Today’s CFO role includes overview
The role of chief financial officer (CFO) today carries many operational responsibilities that it did not have 10 or 20 years ago. Today’s CFO focuses on operations, data and people.
“In many ways, the CFO is no longer relegated to just finance and accounting, or perhaps [financial analysis] – it’s really the whole shooting game,” Matt Janopaul, chief financial officer of Fender Musical Instruments Corp., told PYMNTS.
Janopaul has been involved with Fender for over 20 years, holding positions such as investor, president and COO. In January, he was named chief financial officer of the 75-year-old luthier who outfitted musical legends from Jeff Beck to Stevie Ray Vaughn and became an icon in his own right in the process.
“As a finance professional, you can talk about IRRs [internal rates on return]cash-on-cash returns, EBITDA [earnings] and so on – or you can talk about helping grow and build one of America’s iconic brands that is frankly influencing culture and society not just domestically but around the world,” Janopaul said.
Maintain a competitive advantage
Fender has two large factories – one in Southern California and the other in Mexico – and 4,000 employees. Although the guitars cannot be made remotely, the company has been able to continue shipping during the pandemic.
One thing that made this possible is that five years ago, before the pandemic, the company outsourced all of its distribution to FedEx. This meant that Fender could continue to ship products to its customers, even at the start of the pandemic, since FedEx facilities were considered essential.
Additionally, Fender’s finance team was already decentralized, so they could continue to run the back office without having to be physically present.
A third thing that has allowed the company to continue shipping products is how it works with its overseas suppliers. Although Fender makes guitars in North America, it also sources from Asia. By giving these suppliers more visibility on its needs, the company allows them to plan their factories.
“Our real competitive advantage, especially over the past two years, is that we had supply and we could provide that supply to our customers,” Janopaul said.
Give suppliers visibility into demand forecasts
At the same time, like everyone else, Fender has to deal with the exponentially higher costs of moving products from Asia to Europe or the United States. The company has made sure to take into account everything related to shipping and shipping costs. It is also thinking about other parts of its supply chain that it can outsource to expedite the movement of products from ports to distribution centers to customers.
Fender also values its strong, long-term relationships with its original equipment manufacturers (OEMs) and its use of Electronic Data Interchange (EDI) and supplier portals.
“We already had it, but we’re taking it to the next level to give them even more visibility into our demand forecast so they can see the big picture of their planning and have more information,” Janopaul said. . “I think that helps set us apart from some of the other manufacturers in our industry.”
Leading the evolution of the industry
Fender also has a dealer portal, which allows it to communicate directly with its independent dealers. These include single storefront retail stores, pure online stores, and large retailers such as Sweetwater, Guitar Center, and Amazon.
Before the pandemic, dealer orders were placed at an annual show. Beginning in 2020, in the wake of the pandemic, Fender launched online dealer events and now offers dealers the ability to purchase products online through a B2B portal.
“This industry has evolved, and we hope we are leading that evolution,” Janopaul said.
Looking ahead, Janopaul said Fender’s finance and treasury team has been looking at automation and machine learning. The team found that while these solutions were historically aimed at much larger enterprises, there are now mid-market solutions that don’t require large overhead to maintain, but still help operations be more productive. .
“We’re thinking about moving from a billion-dollar company to a larger enterprise and the role that automation and machine learning will play,” Janopaul said. “We are already beginning to experiment with various functions within the finance and treasury team in these areas.”