The CFO and the Supply Chain: A Tale of Strategic Scrutiny - Part One

In this four-part series we look at why many CFOs understand supply chain excellence to be a critical strategic necessity.

When discussing potential solutions, CFOs ask multiple pointed questions and they want detailed answers. Their fingers are firmly on the pulse of the organization as they monitor the many factors affecting the company’s health. There are multiple factors CFOs look at when determining the best, strategic 3PL partner.

First up is Co-managed LogisticsTM. This flexible approach to third-party logistics (3PL) is favored by those who value data transparency and long-term cost reduction while maintaining a non-invasive approach.

A Co-managed model 3PL begins the solution process by assessing their client's supply chain cost structure while examining their service requirements. This allows the 3PL to present options tailored to the client’s unique business. These forward-thinking 3PLs develop solutions based on LEAN principles. These solutions include removing non-value adding processes, continuous improvement ideas, carrier sourcing and selections and more. They are also able to provide data analysis regularly that pays attention to even minor variances. Most importantly, the client's in-house logistics professionals leverage their internal expertise and minimize risk by having the choice to retain control of their operations.

Why does this matter to a CFO?

As an example, consider a scenario that involves inventory. Generally, inventory levels need to be balanced and precise to keep overhead down while avoiding stock outs or delays that affect customers. Perhaps a CFO wants to reduce inventory to manage costs. Under a traditional 3PL model, the CFO and traffic manager will not have the data from their provider to hit the right balance.

In the same situation using a Co-managed 3PL, the data and reasoning for specific choices are provided to help CFOs and traffic managers hit their desired levels of inventory. When a CFO has the right 3PL partner they are empowered to analyze the data they need in order to get the results they want. A 3PL that can answer multiple, pointed questions with great detail is tailor-made for the CFO.

Watch for Part Two on The CFO and The Supply Chain… CFOs Focus on Cash Management Strategies

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