Inflation and price increases have been steadily rising due to the War in Ukraine. Labor costs are increasing, international supply chain problems are appearing, and a host of other global problems have appeared. The global supply chain will be threatened for years to come. In the US, inflation due to labor and energy costs is skyrocketing, seemingly leaving no end in sight: 85% of small business owners say they are concerned about the impact of inflation on their business, up from 74% last quarter.
Manufacturers are battling with increased prices of raw materials, labor, and more. It has become extremely important for decision-makers to turn to data to derive meaning and take action. A critical plan should be in place in order to increase supply chain inventory optimization at the right time.
3 Tips for Too Much Inventory on Hand
Check out a few inventory reduction strategies that allow manufacturers are able to see reduction at the right place and time in the wake of record-high price increases:
Businesses need mass amounts of data from customers and the supply chain to get the fullest picture of their organization. This will provide clarity on where critical stoppages and margin losses are happening. Maintaining accurate inventory records is a crucial step to knowing when and how to reduce inventory to optimize warehouse space and keep costs low.
ERP’s and data lakes must also be integrated with different departments across your organization (sales, supply chain, etc.). This will help gain the fullest picture of how your business is performing across key sectors.
Automation & Proactive Alerts
Companies are increasingly relying on automated alerts and insights to gather critical insights into their supply chain. According to the annual MHI Industry Report, AI has a predicted adoption rate of 74% in five years, and 64% of companies are increasing supply chain investments. Price increases must be captured and analyzed in order to make critical decisions in real-time.
Proactive alerts on previous and future price increases to the effects at every assembly and sub-assembly level of raw materials deliver the advanced visibility to make agile and fast decisions.
Integrate Your Organization
Evaluating sales and orders performance across customers is a tough question that companies are asking after enormous price increases and labor costs. Proactive insights and data sets allow you to look at where to allocate your resources, and where to prioritize for future price increases.
As long as businesses are capturing data from these critical parts of their organizations, AI has the power to crunch this data. AI will provide proactive insights into the tough questions around supply chain and inventory reduction strategies amid record high inflation and price increases. Often this info can reveal which customers you should prioritize. This can give your business a sense of how to deal with these problems in the future.
Ready to talk about integrating AI into your ERP? Request a demo to see how to save money and time in your supply chain.