The global credit crunch is jeopardizing the financial health of our supply chains. In 2009, companies should reassess suppliers' financial stability and implement processes to spot operational red flags that are early warning signals of financial stress.

If ever there was a year for financial and revenue management to come to the fore, then 2009 is that year. It's a year which will witness a vacillating, near schizophrenic, model of cost containment and revenue growth, driven by tentativeness, innovation and acquisition.

When the competition is no longer among individual companies but among entire supply chains, every area of end-to-end cost reduction needs to be explored. Financial supply chain optimization has helped leading companies make their whole supply chain more competitive with the introduction of more advanced supply chain finance practices and automated transaction processing. Finance, supply chain, and procurement groups need to collaboratively explore how to use supply chain finance to reduce supply chain costs.

Increased linkage between material and financial flows requires supply chain managers to learn more about topics like working capital optimization, margin and asset utilization, valuation and risk, managerial accounting and cash flows, taxes and transfer prices.

The S&OP process should be complemented by a strong root cause analysis and execution framework that ensures that the S&OP plan is continuously tracked with respect to the financial goals set forth by the company. In other words, the S&OP lifecycle should precede the financial reporting lifecycle of a company and should be in lock-step.

Certainly we expect the new president to favor legislation protecting consumers as well as incentives to reduce job losses to low-cost manufacturing countries. But it is not clear how much of an effect he will be able to have, at least in the short term. We do expect to see significant investments in infrastructure/public works projects and a continuation, for now, of recent defense spending levels.

With new crises seemingly emerging weekly, risk management has taken on a new urgency. Leading companies recognize the importance of a solid supply chain risk discipline, but grapple with scope, ownership, metrics, and ties to other types of strategic and operational risks facing the business.

Using a global inventory approach to "fire your inventory" may be much less disruptive than other cost-savings options your company may be considering.