When supply chain and finance operate in silos, we end up with different numbers, conflicting goals, and misaligned decisions. Sales forecasts and financial forecasts rarely match, and the lack of a single version of the truth leads to duplicated work, missed opportunities, and a business that reacts to surprises rather than steering confidently toward its goals.
In many organisations, finance and supply chain each create their own plans. The result? Two versions of the truth or worse, two completely different truths. This disconnect means we spend energy on reconciling plans instead of adding value. The real issue is that S&OP (Sales & Operations Planning) and FP&A (Financial Planning & Analysis) are not speaking the same language. Financial targets and operational constraints clash, and we lose sight of our common purpose.
Today’s volatile markets demand more than monthly alignment. Rapid shifts in demand, supply disruptions, and fluctuating costs mean that outdated or siloed plans quickly become irrelevant.
We need a single, coherent view that connects operational realities with financial outcomes.
More than 80% of planning effort between Finance and Supply Chain overlaps. By integrating these processes, organizations can eliminate redundant work, reduce errors, and ensure that everyone is working from the same playbook.
A cornerstone for bridging the gap is the Supply Chain Triangle – service, cost, and cash (or capital employed). Both supply chain and finance share the same objective in this triangle: driving value for the company, as measured by ROCE (return on capital employed) or EVA (economic value add). Finance often pushes for lower inventory to free up cash, but if we go too far, we risk service issues and operational firefighting.
The triangle helps us link supply chain decisions to financial outcomes, and it’s essential to understand the investor’s perspective: what EBIT (earnings before interest and taxes) do we generate over the capital employed? Different strategies – lowest price, differentiation, broad portfolios – require different balances of margin and capital employed, but the goal remains the same: sustainable value generation.
How do we move beyond these silos? By translating operational plans into financial outcomes, bridging S&OP and FP&A. This means:
To put integration into practice, consider these concrete actions for bridging Supply Chain and Finance:
There’s a lot that can be won from building one planning truth: decisions made with confidence, plans that actually align, and a business that moves faster because everyone’s working from the same truth.
Finance and Supply Chain can and should be powerful allies, combining operational knowledge and organisational power to drive sustainable value.