The Strategic Finance article The CFO as Supply Chain Manager notes, “Recent supply chain disruptions have impacted both the top line and the bottom line” and that “such vulnerabilities have placed a spotlight on the CFO to help navigate these challenges with actionable solutions.” The authors further observe that “the need for the CFO to work as a collaborative business partner is even more urgent in a disrupted supply chain as operational managers need data to drive deeper insight and support decision making.”


Many global supply chains, due to the lingering impact of COVID-19, energy crises, the war in Ukraine, and other disruptions, are indeed on the verge of breaking (if they aren’t broken already). And these challenges are likely to continue well into the foreseeable future. In this ominous environment, what is the role of the CFO and the management accounting and finance team? On what should you focus to help your organization effectively face current—and prepare for future—supply chain challenges?


Having spent many years at a Fortune 500 consumer goods company—including my last role at Campbell Soup Company as the finance executive for our largest supply chain operation, accounting for approximately 20% of the company’s global sales at the time—I believe the CFO’s team is ideally positioned to support cross-functional supply chain partners.


Leveraging our strategic agility, general business acumen, risk management, technical and analytical skills, and overall leadership ability, as well as our business partnership mentality, curiosity, and drive to deliver results, management accounting and finance professionals are uniquely qualified to tackle today’s supply chain challenges and create opportunities for building a stronger supply chain for tomorrow.


Setting the Stage


The world has undergone a seismic shift during our lifetime, including dramatic changes in the business and operating environments. Markets have steadily globalized. Business models have rapidly evolved, including greater use of internal shared services teams, as well as outsourcing and offshoring of such services to third-party service providers. Manufacturing companies increasingly source raw materials and assemble products from multiple locations. At the same time, they’re tightly managing inventories to minimize carrying costs. Even small and midsize enterprises (SMEs) can gain a global presence by leveraging new technologies and cheaper, faster logistics.


This globalization trend was unstoppable until 2020, when the global supply chain was severely tested by the pandemic. Ever since, we’ve been facing unprecedented business disruption and uncertainty, including COVID-19 lockdowns, energy shortfalls, geopolitical tensions, armed conflicts, soaring inflation, and, more recently, increasing interest rates, bank failures, and threats of recession. Disruption has impacted every link in the supply chain, from parts and labor shortages, factory shutdowns, port congestion, and increasing delivery delays and costs to trade conflicts, tariffs, and extreme weather events.


These challenges are, unfortunately, still unfolding. In the years ahead, when the dust finally settles, we’re likely to see a very different world with a very different global supply chain. As such, companies will change their approach to globalization. For example, many manufacturers will strive to diminish supplier dependence and supply risk by diversifying their sourcing, bringing production back onshore, and/or moving it to other, more dependable offshore locations. And to the extent that countries continue to increase their import tax rates and duties, impacting the total cost of ownership of goods, business owners will be forced to rethink their supply chain network.


Supply Chain Management


Supply chain leaders, including CFOs and their teams, are accountable for organizing and overseeing their company’s supply chain. For a global manufacturer, this encompasses the end-to-end process of acquiring raw materials, manufacturing products, and distributing these goods to customers. Supply chains—from procurement, vendor oversight, and inventory management to coordination of freight companies and distributors—are complex.


To anticipate and proactively address issues and to manage customer expectations, especially when facing gaps, supply chain leaders need transparency into each step of the supply chain. Proactively and creatively overcoming challenges is a business imperative. To strengthen your supply chain, carefully analyze it end to end, identifying potential weaknesses and looking for opportunities (see “Supply Chain Analysis” for examples).


Supply Chain Analysis

  • Demand planning. Can you project future customer demand, then leverage these projections to prioritize and customize your company’s delivery of these products or services? Engage key customers in joint demand planning sessions to develop directional long-term forecasts and more precise short-term production requirements.
  • Sourcing materials. Do you understand the impact on production if a supplier can’t deliver key materials, especially those used in top-performing products? Carefully assess all critical suppliers to ensure they have scale, identifying alternatives where needed. Then build and strengthen relationships with these suppliers, increasing the probability you’ll receive preference if there’s a disruption.
  • Manufacturing downtime. Can you meet demand if certain production facilities aren’t operating or are operating below full capacity? Implement preventive maintenance programs and proactively monitor equipment health to minimize unplanned downtime. In addition, identify potential co-manufacturing partners, whether internal or third party, as backup.
  • Inventory management. Do you have complete visibility into your inventory, including raw materials and finished products, to facilitate making informed decisions? Ensure operational discipline in reporting materials usage and daily production, and consider implementing a cycle count program to augment or replace the traditional wall-to-wall physical inventory.
  • Freight and distribution. Do you have a reliable network of freight companies and distributors to ensure raw materials are received and customer shipments are delivered on time? Analyze pallet configuration, truck weights, and trucking lanes to optimize cost. Assess your shipping network to ensure freight and distribution partners are providing reliable, timely, and cost-effective services. And discuss risks with your insurance broker to ensure appropriate coverage is in place to mitigate them.
  • The day-to-day. Are there opportunities to run the operation more efficiently and/or effectively? Adopt a continuous improvement mindset, proactively identifying cost reduction opportunities, improving culture, managing risk, and otherwise enhancing business sustainability.


Stories from the Trenches


The following are just a few stories “from the trenches” of how CFOs and their teams can effectively partner with their cross-functional colleagues in supply chain management to mitigate disruption and build stronger operations: 


Inventory management. For a food and beverage manufacturer, having the right inventory at the right place at the right time is critical. To keep production lines running, you need to have all the required ingredients and packaging materials available for the scheduled item to run. If you’re missing or run short of just one ingredient (a spice, for example), production will stop. Or, if you experience equipment failure and there are no on-site spare parts to fix the problem, you may face significant downtime or loss. Likewise, if you reject a large order with same-day shipment because your inventory system inaccurately showed no in-hand stock, you’ll lose the sale and may alienate the customer. 


Thus, tightly managing inventory, whether it’s raw materials, finished product, or storeroom parts, is a business imperative. But doing so efficiently and effectively can be challenging. Imagine you store nearly 10 million cases of finished product across hundreds of product codes in your on-site warehouse. Historically, you conducted annual wall-to-wall physical inventories to verify inventory counts. To conduct this inventory required approximately 150 cross-functional associates working over a long weekend. After the annual physical, the inventory system reflected accurate counts, but this accuracy invariably deteriorated over the next 364 days. Then, when the site began using SAP software for its enterprise resource planning needs and managing inventory at the lot level, conducting wall-to-wall inventories became totally infeasible.


To address this challenge, the finance inventory control team recommended implementation of a new cycle count program whereby each raw material, finished product, and spare part item was counted at least quarterly. Leveraging its inventory control expertise and knowledge of SAP, the team defined the cycle count procedures, developed SAP reporting, and trained the operations teams on how to implement the cycle count program.


Then, on a quarterly basis, the finance inventory control team audited the cycle count documentation prepared by the operations teams and conducted test counts. The team formally documented its quarterly reviews, including recommendations for continuous improvement, which proved invaluable over the first year. Effective inventory management via cycle counting enabled the site to consistently deliver a high level of customer service, which kept customers smiling.


Materials sourcing. As noted previously, a food manufacturer must have the right ingredients and packaging materials at the right place and time. The complexity of manufacturing several hundred different soup, sauce, and beverage products, each with unique formulas and packaging requirements, can’t be overstated. The following are two examples with creative solutions enabled by the finance team.


1. At Campbell Soup, some of our products used watercress, a delicate leafy vegetable that grows best in shady areas like water gardens and stream banks. We sourced beets, carrots, celery, lettuce, spinach, and other vegetables, including watercress, from local farmers. Due to the challenges of growing, harvesting, and transporting fresh watercress, the number of farmers locally offering it over the years dwindled to one.


Even that one farmer started having second thoughts, indeed contacting us just before planting time to say he wouldn’t be offering watercress during the upcoming season. Through negotiation, the farmer agreed to produce watercress for one more season, giving us the opportunity to meet current year demand and identify new sources for this key but elusive ingredient for the future.


2. Over the years, many beverage manufacturers have replaced traditionally glass bottles with plastic ones. Many plastic bottles are produced in a two-step process, whereby a preform is injection-molded and then this preform is blow-molded into the final bottle.


The plastic bottles are then shipped to the beverage manufacturer where they’re filled, packaged, and shipped to retailers for sale to the ultimate consumer. Because blow-molded bottles are so light, manufacturers are essentially paying to transport air. At one point, our bottle partner noted they needed to invest in additional blow-molding capacity to meet our steadily increasing demand for plastic bottles. We negotiated with the company to place its new equipment on-site at our beverage facility.


Specifically, we built an addition to the beverage facility so that the bottle partner could increase its blow-molding capacity by placing its new equipment in it. Once the addition was in place, our bottle partner could ship preforms (vs. blown bottles) to our site and blow the bottles based on our demand (aka Just-in-Time), with the bottles traveling along a conveyor belt from our bottling partner’s building to our beverage lines as needed. We justified both parties’ investments by analyzing the savings of shipping preforms vs. bottles (essentially air) relative to the cost of building an on-site facility for them.


Business transformation. Business transformation is all about trying to change the way you do business, whether globally, enterprise-wide, or on a more limited scale, such as within a specific team, function, or location. Unfortunately, though, a high percentage of transformations fail. Management accounting and finance professionals, leveraging our project management skills, general business acumen, and attention to detail, can make all the difference in enabling success.


Implementing SAP enterprise wide, including the retirement of hundreds of legacy systems, can be daunting. During my time at Campbell Soup, the corporate strategy was to implement SAP at our sister operations first, knowing we could provide manufacturing and distribution support as needed if there were glitches, and then leverage lessons learned to ensure our SAP transition was smooth (i.e., being the largest operation and offering several unique products, no other site could effectively and fully back us up). That said, the corporate SAP project team had a standard formula on when and how to engage a given operation in advance of its proposed go-live date, so it initially pushed back when we requested to start our prework much earlier than the team’s proposed timeline. But after providing the team with analysis and insight showing that our operation truly was unique and that we couldn’t afford a glitch, the team agreed to our revised timeline. In the end, our site’s SAP transition was completely uneventful, and we were recognized accordingly.


Another corporate initiative was to transform supply chain finance by outsourcing and offshoring routine roles and responsibilities. The call came on a Monday morning. Our site would be the pilot, the initiative would be publicly announced in two weeks, on-site transfer of knowledge to the third-party provider would begin in three weeks, and go-live would be in six months.


By carefully analyzing and clarifying the initiative’s scope, we gained alignment that the originally expected reduction in head count was too high. By identifying potential risks during the planning phase, we were able to mitigate them as appropriate. By clearly defining the processes to be transitioned and specifying that these were to be captured in desktop procedure documents and approved by the existing team during the on-site knowledge transfer phase, we ensured a timely and successful go-live. Indeed, much more quickly than anticipated, the transition moved into a successful, steady “future state,” and the local team began focusing on providing decision support and otherwise supporting its cross-functional business partners.


Sustainability. When I was the finance executive for Campbell’s premier operation in Northwest Ohio, our site was named Food Processing magazine’s 2014 Green Plant of the Year. This recognition underscored our success in implementing sustainable manufacturing practices. Our goal, though, wasn’t sustainability at any cost, but rather to manufacture high-quality products at the lowest possible cost. Thus, we scrutinized every investment proposal, whether sustainability-related or not, to ensure the reasonability of underlying assumptions and the acceptability of the anticipated return on investment.


During our journey, we considered several high-profile investments, including a solar field, a wind farm, and a biogas facility. In the end, we partnered with a third party that built a 24,000-panel solar array on 60 acres adjacent to Campbell’s operations. Based on estimates at the time, this solar array would reduce the site’s electricity costs by $4 million and eliminate 250,000 metric tons of greenhouse gas over the 20-year agreement period. In addition, we prioritized identifying and addressing old, inefficient, and environmentally unfriendly equipment. For example, we gained corporate alignment to retire the site’s coal- and oil-fired boilers (historically a competitive advantage relative to other operations in the network), replacing them with natural gas boilers after analyzing the likely investment required to upgrade and maintain them.


Although high-profile investments generate buzz, smaller investments and process changes, collectively, may represent a greater opportunity to increase an organization’s sustainability. For example, we replaced fluorescent light fixtures with more efficient LED lighting products, including motion-activated lighting where appropriate. We converted to high-efficiency motors with variable-frequency drive technology, invested in preventive maintenance programs to improve equipment reliability, incentivized solid waste recycling, and invested in water recycling technology. And we leveraged stock-keeping unit rationalization to reduce warehousing costs, packaging costs, and inventory obsolescence. In short, we sought out the low-hanging fruit.


Over the years, the drumbeat for change has been growing louder and more urgent. Management accounting and finance professionals, by embracing and prioritizing sustainability initiatives, can create economic value for their organization. That is, investment in sustainability can be an investment in the bottom line.


Risk management. Some argue that only the most clairvoyant supply chain risk management professionals would have considered a virus outbreak in their assessment. Here’s the story of one such team.


Each year, the executive leadership team of a large food and beverage supply chain operation conducted a tabletop exercise to ensure each cross-functional partner understood their role regarding crisis management and business continuity. During a typical tabletop exercise, the cross-functional team received limited information about an issue, discussed and aligned on appropriate actions, and then, in an iterative process, received additional information and refined its plan accordingly.


As a follow-up to the exercise, our team formalized a business continuity plan for the given scenario. Each year, the team faced a different challenge, including a workforce strike, a massive fire at the plant, and, in 2017, an avian flu outbreak threatening to shut down operations during the height of busy season. Although none of the tabletop exercises specifically considered a global pandemic, the lessons learned during the 2017 avian flu exercise proved invaluable when COVID-19 struck in 2020.


Earning your seat. Leveraging the ability to think strategically, analyze complex business issues, and solve problems, along with access to organizational performance data and insights regarding key drivers underlying the business, CFOs and their teams are ideally suited to support their partners in supply chain management. But to drive and make strategic decisions, you need to be “at the table” every day, and, to be at the table, you need to “earn your seat.”


Soon after arriving at Campbell’s largest supply chain operation, the plant manager decided to implement daily direction setting (DDS) teams to engage and support the various production teams more effectively. The Sauce DDS Team, for example, consisted of representatives from Sauce production, maintenance, procurement, quality assurance, and industrial engineering. The typical agenda was to discuss safety, quality, and production trends along with any specific issues or concerns, then define follow-up action items and assign accountability and timing accordingly. Joining this DDS team was a great opportunity to hear firsthand the team’s challenges and the resources needed to overcome them, enabling more timely and effective budget allocation. Ultimately, once the plant manager saw the benefits of having finance at the table, we agreed to assign a finance associate to each of the DDS teams.      


Call to Action


CFOs and their teams are ideally suited to overcome challenges that impact demand planning, materials sourcing, inventory management, and distribution; lead risk management; champion business transformation; and achieve sustainability goals. By effectively partnering with cross-functional colleagues in supply chain management, you can manage disruption and build stronger operations.


Finance Professionals’ Perspective on Supply Chains

Establish shared challenges and future vision that support the purpose of the entity and align to the strategic objectives in delivering products and services to the customer in an effective and efficient manner.


Provide relevant, accurate, and informed advice to support decision making, including understanding the cost base and cost to serve, thereby strengthening the relationship between supply chains and finance.



Change planning, budgeting, and forecasting horizons in response to the evolving nature of the entity and the environment in which it operates, accepting that traditional cycles may no longer apply.



Work together to ensure that technology and data developments address collective requirements. Appreciating the importance of predictive analytics and ensuring that the relevant data is available; understand how digital supply chains are making business models evolve.



Recognize the importance of the environmental, social, and governance (ESG) agenda, ethical supply chains, and nonfinancial reporting, especially as regards suppliers across the supply chain network relationships and how these can be understood.



Prepare the entity to weather the next round of disruption and ensure that the modeling capabilities are available to allow understanding of the opportunities that appear.



Recognize that collaboration is key–respecting the differences, maximizing the commonality; approaching with a project-centric and collaborative mindset.



End-to-end visibility is key across supply chains as entities look to enact strategies that will drive sustainability goals. Understanding the full nature of supply chains is essential in this.



Use the ethical lens in common to assess the challenges in supply chains and the behaviors of entities, especially as these lead to regulatory challenges.



Jointly engage in risk management and supplier due diligence activities as the challenges continue to evolve.


Source: Association of Chartered Certified Accountants, IMA® (Institute of Management Accountants), and Chartered Institute of Procurement & Supply, Supply Chains: A Finance Professional’s Perspective, March 2022.

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