Article submitted by Julie Teigland, CFO Program Leader & EMEIA Executive Board Member, EY.


As firms look to juggle the pressure on margins, growing business complexity and an increased pace of change, the supply-chain has come into greater focus. Seen as the critical driver of both top-line and bottom-line performance, there is increased recognition that effective supply chains allow companies to meet the demand for their product, keep costs to a minimum and maintain a balance between agility and resilience.

We recently took a temperature check of the relationship between the supply chain and the CFO in our Partnering for Performance series, and we found that 70% of CFOs said that their relationship with supply chain leaders has become more collaborative over the past three years, while the proportion among supply chain heads is 63%. CFOs tell us that rising external costs is the reason behind the need for a closer relationship, while supply chain heads say that the most influential factor for the closer relationship is the globalization of the supply chain.

Whatever the reason for these closer relationships is, our research shows that these partnerships are clearly having an impact. Companies with evidence of strong business partnering between the CFO and the supply chain leaders report better results than those with a traditional finance model in place. These firms are more likely to report closer alignment between finance and the supply chain functions, and a mutual understanding of key risks and opportunities.

Business partnering models have a stronger association with growth. Among business partner respondents, 48% report earnings before interest, taxes, depreciation and amortization (EBITDA) growth increases of more than 5% in their company over the past year, compared with just 22% of those with a more traditional relationship.

With findings like these it comes as no surprise that many supply chain leaders have been elevated to the top echelons of the corporate hierarchy, with a seat on the executive board and significant influence on strategic decision-making. The result of this convergence is that CFOs and supply chain leaders are working increasingly together to understand, analyze and address supply chain issues.

In companies where a business partnering model is established, many CFOs have started to align the finance organization with the supply chain to make sure that finance is at the heart of the supply chain discussion. CFOs and supply chain leaders are creating alignment between strategy, finance, tax and operations, unlocking hidden value within the organization and strengthening financial performance.

For those companies looking to foster this better working relationship, here are ten steps based on our research to take the pulse of the CFO and supply chain relationship in your organization and help you put this crucial relationship on more collaborative footing to drive higher performance: