Logistical challenges faced during the height of the COVID-19 pandemic have prompted business leaders to reassess their roles in supply chain management. Chief Financial Officers (CFOs), in particular, have witnessed a significant expansion in their responsibilities over the past five years, driven by both opportunity and necessity.
Traditionally nested under the operations side of businesses, supply chain management has become more intertwined with the finance function. The disruptions caused by events such as the Suez Canal blockage and pandemic-induced lockdowns have compelled CFOs to play a more prominent role in solving critical business problems, leading organizations to glean valuable, albeit costly, lessons in the process.
Yoana Land, CFO of L’Oreal’s Transformation North America division, attested to the transformative impact of the pandemic on supply chain dynamics. In dealing with the challenges, Land highlighted the inhibiting effect of supply chain issues on meeting consumer demand even before the pandemic. The division, accustomed to agile problem-solving, found itself deprioritized during the toughest periods but resiliently adapted to maintain growth.
A key takeaway from the pandemic, according to Land, is the necessity for a balanced approach, emphasizing the need for CFOs to be prepared for survival mode. This sentiment resonates across industries, as companies faced shortages and disruptions, exposing vulnerabilities in global supply chains.
Maria Villablanca, CEO of the Future Insights Network, emphasized the need for CFOs to factor in risk resilience in supply chain strategies. She urged collaboration, dual sourcing strategies, nearshoring, and onshoring, suggesting that the pandemic highlighted the importance of addressing these concerns for a more sustainable and efficient supply chain.
The challenges revealed during the pandemic also shed light on the limitations of relying solely on cost-reduction measures. Villablanca argued that the focus on sourcing inexpensive products globally created complex, globalized systems that didn't align with overall business perspectives, emphasizing the need for a shift in mindset.
Consulting leaders, such as Tony Caleca from Armanino, highlighted the newfound importance of supply chain transparency. Stakeholders, including consumers, governments, and investors, are increasingly demanding transparency and sustainability in supply chain operations. Caleca recommended that CFOs work collaboratively with the broader C-suite to establish clear and measurable sustainability goals, fostering better relationships with supply chain partners to enhance efficiency, innovation, and collaboration.
The pandemic has ignited conversations about supply chain resilience, prompting CFOs to reevaluate and strengthen their approaches. The lessons learned during this period have not only emphasized the importance of technology and sustainability but have also underscored the critical need for effective communication, collaboration, and a strategic shift in mindset to navigate the complexities of modern supply chain management.
