Inflation. It’s everywhere. And it’s the worst it’s been since the early 1980s.
For manufacturers, inflation has always come with a sense of helplessness. It is what it is, now let’s pass the cost on to our customers, who will pass it on to their customers… You know how it goes.
But it’s 2022. It is not 1982. Manufacturers today have powerful inflation-fighting, tech-fueled strategies at their fingertips that simply did not exist 40 years ago.
Here are four to get your wheels turning.
Strategy 1: Digital Deflation
Digital what? Digital deflation. It’s the concept of investing in automation to reduce long-term costs.
Take a look at all of your business’ systems and processes. Identify everything that still requires manual effort. It’s an antiquated example, but maybe your time tracking system still uses a clock and punch cards. Maybe HR still uses paper forms to get new employees on-boarded.
Armed with your list of “things we still do manually” figure out what solutions exist that can fully (or at least partially) automate them.
Yes you will spend in the short term, but the long term savings will return year after year after year… thus helping you fight today’s inflation.
Strategy 2: Examine Your EDI and Order Processing
Processing orders is expensive, costing manufacturers time and money. Labor costs are high and chargebacks from retail trading partners triggered by errors can be crippling—especially during inflationary times.
By automating EDI and order processing, manufacturers can dramatically reduce related costs and chargeback occurrences. Lingo, our EDI and order processing platform does exactly that. It’s easy to use, customizable and backed by a team of developers and customer support pros to help you seamlessly integrate EDI into your existing business systems.
Bottom line, EDI automation is an inflation fighting strategy that saves time and money. It reduces errors, improves traceability and reporting, and strengthens your retailer relationships.
If EDI is an acronym you’re not familiar with, it stands for Electronic Data Interchange. EDI is the electronic communication of business transactions—from purchase orders and confirmations to invoices and shipping updates—between suppliers and retailers. EDI software like our platform, Lingo, saves manufacturers significant labor hours and money. Check out our EDI 101 primer to get more familiar.
Strategy 3: Diversify Your Supply
Many manufacturers started diversifying their supply networks at the onset of the pandemic. COVID shocked the global supply chain in ways no one had really experienced before. Nevertheless, identifying and adding suppliers of different capabilities, capacities or geographies can be a useful strategy towards mitigating inflation.
Strategy 4: Double Down on Digital Marketing
Traditionally, marketing is one of the first departments to feel the effects of inflation-fighting spend reduction. The strategy is most often influenced by a rationale that relies on your product’s excellence (Our product can market itself!) and what are typically big spends (i.e., advertising dollars).
Consider not only resisting the urge to slash the marketing budget but to double down on it, specifically the digital piece.
Think about it. There's a good chance that inflation is triggering your competition to make cuts to marketing. That spells opportunity. If your competition has reduced spending to reach your shared audiences, why wouldn’t you want to fill the void?
But how can you tell if your competition has tightened their marketing budgets? Ask your marketing team. They’ll be able to do some competitive digital marketing recon and come back to you with findings to influence decision-making.
Inflation Won’t Last Forever
While it can feel like there’s no end in sight, inflation is not forever. But by considering tech-powered strategies that can soften it in the short term and create long-term impact on your bottom line, you’ll set business up for success now and into the future.