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Linking Supply Chain Performance to a Firm’s Financial Performance

It’s clear, from a high level, just how important supply chain performance is to a company’s bottom line. However, it can be difficult to know at first just how the supply chain decisions affect the overall business from “in the trenches”. Priscilla Wisner (Distinguished Lecturer at the University of Tennessee) shows us just how the supply chain’s decision making (and the results of that decision making) can be seen in standard financial reporting. By knowing this information and understanding it, the supply chain management can more accurately identify impact on the business: To build an effective model between supply chain decisions and organizational performance, the supply chain organization in a firm must understand how its actions and decisions link to the financial components of the firm. Then, it should analyze the influence that its various actions and components have on outcomes that influence financial performance. This linkage model will help to ensure that the supply chain organization is making and implementing decisions that are valued by the top management of the firm. Wisner gives two charts to assist both the business and the supply chain managers understand where to look for this information in traditional reporting, giving a head start on cutting down the cost and overrun possible due to mismanaged or misunderstood supply chain initiatives.

About Matthew Kabik

Profile photo of Matthew Kabik
Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, social media consultant, and trainer before moving into editorial.

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