Module 7
Linking Supply Chain and Financial Management
What can you expect?
The first generation of Operations Management focused at optimizing the physical fl ows, logistics and inventory levels in 1970-80. The second generation Supply Chain Management in 1990s focused on the integration of information flows in decision-making, the development of coordination mechanisms and common information systems.
Now, the third generation SCM managers begin to study and manage the fi nancial flows resulting from Supply Chains operations. Indeed, the financial impact of SCM is important both in scope (revenues, costs and asset investments) and in complexity (currency risks, fiscal and customs impact of location, timing) for the profitability of the operations.
This module treats the financial impact in a systematic manner adapted to the decision-making needs of the Supply Chain manager. Some examples of questions that the module addresses:
- How can I increase the revenue generated from a given operation (location, capacity, resources) through revenue management techniques?
- What is the link between the level of accounts receivable and the quality of the delivery process and the timing of deliveries (end of month billing processes,...)
- How to finance changes in inventory level through effects in working capital, pilferage and obsolescence?
- What is the impact on accounts payable of improved ordering and purchasing policies?
Making decisions that improve the overall financial health of the organization must be a key objective of the Supply Chain manager. Few realize how important the impact of their decisions can be. On the other hand a good financial reporting system will enormously help the Supply Chain manager. With this module we want to help the Supply Chain manager, the controller and the financial manager work hand in hand in order to maximize the value of the Supply Chain for the company.
The learning objectives of this module are to help the participants:
- Understand the different levels of the balance sheet affected bythe different Supply Chain management decisions
- Analyze inventory decisions and their impact on the working capital
- Develop reporting tools that are coherent with the financial objectives of the organization
- Familiarize with revenue management techniques.
The module draws on learning from earlier modules, e.g., in terms of flows and contract coordination instruments.
Prof. Mathieu van Vyve
Envisaged case study and visit: "FN Herstal"
Location: Liège (B)
Date: October, 10-12, 2013