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Sprechen Sie Finance?

By Art van Bodegraven | 05/18/2012 | 8:24 AM

CFO magazine's latest issue features an article about Marsh, the insurance brokerage behemoth, teaching its 25,000 employees the fundamentals of finance and accounting. In the words of the quirky Gunness commercial, "Brilliant!"

For them, it's all about getting everyone in the organization on board with understanding how maney is made. Not to mention giving the sales force ways to better relate the value of their products for customers, in a meaningful bottom-line way.

So, why aren't more companies in the supply chain management space, or supply chain components of larger organizations, doing the same? We tend to focus too much on the nuts and bolts of execution in our dirty-fingernails workaday world, I think.

We spend too much time trying to wring blood out of the inventory turnip, and, maybe we devote some attention to squeezing a little more on price out of suppliers. But, in general, we have very little idea of how much of what we do touches many, many elements of financial performance - and of how much impact supply chain managment has on overall enterprise health and success.

As a consequence, we don't communicate effectively with CEOs, COOs, CFOs and other higher orders of beings. They aren't interested in inventory accuracy, and we don't know what Return On Equity means. But, ROE, ROA, ROI and other strange terms are what they do relate to - and run the business with.

So, it's way past time to get serious about business reality, and the business relevance of what we do. When we do, and when our communications show that we do, the boss is more likely to get serious about us, and see the supply chain as a strategic investment instead of an erosion of costs.

I'll have that Guinness now, thank you.

 

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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.



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