Financial Intelligence for Supply Chain Managers: Understand the Link between Operations and Corporate Financial Performance

Financial Intelligence for Supply Chain Managers: Understand the Link between Operations and Corporate Financial Performance

by Steven M. Leon
Released November 2015
Publisher(s): Pearson
ISBN: 9780133838664

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Book description

Discover how your supply chain and operations work impacts financial performance, and how to align your efforts to help your company succeed – the fastest, best way to supercharge your own career! As a supply chain or operations professional, you may clearly understand your operational performance goals. But if you want to get promoted, you need to know how your day-to-day work powerfully impacts the financial metrics your top executives care about most.

Financial Intelligence for Supply Chain Managers gives you this insight. Steve Leon broadens your view of what you do every day, so you can make your entire business more successful. Using new case studies and executive interviews, Leon explains:

  • How supply chain and operations decision-making directly impacts ROI, Return on Assets, Working Capital, Cash Conversion Cycle and other key financial metrics

  • How to make choices that help your company lead financially from a supply chain and operations perspective

  • What to do when executive management sets a specific financial goal

  • How the cross-functional nature of supply chain management makes it harder to achieve financial goals – and what to do about it

  • What you need to know about financial documents such as balance sheets and income statements

  • How performance measures and reward systems can sometimes conflict, damaging financial performance – and what to do about that, too

    • Supply Chain Finance will be indispensable to everyone with supply chain or operations responsibilities -- in inventory, purchasing, sourcing, logistics, transportation, manufacturing, service operations, forecasting, demand management, supply chain network design, process improvement, supply management, project management, and beyond!

    Table of contents

    1. About This E-Book
    2. Title Page
    3. Copyright Page
    4. Contents
    5. Acknowledgments
    6. About the Author
    7. 1. Introduction
      1. What Is Important to the CEO?
      2. Supply Chain and Operations Value Proposition
      3. The Role of Supply Chain and Operations
      4. Value Chain
      5. Supply Chain and Operations Financial Impact
      6. Value from a Different Perspective
      7. Structure of the Book
      8. Summary
    8. 2. Financial Statements Overview
      1. What Are Financial Statements?
      2. What Are Financial Statements Used For?
      3. A Closer Look at the Elements of Financial Statements
        1. Balance Sheet
        2. Income Statement
        3. Statement of Cash Flows
      4. Relationship between Financial Statements
      5. Summary
    9. 3. Financial Statement Primer Essentials
      1. Introduction
      2. Value of Assets
        1. Property Example
        2. Plant and Building Example
        3. Equipment
      3. Noncash Transactions
        1. Tangible Assets and Depreciation
      4. Net Fixed Assets
      5. Nontangible Assets and Amortization
      6. Inventory Costing and Cost of Goods Sold
      7. Operating Leases and Off-Balance Sheet Transactions
      8. Net Accounts Receivable
      9. Net Revenue
      10. Net Credit Sales
      11. Foreign Exchange
        1. Revenue
        2. Inventory Purchases
      12. Stockholders
      13. Summary
    10. 4. Ratio Analysis with Financial Statements
      1. Benchmarking
      2. Ratio Analysis
        1. Caveats to Ratio Analysis
      3. Financial Ratios
      4. Liquidity Ratios
        1. Current Ratio
        2. Quick Ratio
        3. Operating Cash Flow Ratio
      5. Profitability Ratios
        1. Profit Margin
        2. Operating Profit Margin Ratio
        3. Gross Profit Margin Ratio
        4. Basic Earnings Power Ratio
        5. Return on Total Assets Ratio
        6. Return on Equity Ratio
      6. Valuation Ratios
        1. Earnings per Share (EPS)
        2. Price-to-Earnings (P/E) Ratio
        3. Price/Cash Flow Ratio
        4. Market/Book (M/B) Ratio
        5. Dividend Yield
        6. Dividend Payout Ratio
      7. Asset Management Ratios
        1. Inventory Turnover Ratio
        2. Days in Inventory
        3. Accounts Receivable Turnover Ratio
        4. Days Sales Outstanding
        5. Fixed Asset Turnover Ratio
        6. Total Assets Turnover Ratio
      8. Debt Management Ratios
        1. Debt Ratio
        2. Debt-to-Equity Ratio
        3. Times Interest Earned
        4. Debt Service Coverage Ratio
      9. Summary
    11. 5. Company Valuation
      1. Value
      2. Competitive Advantage
      3. Reorganizing Traditional Financial Statements
        1. NOPLAT
        2. Invested Capital
        3. Return on Invested Capital
        4. Free Cash Flow
      4. Cost of Capital
      5. Performance Trees
      6. Summary
    12. 6. Decision-Making Tools
      1. Introduction
      2. DuPont Model
      3. Extended DuPont Model
      4. Capital Budgeting
        1. Net Present Value
        2. Internal Rate of Return
        3. Payback Period
      5. Risk and Decision Making
        1. Decision Trees
        2. Simulation Models
      6. Break-Even Analysis
        1. Break-Even and Make or Buy Decisions
        2. Real Options
      7. Summary
    13. 7. Project Management
      1. Managing Projects
      2. Project Success and Failure
      3. Project Selection
      4. Project Implementation
      5. Project Completion
      6. Projects and KPI Trees
      7. Summary
    14. 8. Supply Chain Network Design and Location Analysis
      1. Business Strategy and Competition
      2. Supply Chain Network Design
      3. Location Selection
      4. Cost Behavior
      5. Supply Chain Network Modeling
        1. Case Example Mid-Atlantic Hospital System
      6. Network Design Analysis
      7. Capital Budgeting
      8. DuPont Model
      9. Summary
    15. 9. Inventory Management
      1. How Much Inventory to Order
      2. Total Inventory Costs
      3. When to Reorder Inventory
      4. Inventory Reduction
        1. Safety Stock
        2. Just-in-Time
      5. Inventory Tracking
      6. Demand Forecasts
      7. Financial Performance
      8. Summary
    16. 10. Sourcing and Supply Management
      1. Why Is Sourcing and Supply Management Important
        1. Financial
        2. Environmental
        3. Social
      2. Organizational Purchasing Structure
      3. Sourcing and Supply Management Objectives
        1. Purchasing Strategies that Support Organizational Goals and Objectives
        2. Supply Continuity to Support Operations
        3. Obtain and Develop Suppliers
        4. Reasons to Outsource
        5. Selecting and Evaluating Suppliers
        6. How Many Suppliers to Use
        7. Supplier Involvement and Development
        8. Managing the Sourcing Process Effectively and Efficiently
      4. Supplier Location and Total Cost of Ownership
        1. Purchase at Lowest Total Cost of Ownership
      5. Supply Management and the Financial Connection
        1. DuPont Model
        2. Accounts Payable Turnover
      6. Summary
    17. 11. Supply and Value Chain Metrics
      1. Supply Chain and Competition
      2. A Case of Outsourcing Production
      3. Summary
    18. Index

    Product information

    • Title: Financial Intelligence for Supply Chain Managers: Understand the Link between Operations and Corporate Financial Performance
    • Author(s): Steven M. Leon
    • Release date: November 2015
    • Publisher(s): Pearson
    • ISBN: 9780133838664