Mapping supply-chain cost drivers
Finance and Supply Chain often seem to be operating in 2 separate worlds. Supply Chain’s job is to get things delivered, whilst Finance is very much focused on and organized around the month-end closing figures. Once those reports are available, Controllers then provide comments and take care of allocating the costs within the organization. Many companies already have Plant Controllers and Commercial Controllers working on a more precise allocation of costs, but somewhere in between them is a vacuum waiting to be filled by Supply Chain Controllers.
All too often, supply chain costs are either a big black box or mistakenly pushed towards manufacturing or commercial departments. That’s why supply chain controlling should clearly map the real cost drivers in the supply chain. The denser your distribution network or the lower the value density of your products is, the more important the role of supply chain controlling will become. In-depth insights into these cost drivers are a prerequisite for making the right trade-offs. Whether the variables that can make or break your supply chain efficiency are stock levels, fluctuating energy prices, delivery complexity, capacity allocations or other such factors, almost every organization will have its own ‘burning platform’ for supply chain controlling.