CFOs Focused on Supply Chain Challenges, Opportunities
It’s been said that 2020 was the year that brought the supply chain fully into the board room, or at least the Zoom version of that room. A recent survey of chief financial officers (CFOs) suggests that trend is likely to continue well into 2021 and beyond.
In fact, CFOs for manufacturers told consulting firm BDO that supply chain stability is the most critical factor to the manufacturing industry’s recovery. This year, BDO predicted, companies’ priorities will shift from crisis management to developing greater supply chain resiliency.
“We are entering into a new era of supply chain management, where manufacturers must balance investments in resiliency and risk management with value creation,” said Eskander Yavar, BDO manufacturing national practice leader and board member of the National Association of Manufacturers. “Success is no longer just moving a product from point A to point B quickly and cheaply; it’s about optimizing every node in the supply chain for greater collective benefit.”
To achieve that ambitious goal, CFOs told BDO that their companies were planning to:
- Invest in supply chain technology (52% of respondents);
- Identify alternative or backup suppliers (50%):
- Conduct a supply chain risk assessment (25%);
- Relocate to another country (24%); and/or
- Reshore to the United States (22%).
The biggest supply chain challenges identified for 2021 were (in descending order of urgency): meeting higher customer priorities; risk management; accurate demand and inventory forecasting, and supplier management (a tie); and cost control.
“Manufacturers went above and beyond in 2020 — not only by keeping American jobs but also by producing essential goods and actively taking part in the fight against COVID-19,” Yavar noted. “2021 will be no less challenging, but resiliency is in manufacturers’ DNA, and they have bold plans for meeting the challenges ahead while capitalizing on new opportunities.”
The full “2021 BDO Manufacturing CFO Outlook Survey” can be found here.