We know: it’s old news that the supply chain is a tangled mess. But that doesn’t change the fact that companies need to find a better way to manage their supply chain or potentially find themselves at a competitive disadvantage.

One emerging trend is technology-driven “customer-centric” supply-chain management. In customer-centric supply chains, organizations use customer data to drive strategic decision making. Companies like Nike, Amazon, and Johnson & Johnson are orienting their supply chains around customer data and investing heavily in supply-chain technology.

However, organizations need to be thoughtful and innovative in how they approach their supply-chain strategy because of the uncertainty and speed of supply-chain disruption according to Steven A. Melnyk, professor of supply-chain management at Michigan State University’s Broad College of Business.

In his recent work, Melnyk suggests that supply-chain management has traditionally operated on a “straight line”—the customer “talks” to marketing and the marketing department tells supply-chain managers what the market looks like. But Melnyk says that process needs to transition to a triangle format, in which the customer directly communicates with marketing and supply-chain management simultaneously through digital channels because “the supply-chain manager needs to have an accurate and clear view of what the customer(s) wants.”

CFO Brew recently spoke to Melnyk about why technology is only a part of the solution to supply-chain disruption, why influence is an underrated tool in the supply chain, and why the customer should come first.

*This interview has been lightly edited for length and clarity.

How would you describe the current supply-chain situation?

It is disrupted, and what it’s done is essentially highlighted some of the fundamental problems that we have when you have a primarily efficiency-driven supply chain. That is, for the last 20 years, we’ve been focusing on efficiency, and we’ve done a good job up until 2021.

What we found out in 2020 is that the supply chain basically couldn’t cope. Continue reading here.—DA

The Securities and Exchange Commission has approved new standards for audits of public companies that involve more than one audit firm. The updated rules, which the Public Company Accounting Oversight Board (PCAOB) adopted in June, require that a lead auditor supervise other auditors’ work to ensure they follow policies and procedures. The lead auditor also has to obtain “written affirmation” that the other auditors “possess the knowledge, skill, and ability to perform assigned tasks.”

SEC chairman Gary Gensler said in a statement that some 26% of all public- company audits involve more than one auditing firm, and that audits have become increasingly complex, particularly for companies that have international operations.

“Given the challenges that such multi-firm audits present, it is important that there be robust standards for how lead auditors supervise, communicate with, and coordinate with other auditors on the audit engagement,” he said.

The new standards also require lead auditors to “prioritize their supervisory activities around higher-risk areas in the audit,” according to Gensler.

The PCAOB was established by the Sarbanes-Oxley Act, and is responsible for overseeing audits of public companies. Gensler had criticized the PCAOB in July for being “too slow” to update auditing standards.

“It matters who audits the auditors,” Gensler said in a speech to the Center for Audit Quality to mark the 20th anniversary of Sarbanes-Oxley. The new guidelines are the first issued by the PCAOB under chairwoman Erica Williams.—KL

Coworking is a weekly segment where we talk to CFOs and others in the finance space about their experiences, their companies, and the larger economy. Let us know if you are—or you know—a CFO we should interview.

Chermaine Hu is CFO and co-founder of Episode Six, a payments technology company with offices in Austin, London, Singapore, Hong Kong, and Tokyo that builds platforms for financial institutions and fintech companies. Founded in 2015, the company now has 130 employees globally.

Prior to founding Episode Six, what was your finance background?

I actually studied engineering at university, and at the time, I decided that that may not be the career I actually wanted. I really wanted something a little bit more fast-paced and with a lot more learning and growth. And as a result, right out of college, I went into investment banking. I was an M&A banker for 14+ years, and really learned a lot about all things finance, corporate finance, transactions, and a lot of those skills that you won’t necessarily think about what a CFO’s job is. I think a lot of it is really about learning how to attack situations, how to analyze problems, and then how to come up with ways to solve them.

Fundamentally, to me, the capacity to be able and willing to just understand the situation, and then find ways to solve it, is the most important skill that you need to have as a CFO.

How did your finance background inform the founding of your company and how did it influence the first couple of years?

It’s interesting, because my two partners and I are three very different people with very different skill sets. Continue reading here.—DA

Today's top CFO reads:

Stat: $300,000. That’s how much it costs to raise a child through high school thanks to inflation, according to a new study from the Brookings Institution. (the Wall Street Journal)

Quote: “I wanted to feel like I was meaningful as a nurse…not a cog in the Amazon machine.”—A nurse who formerly worked for Amazon Care, which she said didn’t always prioritize patient safety. (The Washington Post)

Read: Dan Price has resigned as CEO of Gravity Payments amid new allegations of “a pattern of abuse.” (the New York Times)