For CFOs, enhancing supply chain performance may be a matter of trust

Introduction

The disruptions that have rippled through the global economy in recent years, ranging from the COVID-19 pandemic to extreme weather events, to geopolitical unrest, have elevated the importance of supply chain resilience. Many CFOs, well aware of the value at stake, have invested in technology to ramp up the agility and efficiency of their companies’ supply chains. These investments have helped improve the flow of goods and services in the face of supply shortages and fluctuating demand.

Still, finance leaders may have overlooked a key factor in de-risking their supply chains: namely, stakeholder trust. When companies face catastrophic events, confidence in suppliers’ capability, reliability, humanity, and transparency become critical. CFOs need to ensure that their partners have well-designed, consistent plans to protect their organizations against crises and respond to shock, rather than frantically putting out fires. By identifying such exposures, CFOs can fulfill their mandate of addressing enterprise risk, which remains among their priorities in this year’s CFO Agenda.¹

Furthermore, a Deloitte Global survey found that trust-building investments can correlate with greater supply chain resiliency and substantial growth in revenues.² The survey drew responses from 1,037 executives—each working within or close to their organization’s supply chain function—representing a cross-section of industries and 10 countries.³ The research found, among other things, that executives overestimate the trust in their supply chains by an average of 20%.⁴ That’s a worrisome number, as it highlights potential blind spots and risks that can influence performance.

In this edition of CFO Insights, we’ll examine why fostering trust in supply chains is more important than ever. We’ll explore how trustworthiness affects performance and what’s at risk for companies whose supply chains lack this vital quality. What investments should CFOs consider to earn—or rebuild—stakeholder trust? And why are some executives’ levels of trust in their supply chains overstated?

Endnotes

¹ The CFO Agenda, CFO Program, Deloitte Development LLC, 2022.

² “Is your supply chain trustworthy?,” Deloitte Insights, July 13, 2023.

³ Respondents originated from the following industries: technology, media, and telecom (26% of sample); consumer (26%); energy, resources, and industrials (20%); life sciences and health care (20%);and financial services (4%). Their geographies spanned North America (44%), EMEA (31%), andAsia/Pacific (25%).

⁴ “Is your supply chain trustworthy?”

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