The relationship between the chief procurement officer and CFO may become more important, this year and in the long run, he notes. “People have realized that increased collaboration between the CPO and CFO is key in ensuring that companies have a viable supply chain that is resilient and agile.” When sales are hard to come by or slowing, the last thing a business wants to do is fail to meet a customer’s order on-time.
That means more focus on demand planning (the process of forecasting, or predicting, the demand for products to ensure they can be delivered and satisfy customers).
“Organizations that may not have put a priority on this in the past because they were able to rely on inventory buffers. They are now tightening up in terms of identifying all sources of information available — data from inside the business and externally from the supply chain and from customers.”
If finance departments handle this well, we should see shorter days inventory outstanding when the numbers for 2020 come out next year. Then again, finance has a lot to deal with this year. Inventory level worries may wind up on the back burner once again.
