by Terence Leung

In a growing economy, competition and the emergence of digital business models are compelling companies to improve both their physical and financial supply chain (for a definition of financial supply chain, please refer to this article). However, they are facing many chronic (and by no means trivial) issues in their financial and supply chain operations, affecting profitability, efficiency and company health:

  • Inventory: out-of-stock and overstock problems, leading to lost sales and/or steep discounts
  • Procurement: lack of means to always procure from suppliers that will help satisfy your supply chain needs with best attributes (price and performance wise)
  • Sales: lack of ability to analyze how to induce customers to pay on-time (beyond treating just the symptoms, for example by giving more compelling discounts or apply tougher dunning)

For manufacturing companies across industries such as CPG, Retail, Discrete and Process Manufacturing, Automotive, High Tech, Medical Device, and Pharmaceutical, their businesses are global in scope with inherit supply uncertainty, forecast inaccuracies, and a very complex product/vendor/customer matrix.

As addressed in a previous blog, linking more and more relevant data from different entities is one of the first steps in digitization and advanced analysis. But as McKinsey pointed out, a lack of data management expertise and integration of systems may cause a failure to use up to 75% of the data. In addition, companies have a lack of talent to perform forward-looking analysis and other necessary actions to derive insights to improve the business.

With this in mind, we are leveraging our Balance Sheet of the FutureTM and our analytics platform to give Finance and Operations executives the tools they need to put cash back to the Balance Sheet. The solution looks holistically at the whole supply chain, starting with the purchase, going through goods receipt and payment, inventory management, and ending with the sales and its payment. This enables our customers to analyze, for example, sales velocity, inventory level, customer satisfaction, supply capacity/performance, quality, risk, and other factors with unparalleled precision and ease.

For each product or SKU, for example, we perform scenario analysis to optimize stock level, supplier pricing, and risk. This was not possible before because of data, algorithmic, knowledge and technology issues. We provide our business customers with the ability to gain unparalleled insight without requiring them to be a data scientist. The Balance Sheet of the FutureTM enables our business customers to drill deep into their data in different business granularity with ease and reap the business benefits soon! We will explore further. Please comment on what you are observing or facing!

And may I make an additional request on a very relevant topic: please participate in this online “2018: The Year of Working Capital” survey, organized by Finance Executives International (FEI). As mentioned in the survey introduction, “several senior financial leaders have already pledged that getting working capital to run as efficiently as possible is a top priority for 2018”. How is working capital factored into your decisions for growth, operational improvements, and change?

A note about the author: At Greenlight Technologies, Terence Leung conceptualizes and manages analytical solutions for Finance, which serves the increasing needs of the Office of the CFO on strategic decision-making critical to processes, operations and transformations. He was previously at Deloitte Consulting’s Finance, Operations and Strategy practice and at solution providers including i2 Technologies (now part of JDA) that optimize company performance and processes. Terence really enjoys interacting with industry practitioners on topics such as business value, technology, business models, and especially analytics.