3 Ways Finance Can Help Navigate Supply Chain Disruptions

insightsoftware -
October 14, 2022

insightsoftware is the global provider of enterprise software solutions for the Office of the CFO to connect to & make sense of data in real time, driving financial intelligence across […]

22 10 Blog 3waysfinancesupplychain

In recent years, supply chain delays have moved to the forefront of global news. An unprecedented blockage in the Suez Canal rocked the worldwide economy and highlighted the need for rapid, predictive supply chain insights.

Shipping and supply chain disruptions leave businesses reprioritizing, rescheduling, and floundering to successfully manage inventory. Gone are the days of finance sitting comfortably in the back seat. The road is unclear and to avoid lengthy delays and unhappy customers, those driving the bus need to know about supply chain roadblocks as far in advance as possible. Here, we discuss three ways finance teams can cope with constant changes to the supply chain.

1. Break Down Silos

When departments like IT, finance, and accounting work in separate teams with little to no communication, and when ‘command and control’ hierarchies are expected, it breaks the organization down into functional silos. Siloing comes with its fair share of risks, such as:

  • Disconnect between departments
  • Inefficiency
  • Sub-par customer service
  • Inability to properly budget and forecast

This poses a challenge for supply chain management because the communication gap between departments makes it more difficult to communicate inventory vs. end user demand.

A simple example of this would be that Sales holds data around which products sell fastest and trends in customer buying behavior. If they keep this data siloed, then Procurement and Finance would not know to order more units or build that capacity in future budgets. The popular product is at risk of selling out, preventing the organization from earning additional profit and harming customer relations.

To bridge silos, increase collaboration between multiple departments. Set up systems and processes to share inventory data across departments so that everyone on the team can stay ahead.

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2. Plan Ahead to Curb Supply Chain Chaos

In the current market environment, products can become scarce and the chain itself can grow unstable at any time. Citing supply chain challenges, the International Monetary Fund reduced its forecast for global economic growth from 4.9% to 4.4% in 2022.

The US has been hit hard. Because of land scarcity, warehouse vacancies are at alarmingly low rates – from 1% in areas of southern California and 2.4% in northern New Jersey. This has caused disarray at American ports. With scarce storage space, goods have been left piling up on docks or ships to float offshore for up to several weeks until they can be collected. In the early months of 2022, container ships stayed at ports in the United States for an average of seven days, a rate that has increased by 21% since the beginning of 2020.

Hopefully your organization’s supply chain position is stronger than the above example, but the point still stands: your supply chain is more fragile than you think and demands constant focus. Roadblocks are unpredictable and warning signs are often not highlighted in stock reports. Once you’ve broken down data silos with a system that enables collaboration, you need the ability to easily drill down into your data to find the source of any discrepancies.

In many native reporting solutions, these deep supply chain insights require technical skill to extract and analyze. It takes too long to report and drill across multiple dimensions from the Financial Accounting (FI) and Controlling (CO) modules using SAP Analysis for Office. And waiting on IT for BusinessObjects reports drastically reduces your organization’s time to respond to threats.

Finance teams can stay ahead of the chaos by self-serving the analysis they need when they need it. With easily configurable reports, connected directly to source data, you can strengthen inventory forecasting and plan even farther ahead. Keep a close track of inventory and place orders before products become scarce to leave room for potential shipment delays to maintain a competitive edge.

3. Automate Inventory Management

Simplifying inventory management with an automated solution can help drastically. Eliminating as many manual processes as possible saves time and resources for finance teams. Copying and pasting data from your ERP solution and other business systems into spreadsheets is time consuming, which runs the risk of outdated data by the time the report is finished.

In addition, the copy/paste processes often introduce errors. A missing value in the source data, for example, can result in numbers being pasted into the wrong rows. That, in turn, can produce erroneous results. To make matters even worse, this manual process needs to be repeated every time the information is updated in the ERP system. Otherwise, analysts are working with old data, and they cannot get an accurate picture of what is happening in business right now.

With an automated tool, your reports can be automatically run and refreshed to help you stay on top of your supply chain. Gain visibility into stock and connect with distribution partners before inventory runs low.

Connected, Automated Supply Chain Visibility

When your data is housed on a complex ERP like SAP, the system struggles to deliver clear visibility for reporting on its own. Reporting solutions, like Wands for SAP, address FICO reporting needs, but it’s critical for Finance to have awareness and understanding of all activities that have an impact on the GL. Without the ability to identify and examine the underlying root causes behind issues that surface in financial reports (e.g., low revenue), finance doesn’t have the required information to affect change.

Angles for SAP can plug and play on any SAP ERP, including both ECC and S/4HANA, to collect and prepare data so it is suitable for reporting. With Angles your supply chain future is in safe hands.

  • Identify shortages and delays – and their root causes – before they are picked and shipped.
  • Remove inventory you don’t need, highlight purchases that can be delayed, and reduce part shipments, late payments, expedites and overtime, and more.
  • Understand current lead times of each stage of the supply chain process; highlight consistent delays and bottlenecks.
  • Remove wasted effort, inventory, and cash. Eliminate the need to keep creating reports and downloading and manipulating data in tools such as Excel.
  • Identify unnecessary purchases and production, slow-moving items, obsolete inventory, stock claimed by polluted orders, dead stock, etc.

Connected. Angles for SAP applies a context-aware, process-rich business data model to SAP’s complex data structure and simplifies into normal business terms and language users understand, empowering business users to get answers quickly. Loaded with unique, built-in, cross-process intelligence, Angles for SAP makes your ERP transactional data easy to understand. You’ll be able to analyze processes across the entire value chain with hundreds of calculated fields specifically designed to enrich your organization’s SAP data. This means the whole organization, from Finance to supply chain, HR, plant maintenance, compliance and more.

Automated. Business users too often rely on data analysts or others within IT who have an expert knowledge of the enterprise data model but lack context for the business problems being reported on. Thanks to deep understanding of SAP, Angles for SAP enables automatic extraction of your production SAP data by interpreting your company’s SAP data model, application logic, and customizations. Angles for SAP provides you with a contextual understanding of your SAP data without having to go to data analysts or IT who may not understand or grasp the necessary content.

Easy Visibility. Angles for SAP offers an easy-to-use, self-service interface to create reports or dashboards for your business users. Perform searches using real business language rather than highly technical query languages like SQL or an in-depth knowledge of the enterprise data model. Transform complex SAP data into actionable insights, presented in everyday business language and easily searchable – allowing your users to quickly find information by searching for keywords. This freedom to perform their own analytics unleashes your team’s investigative capability, allowing them to autonomously measure performance, analyze issues, and take action.

Supply chain uncertainty isn’t going anywhere. But by unifying siloed departments, planning ahead, preparing data, and running automated operational reports, you can stay ahead of the curve, keep your inventory stocked, and earn maximum profit even with supply chain disruptions.

Need to tame the complexity of SAP to smooth out your supply chain reporting process? Schedule a demo of Angles for SAP and learn how the solution transforms complicated data into actionable insights that help you rise above supply chain hiccups.

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