The CFO spoke with Stephen Burnside, Chief Economist 3.0 at Rolls-Royce, about how his organisation is digitising its supply chain to help it become more proactive to Black Swan events that appear to be rising in frequency amid an increasingly interconnected world
Welcome to the Economist Insights series, where The CFO speaks with leading economists about the latest economic trends and challenges impacting businesses with the aim of providing senior finance leaders with the necessary guidance they need to navigate their organisations accordingly.
In the second episode of the series, The CFO is joined by Stephen Burnside, Chief Economist 3.0 at Rolls-Royce, to explore how he supports his management team in making better business decisions, as well as how the aero-engine manufacturer is looking to optimising its supply chain and forecasting to mitigate the impact Black Swan events.
Timestamps:
00:00 Intro
1:10 What does a ‘Chief Economist 3.0’ do day-to-day?
2:35 How close are you in your role to the CFO and CEO?
3:36 Mitigating supply chain issues at Rolls-Royce
5:16 An end to overreliance on Chinese manufacturing
8:26 How revolutionary is the setup at Rolls-Royce with regards digitisation of its supply chain?
10:08 Supply chain optimisation at Rolls-Royce in 2023 and beyond
12:02 How Rolls-Royce is redefining operational process excellence to support business needs
14:00 What step change have you begun to implement at Rolls-Royce to support net zero and what opportunity does that present to you and the business?
There has been a lot written about finance 3.0 in the press. But could you please explain why your role is defined as Chief Economist 3.0 and what you do within an organisation like Rolls-Royce?
Burnside: My role came about in the pandemic. It entails giving insights to the executive team on what’s happening from a macro and micro perspective. And it’s 3.0, because I’m looking at real-time data streaming into the business. I’m telling the executive team, there’s an aircraft that’s moved here and there is a ship that has moved here. [This country] is changing their policy or their approach towards Covid, or towards import regulations, or towards taxation rules and I’m interpreting that information for them, summarising it and saying, “this is what I think we should be doing with this information”.
Many businesses, I think, especially in manufacturing, or heavy manufacturing, have not yet tapped into that real-time, high-frequency data to make a decision. So, 3.0 is really around digitisation of business processes, where we can take a traditional business process that could have taken between three and four months for an executive team to make a decision and compress that down to a couple of days.
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