Globalization today is less of a question and more of a given for the vast majority of companies. Whether you’re dealing with suppliers overseas or shipping parts across the globe, your company’s supply chain grows more and more complex each day. This is certainly strong motivation for CFOs and senior finance executives to find new strategies, technologies, and tools to help them gain additional visibility into a risky situation.
Yet, many companies today continue to think of this complex operation as a way to save or make more money. This outdated mentality can actually cost your company in the end, as other firms find themselves using their supply chain as a strategic tool. Of course, keeping a close eye on suppliers—and their suppliers, too—by auditing their practices is a crucial (and expensive) proposition. But better understanding and communication with suppliers offers the opportunity to work more closely for common success.
Regulations also continue to become more complex, with a fast-expanding roster of international, federal, and state laws affecting supply chains. The cost of faulty compliance with such edicts, include enforcement actions with monetary penalties, reputational damage causing the loss of customers, and class-action lawsuits from plaintiffs on the lookout for unfair business practices.
Finally, many CFOs may have simply become complacent with their supply chain management practices. For those who fall into this boat, what seems like business as usual can turn out to be a costly error. Don’t let your oversight turn into overlooking mistakes, violations, or inefficiencies.
A new CFO eBook, that you can download now, explores recent developments in supply chain management, including new risks and opportunities. For the finance function, taking a closer look at supply chain can yield real dividends, particularly through improved visibility and collaboration.
While suppliers can certainly create risk for your company, partnering with them more closely and finding new synergies can give your company a competitive edge. It can also lower the potential threat of penalties, legal consequences, and reputational damage as improved communication can help CFOs to know much earlier what’s happening on the ground.