1. The supply chain: The CFO’s
crystal ball
Generating SUPPLY CHAIN Impact
Whitepaper
DESIGN • TRANSFORM • RUN
Broader expectations from the role of a CFO requires finance leadership in
the organization to look beyond the traditional finance, comptrollership,
accounts processes and information flows. This is especially true as companies
increasingly rely on the CFO to shape, refine, and implement their strategic
plans. With these market realities in mind, there may be a secret weapon in the
CFO’s battle to stay ahead of globalization and a fast-evolving marketplace filled
with complexity and risk.
Data-to-Action AnalyticsSM
can help CFOs align their business processes
with targeted business outcomes by embedding industrialized analytics into
reimagined processes.

2. GENPACT | Whitepaper | 2
Today’s CFOs are faced with
dynamic challenges that require
them to possess a clear line of
sight into the dynamics of their
operating environment
CFOs today are faced with multiple challenges that
require them to look both within and outside the
organization for support to enable better business
performance:
• Managing volatility: The top challenge of CFOs
today is handling market volatility with respect
to their supply chain, which has a direct impact
on the volatility in their overall financial and
market performance.
• Navigating compliance and regulations: With
global supply chains comes the increasing
regulatory criteria that can expose a company
to significant financial and reputation risk if not
managed properly. This is especially true for
industries such as life sciences, healthcare, and
capital equipment manufacturing.
• Enabling growth, ensuring profitability:
While profitability from cost take-out and
disciplined drive for operational efficiency is a
key priority for the CFO, strategic reinvestment
decisions that can maximize revenue growth
is also an area that needs continued attention,
considering the dynamic nature of the industry.
Greater visibility into the supply
chain, coupled with insight-
generating analytics, can enable
the CFO to impact transformation
across the organization in real time
The supply chain is a key function whose
efficiency and effectiveness has significant
impact on all the challenges and responsibilities
that the CFO faces today.
• As increasing raw material supply and finished
goods demand volatility, the supply chain
directly impacts the free cash flow of the
organization, impacting financial performance
and market metrics, such as valuations.
• Ensuring timely supply chain compliance to
regulations at both the product and process
level is critical to minimizing the financial and
reputation risk carried by companies, which
directly impacts overall brand perception and
regulatory liabilities.
• Increasingly fickle and dynamic customer
demand cycles have led to the supply chain
becoming the key driver of growth and revenues,
while also having a strong say in the costs
incurred, by ensuring that the right product is
made available to customers at the right time,
reducing replacement risks and costs.
Supplychaininsightscanenable
aCFOtoimproveforecasting
results,reduceworkingcapital
requirements,andboostcashflows,
whilemitigatingriskstypicalto
globalbusinessoperations
The data gleaned from examining the supply
chain can be a primary source of information that
can help forecast a company’s revenue outlook.
Understanding what factors affect products as they
move through a supply chain, and how those factors
impact pricing, costs, compliance, and customer
sat­isfaction, provides a near real-time model a CFO
can use to gain a more accurate idea of market
factors affecting the company, and holds the key
to improving working capital, cash flow, and better
understanding risk. It can even predict revenue and
profitability with a far greater degree of certainty
than previously assumed.
Staying ahead of market
volatility by better forecasting of
commodity prices
With volatility a recurring characteristic of markets
currently, CFOs can overcome the challenge of
balancing inventory investment and procurement
cost by developing analytical models that scrutinize
macroeconomic factors affecting key commodities,
and provides a price driver analysis of the factors
that cause price variations. The model can also
provide fundamental analysis of the demand

3. supply gap in critical commodities and a technical
analysis of historical and current movements of
primary price and volume. This ability to factor
in variations and adjust analysis in near real time
significantly enhances the organization’s ability
to adjust to changing market conditions and seize
opportunities. The better the CFO is able to sift
through complex data sets and form a clear picture,
the better the supply chain team can forecast and
set targets that drive better results.
Enhancing cash flows and profits
through lower inventory turns
As the global foreign exchange scenario continues
to remain volatile, prudent fiscal management of
working capital has become the acute need of the
hour. Improving inventory turns is a major concern
within the supply chain and an obvious focus
for any CFO concerned with optimizing working
capital. CFOs need in-depth understanding of the
composition of their inventory investments and
the ability to transform the inventory base into its
most productive and profitable form through multi-
criteria inventory classification and optimization of
safety stock and service-level requirements.
Optimizing carrying and transaction costs by
an end-to-end value chain analysis, followed by
reviews of assigned inventory targets with the
concerned teams, followed by demand pull system
and a web-based inventory analysis tool, can
establish tighter controls and more timely and
accurate understanding of inventory levels.
Minimizing risk and volatility
through insight-driven decisions
Volatility impacts the end-to-end supply chain,
which in today’s global supply base can be quite
deep and extended. The supply chain is prone to
controllership risks because of its multiple physical
and transactional hand-offs. The CFO who clearly
understands the entire procurement and fulfillment
process and the workings of the physical supply
chain is much better positioned to understand the
cascading effect of risk. Clear insight into the drivers
of supply and demand, costs, and the end-to-end
process can enhance the CFO’s role in guiding
policies that mitigate risk and drive better results
overall. Start with a thorough financial evaluation and
peer benchmarking of the company’s supplier base.
Harnessing data requires Data-to-
Action AnalyticsSM
at scale
But for an enterprise to truly leverage value from
data, it must integrate and then operationalize
process, analytics, and technology at scale,
under an advanced organizational model, to
drive discontinuous improvements in revenue,
productivity, and competitiveness.
GENPACT | Whitepaper | 3
Run Data-to-Insight2
Apply analytics to enable real
time control, visibility and
transparency over the supply
chain process, and reduce free
cash flow requirements
Improve execution practices3
Remap supply chain processes to
facilitate the data infrastructure, and
identify governance metrics and practices
to embed intelligence into the supply chain
Simplify the design process by optimizing
and standardizing the siloed processes
Subject matter intervention to ensure
transference of best in class practices
across the organization and value chain
4 Continuous learning
Improve communication across
the value chain through
dashboards and face-to-face
interactions, that feed
information back for overall
process improvement
Revise standard operating
procedures
1 Identify target
outcome: Optimize
working capital levels to
enhance free cash flow and
valuations for the firm
Identify metrics:
Free cash flow %
Valuation metrics
EXECUTE
ACTIONS
Operate
MeasureImplement
Gather
feedback
Consolidate,
report
Analyze
2
4
Correct
strategy and
targets
Intelligent OperationsSM
to enhance visibility into core processes, and aid
decision making and transparency

4. A global pharma company improved supplier
relationship by implementing analytics to compare
key supplier financial performance factors, building a
benchmarked profile, categorizing suppliers to various
risk profiles, and enabling bankruptcy indicators.
Operationalizing Data-to-Action
AnalyticsSM
in the supply chain:
A win–win for the CFO and the
supply chain
Progressive organizations are leveraging technology
to provide the CFO with a clear, real-time view of the
supply chain organization, using reimagined business
processes that embed analytics and technology into
the decision-making process, allowing the CFO to
extract data that aids in timely decision-making.
Such an entwined operation benefits both functions.
The CFO is better able to forecast revenue and
profitability, decreasing risk and increasing cash
flow. The supply chain team is better able to create
and deliver on plans that mirror the organization’s
operational capabilities and goals.
This close integration has resulted in some
organizations giving the CFO direct responsibility
for the supply chain function. Companies seeking
a way to get control of working capital and see
further into the future would do well to take a close
look at their supply chain. It just might provide the
secret weapon they need to stay ahead of both the
competition and the market.
This can be enabled by combining analytics
capabilities with industry expertise, operations
design capability, and technology to drive
“industrialized” analytics that enables the
foundation for Data-to-Action AnalyticsSM
driven business processes, and make them the
cornerstone of Intelligent OperationsSM
. This can
be achieved by a three-pronged approach to:
• Enable companies to re-think their business
processes with analytics in mind, driving an
intelligent process insights engine
• Create a practical foundation for the information
and advanced organizational structures,
efficiently harness resources
• Orchestrate intelligent operations end-to-end for
maximum effectiveness.
How better supply chain decisions
can generate impact across the
organization
Real-world challenges that our clients have resolved:
A global wind turbine manufacturer in India
lowered its purchase price by 8% through analytical
models that enabled better forecasting of the raw
material costs to drive better sourcing decisions.
A major aviation company reduced raw materials
inventory by 48% (from $60 million to $31
million) in seven months by utilizing analytics to
optimize carrying and transaction costs.
About Genpact
Genpact (NYSE: G) stands for “generating business impact.” We design, transform, and run intelligent business operations including those that
are complex and specific to a set of chosen industries. The result is advanced operating models that support growth and manage cost, risk, and
compliance across a range of functions such as finance and procurement, financial services account servicing, claims management, regulatory
affairs, and industrial asset optimization. Our Smart Enterprise Processes (SEPSM
) proprietary framework helps companies reimagine how they
operate by integrating effective Systems of EngagementTM
, core IT, and Data-to-Action AnalyticsSM
. Our hundreds of long-term clients include
more than one-fourth of the Fortune Global 500. We have grown to over 68,000 people in 25 countries with key management and a corporate
office in New York City. Behind our passion for process and operational excellence is the Lean and Six Sigma heritage of a former General
Electric division that has served GE businesses for more than 16 years.
For more information, contact, analytics.marketing@genpact.com and visit www.genpact.com/home/solutions/analytics-research/industrial-
manufacturing-and-technical-services/supply-chain-decision-services
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