The supply chain is a system of operations that identifies the informational, material, and economic steps from suppliers to consumers. A flexible and efficient supply chain today is one of the most essential competitive advantages of the company in any industry and market (Hanley & Luttner, 2022). It is directly linked to manufacturing, marketing, sales, finance, and company’s processes. Even though marketing or production are vital components, financial information remains a decisive factor affecting the supply chain.
The central role of finances in the mentioned process is foundation establishment. It signifies that a company establishes its minimum expenses on every related operation in logistics and seeks to fulfill the required minimum first. By doing so, a manufacturer can avoid or predict possible challenges (Hanley & Luttner, 2022). In addition, financial data helps drive collaborations outside of the corporation. It implies that the organizations form cooperation with marketing, logistics, and other partners to ensure their financial plans are correspondent (Hanley & Luttner, 2022). Moreover, knowing the expenses, a producer can easily optimize its processes using the technology that would save a penny. For instance, a balanced scorecard can help alleviate strategic planning by highlighting the resource allocation sections. This card also enables more profound management information – a manufacturer will know the finance leakage points and manage them.
In summary, the supply chain management strategy permeates almost all business processes of any company, from the customer’s order to the delivery of goods or services to their address. In order to manage supply chains effectively, manufacturers should pay attention to financial information and take advantage of it. On the whole, it helps foresee and steer clear of possible impediments, establish cooperation with partnering parties, and allocate finances correctly.
Reference
Hanley, S., & Luttner, D. (2022). Finance’s role in today’s supply chain challenges. CPA Practice Advisor. Web.