CFOs set their sights on supply chain

Companies plan to spend big on key supply chain or logistics projects over the next 12 months a new report finds

CFOs set their sights on supply chain
CFOs set their sights on supply chain

By Anna Game-Lopata | May 1, 2012

Research just released by international project professional firm Resources Global Professionals, finds 46 percent of Chief Financial Officers (CFOs) plan to spend big on supply chain and logistics projects over the next 12 months.

Another 38 percent will focus on operations while 33 percent intend to initiate finance projects.

The report, which surveys senior finance professionals of companies employing 200+ staff in the mining, retail, manufacturing and financial services sectors also finds cost cutting and improving internal processes remain strongly on the agenda.

Resources Global Professionals Managing Director for the Asia Pacific, Jacinta Whelan says the report’s key finding is that almost all businesses are undertaking process improvement.

"Ninety two percent of companies indicate their major business initiative over the past 12 months, and set to continue, will
focus on
process improvements," Whelan says.

"Sixty percent of companies say they are undertaking cost cutting strategies, while 52 percent are restructuring," she adds.

Meanwhile, the report shows 40 percent are enforcing redundancies, 36 percent are moving more of the business to a shared service environment
and 36 percent are involved in mergers or acquisitions (M&A).

"Companies have been using every possible strategy to improve their operations, with all of our response areas scoring greater than 32 percent," Whelan says.

The survey also indicates process improvement and cost cutting will continue on the business agenda into 2013, with a decreased focus on restructuring and redundancies.

"After five tough years, businesses are acknowledging they have to look continually at processes to stay lean – and smart companies realise the benefit of being able to tap into a reliable source of skills and expertise without adding to headcount," Whelan says.

Interestingly another key finding of the research is that projects are getting shorter.

Whelan says the trend from Resources’ 2011 survey – that project length was decreasing on average from 3-6 to 1-3 months, continued in the 2012 survey.

"Companies are prioritising their projects, spending time defining these projects, then determining their return on investment (ROI) and being accountable for delivering the projects against these metrics," she says.

When choosing people for a project team, the CFOs indicate that the most important factor is the quality of prospective team member (88 percent), more so than cost (44 percent).

In addition 21 percent think the economy is on the downturn while only 4 percent believe it is on the upturn.

Forty percent of CFOs say the carbon tax will negatively impact their business (16 percent
say it's not applicable).

"The high Australian dollar is of more concern to CFOs than the carbon tax because it is an immediate, rather than a future issue," Whelan says.

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