By Xhaxany Cuellar, Assistant Editor
In the business world, every field has a bridge that connects them. For example, the bridge between Economics and Accounting is Finance, and the bridge between Marketing and Human resources is Management, but what about the bridge that connects Accounting and Supply Chain?
Drs. Jim King and Jerome Lockett, professors at the McLane School of Business, have started a new study theory on the connection between supply chain and accounting. Following Professor Lockett's reading of his works, he discovered no connection between the two topics. Together, Drs. King and Lockett have spoken to many national boards with their presentations.
On October 27, 2023同城快约, in Memphis, Tennessee, Drs. Jim King, Jerome Lockett, and Sujitha Dharma delivered a presentation to the International Academy of Business and Public Administration Disciplines titled 鈥淪upply Chain Disruptions: The Role of Accounts for Resilience.鈥� The talk addresses the need for resilience and emphasizes important issues such as the abrupt change in low demand that led to price volatility and harmed supply chain operations. The presentations include a number of factors that contribute to these abrupt changes, such as closed factories, higher transportation costs, a lack of workers and supplies, piled-up cargo ships, increasing tariffs, empty shop shelves, and conflicts in Israel and Ukraine. In light of this, the supply chain鈥檚 recovery will take years.
Additionally, the professor鈥檚 presentation indicates that more focus is needed in supply chain accounting. Financial leaders should increase their understanding of the supply chain with regard to legal considerations, tax issues, and international trade norms and regulations. Accountants should brace themselves for years of prolonged disruption. Accountants will also need to start developing more 鈥渨hat if analyses鈥� for budgetary planning in order to account for the increased cash flows required for sudden disruptions. It has been suggested that a continuous program is required to improve sustainability.
Accountants must not only plan for potential financial disruptions but also help supply chain management integrate environmental and social concerns, as cost containment becomes a more pressing concern than social concerns.
The second presentation presented on January 4, 2024, in New Orleans, LA centers on accounting for the environment as part of the ESG (environment, social, governance). ESG considers how a company protects the environment, manages internal and external company relationships, and a company鈥檚 leadership and responsibility roles. A few factors play into his aspect, for example, air emissions. A healthy life for physical assets depends on good air quality and the accounts role in this would be to budget for new technologies to reduce air emissions.
In their presentation, the professors ask how do we reduce carbon emissions?
One suggestion is carbon accounting, which qualifies the number of greenhouse gases produced by a company or organization and measures which part of the company's operation is responsible for the emissions. Energy Transition is another effort being used to reduce carbon emissions. Energy transitions invest in renewables and lower carbon energy resources. Additionally, another proposed way to lower carbon is through marginal abatement cost curves. These enable visualization of abatement opportunities and show their relative cost and abatement potential on a similar basis.
The third and last presentation on January 5th, 2024, focused on the gap between academics and practice. One undergraduate academic program has two Supply Chain Management management-related courses and neither mention resilience or resiliency, nor did any other undergraduate accounting courses.
This is ongoing research that has yet to be concluded, the information provided is current information from recent presentations.
