This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.

Social Media Links

| 1 minute read

More Turbulent Supply Chain Waters Ahead - Better Financial Forecasting Needed to Help Navigate

Initial supply chain shocks in the first months of the pandemic were unnerving. They were, however, also relatively predictable as material and transportation shortages made sense given the collective crisis. Vendors and customers found ways to work together to address and adapt to shortages.

Complexities and second-order impacts are spreading to new parts of the economy (accelerated in part due to the Russia-Ukraine War, inflation, new shifts in consumer behaviors, emerging technologies, etc.). Predicting revenues and costs will be even more difficult in the months ahead. Potentially more challenging to predict and address will be changed to working capital. Impacts on cash are not only influenced by supply chain conditions, but also by rising interest rates, changing commercial terms, and payment stability of commercial partners.

In these turbulent waters, leadership needs to understand what their financial models are telling them to better navigate their businesses to create and/or preserve value. Finance and FP&A teams need to revisit methodologies to better quantify and qualify both results and forecasts. A few techniques should immediately help. Backward-looking forecast accuracy scoring helps set confidence levels and can flag the need for better forecast approaches. Value driver analysis helps prioritize those business levers that will drive the most impact. And automated reporting shifts effort from data collection and reporting to critical analysis and insight generation.

© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.

Supply variability is the new normal. Variability is the highest in the history of supply chain management. In the last two years, traditional processes and technologies failed in the face of the challenge requiring greater dependency on ad-hoc manual processes. However, these two years are only a warm-up for what will come in the next thirty-sixty days.


office of the cfo, finance, perspective

Let’s Connect

We solve problems by operating as one firm to deliver for our clients. Where others advise, we solve. Where others consult, we partner.

I’m interested in

I need help with