Inflation rose to 7.9% in February and continues to soar! Russia invaded Ukraine and trade has been halted. Oil and gas prices will continue to rise and seem to have no end in sight with some saying it will get to $200 a barrel. The U.S. does not currently have policies that encourage additional production of oil and so the government is looking at purchasing more oil (that isn’t as environmentally friendly as U.S. oil) from countries like Venezuela and Iran. Depending on what happens, $200 might not be outrageous. Prices for commodities and agricultural products are rising rapidly for many reasons including the reduction in exports from Russia and Ukraine. What should we do?
Listen to more about these types of issues and why store shelves are still empty in my Shark Bite Biz interview.
What Should We Consider and/or What Impacts Could Arise?
Get on top of and take control of your business ASAP! Talk with customers and understand changes and potential changes to their business. Talk with suppliers about the same topics. Think through changes you could make to your supply chain network. Should you increase purchases before inflation takes hold for critical materials? Are your suppliers dependent on unstable parts of the world? What strategic stockpiles of inventory should you put in place? How about strategic capacity? In essence, build a SIOP process, upgrade your planning processes, and get on top of your manufacturing and supply chain situation so that you can make smart, proactive decisions and get ahead of your competition.
Please keep us in the loop of your situation and how we can help your organization successfully navigate the increased volatility and chaos and thrive in 2022. Several of these types of topics are included in our new eBook Thriving in 2022: Learning from Supply Chain Chaos. Insights from 22 Trusted Advisors Download your complimentary copy.