Impact of Supply Chain Operations on Financial Performance (An evidence from 5 big Cement companies in Pakistan)

Abstract

Today’s supply chains have placed greater demand on companies to manage both risk and costs. As supply chain focuses on sourcing of supply, managing supplier relationships and the costs incurred from manufacturing to customer delivery, finance plays a value added role in providing a comprehensive view and support for risks and costs. CFOs are now turning their attention to supply chains, working closer than ever with their supply chain teams to fashion holistic end-to-end processes that aligns goals and benefit the whole business.

Intensive competition in the market place has forced companies to respond more quickly to customer needs through faster product development and shorter delivery time. Increasing customer awareness and preferences have led to an extraordinary increase in product variety. The wrong supply chain operation strategy or agenda could make return on investment thresholds more difficult to achieve by not investing in the right projects at the right time.

Traditionally, both of the functions have an arm’s length relationship, this relationship is more difficult as operationally the two functions should be better aligned but have different outlooks that are not fully understood by the other.

Key words: Supply chain, Profit & loss, Balance sheet, CFO and CSCO