Why CFOs are a vital supply chain link grantthornton.com/valueaddcfo

Do you have a supply chain of

yesteryear?

2

INTRODUCTION

Today’s manufacturing supply chains are:

• Complex, global multi-layered

• Amalgamations of many historical decisions,

some made generations ago

• Often less than ideal mix of vendors and

contracts.

grantthornton.com/valueaddcfo

CFOs eye supply chain to

deliver value

3

INTRODUCTION

• Today’s CFOs need to minimize risks,

control costs, and optimize the efficiency of

their supply chains.

• But, CFOs oversight of supply-chain

management is often limited.

• Greater familiarity with supply chain issues

positions CFO to evaluate supply chain

performance and suggest alternatives.

grantthornton.com/valueaddcfo

4 benefits to a value-added

supply chain

4

INTRODUCTION

grantthornton.com/valueaddcfo

Get greater economic value and better

performance from the supply chain

Understand what your customer demands from

your supply chain

Understand sourcing regulations and customer

requirements

Minimize supply chain risks

How are CFOs optimizing

supply chains to boost the

bottom line?

5

INTRODUCTION

Here's what Grant Thornton LLP's

survey revealed …

grantthornton.com/valueaddcfo

Supply chain management is a

rising on the CFO's agenda

6

INTRODUCTION

• 63% of executives lead, are involved with

or know about their company’s supply

chain strategy.

• 85% of manufacturing executives rate

supply chain management as important

to their companies’ strategic visions.

• Only 29% use business analytics to

identify new suppliers and supply savings.

grantthornton.com/valueaddcfo

The CFO's supply chain objectives

7

Why partner with high-

performing suppliers?

8

INTRODUCTION

• 39% of executives say that suppliers have contributed to their companies’ improvement efforts.

• Businesses with a supplier on-time rate above 50% have a nearly 12% higher customer retention rate than those with lower on-time rates.

• 50% of executives indicate that their companies have reduced supply chain costs over the past five years by more than 5%.

grantthornton.com/valueaddcfo

Rethink your supply chain:

Questions to ask

9

INTRODUCTION

Suppliers Why these vendors?

Do they provide economic value?

How difficult is it to change vendors?

Goods (materials, parts)

Why are these goods sourced from specific vendors?

Do alternative vendors exist that offer greater future value?

Movement of goods

Why was our supply chain designed this way?

Who on our team is responsible for analyzing data and improving processes and the flow of goods?

grantthornton.com/valueaddcfo

What measures should

executives use to evaluate

supply chain performance?

10

INTRODUCTION

grantthornton.com/valueaddcfo

Tip: Don't just look at

the past and present.

Assess current

performance against

potential performance.

• Total acquisition or landed cost,

not per-unit costs

• Quality

• Responsiveness, flexibility, capacity

• On-time delivery

• Potential savings of operational

excellence

Additional supply chain

measures to consider

11

INTRODUCTION

grantthornton.com/valueaddcfo

• Financial health (solvency)

• Knowledge/capabilities/skills

• Responsiveness/flexibility

• Transparency regarding supplier sources

• Relationships (e.g., your customer's preference)

• Tax advantages or disadvantages

• Corporate governance/ethics

• Geopolitical risk

High-quality suppliers can be a

competitive advantage

12

INTRODUCTION

grantthornton.com/valueaddcfo

on potential corporate risks.

• Quality

• Responsiveness, flexibility

and capacity

• On-time delivery

Suppliers with an on-time

rate above 50% help

manufacturers retain

customers.

Key differentiators:

Is your supply chain adding

value – or risk? 5 questions

13

INTRODUCTION

grantthornton.com/valueaddcfo

Can you identify potential supply chain problems before they

impact your company?

Do you have a supply chain “dashboard” to flag

abnormalities?

Have you visited your suppliers?

Do you have criteria by which you grade all suppliers, and

include those criteria in contracts?

Do you conduct rigorous analyses of supply chain costs

(total vs. unit)?

Getting from A to Z

14

INTRODUCTION

grantthornton.com/valueaddcfo

• Put forward a long-term, data-driven strategic

supply chain vision.

• Mitigate supply chain risk areas.

• Use data to address suppliers and supply chain

issues with greatest impact.

• Transition to a long-term strategic vision. Retain

vendors that are in line with your vision. Eliminate

those that are not.

How comprehensive is your supply

chain strategy?

Find out more about how CFOs are

delivering value at

grantthornton.com/valueaddcfo

15

Jeff French

Leader, Manufacturing Practice

Grant Thornton LLP

T +1 920 968 6710 E jeff.french@us.gt.com

@jfrenchgt