a supply chain CFO, your main objective is to optimize operations and costs. You can achieve this by strategically implementing Supply Chain Management (SCM) software. The key to successful implementation lies in cross-departmental collaboration, involving various stakeholders to ensure the software aligns with strategic goals and daily operational needs. Doing so becomes even more important in the face of labor shortages. The first half of 2023 saw labor disruptions spike by 136%, and as of January 2024, the U.S. faced a gap with 9.5 million job openings but only 6.5 million unemployed workers. In response, consider strategies like domestic self-sufficiency and 'friend shoring' - establishing trade links with like-minded and, most likely, geographically close countries (‘nearshoring’) with a more likely secure supply of goods.
The stark predictions of the Global Risks Report 2024 for the next decade highlight an urgent need for robust risk management strategies, especially for CFOs. The challenge is to steer companies through these uncertainties, a task reflected in Gartner's projection of a 14.3% increase in global security and risk management spending, reaching $215 billion by the end of 2024. However, a harsh reality confronts us: just 6% of companies boast full visibility into their supply chains. This gap underlines your critical role as CFO to enhance supply chain transparency and resilience. Here, leveraging advanced analytics and cloud technology is necessary, especially considering that only 20% of finance teams can forecast only beyond a year and only 4% set aside sufficient time for effective scenario planning.
Now, let's get into the specifics of freight audit and payment best practices, a critical area where CFOs can drive further efficiencies and savings for the bottom line. Here’s how:
We’ve explored many quantifiable tools CFOs can leverage, but the qualitative ones are what tie it together. The magic lies in weaving together two key elements: robust internal collaboration and a focus on nurturing the workforce.
You do a lot more than crunch numbers as a CFO; you’re often the unsung hero in creating a culture of collaboration, breaking down barriers, and getting different departments to rally around shared goals. Deloitte further underscores the importance of employing advanced technologies for efficient supplier data collection. Gathering detailed insights, rather than just data, empowers smarter decision-making and effective risk management and opens doors to innovation and cost-saving opportunities.
Lastly, as highlighted by OSA Commerce, equipping the workforce for future challenges is vital for CFOs. Beyond training, it's about instilling new skills and perspectives to prepare teams for upcoming trends and changes. Fostering a supportive company culture goes hand in hand with skill development, creating a workforce that's not only competent but also loyal and adaptable. However, just as much as this environment is about teaching new techniques, it's equally about cultivating a mindset of continuous learning and flexibility that aligns with a global market changing right before our eyes.
Your role as a supply chain CFO extends far beyond traditional number-crunching. Your job now requires you to wear several hats: innovator, visionary, and leader. Supply chain challenges are as diverse as they are complex. But with these challenges come opportunities to drive efficiency, enhance visibility, and strengthen risk management.
Intelligent Audit's suite of services is designed precisely for this dynamic environment. With offerings like freight audit & recovery, business intelligence & analytics, and real-time visibility, Intelligent Audit provides the tools to meet and exceed the demands of the modern supply chain. Anomaly detection capabilities and finance & accounting tools to streamline carrier payments and claims management are the cherry on top.
Those tools only scratch the surface, though. With Intelligent Audit, you get an entire toolbox of solutions tailor-made for supply chain CFOs. The only way to see for yourself? Get started with Intelligent Audit today.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
