We do several types of research at Supply Chain Insights- financial benchmarking, quantitative surveys and qualitative interviews. The vision has always been to connect the results of these different research efforts to create a 360 degree view of the supply chain industry. For example, do companies that are more advanced in their utilization of big data demonstrate better cash flow management as measured by the cash-to-cash cycle? Or, do companies that rate themselves as "outside-in" oriented prove more resilient on the Supply Chain Index scale?

 

The infographic below illustrates the connection between inventory turns and Sales & Operations Planning (S&OP) as measured through two separate research efforts.

 

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Companies that were better aligned in their Sales & Operations Planning activities were more likely to improve inventory turns performance from 2006-2013. 49% of all companies demonstrated improving inventory turns performance over the time period, but 67% of companies that rated themselves with high alignment between sales & operations improved inventory performance. This data reinforces what one might expect to see- that better alignment within the organization leads to better financial performance. However, if I've learned one thing through the financial research, it is that often we have misconceptions about our company's financial performance. Of course, the disclaimer needs to be included that correlation does not indicate causation. Still, it's good to find evidence to support the idea that alignment between teams within the organization can be demonstrated in improved financial performance.

 

At the top of the post, I mentioned a couple of different connections we are interested in: big data and cash flow as well as "outside-in" orientation and resiliency. What other connections would you like to see explored between the worlds of supply chain and finance?