Get a Hedge on Inflation

The last time the world saw a PPI (Producer Price Index) spike like this in the was in 2008, during the Great Recession. Inflation makes it more difficult for companies to produce their products, find labor at affordable rates, and continue using the same systems that brought them success. Basically, it's time to recalibrate. 

Here are some tips for taking a new look at your business so you can weather this inflationary storm:

Enhance Visibility & Clean House:

Take another look at where money is being spent within your company and who's  spending it. In an inflationary period, it is critical to have a high-resolution view of all the different avenues your company's money is going down so that you can analyze the efficiency of that spending. This is the foundation for all other productivity efforts.

Next, take a look at everything in your portfolio and see where you can make some cuts. This time is all about prioritizing. Try bundling or unbundling existing products, either to create new value propositions or to bring customers lower prices goods that they need. Remember, your customers are suffering from inflation too. How can you position your product or service to work for the both of you?

Reduce the Work:

A Forbes article from February says the labor shortage is getting better but according to articles recently published this month, that may not be the case. Some experts believe that this shortage will last at least through the end of this year, if not longer. Which means the hiked up labor costs are not going anywhere.

Eliminating the work itself will ultimately have more impact on your bottom line. This approach forces companies to scrutinize both what activities are performed and how those activities are performed, with specific levers to eliminate unnecessary work and automate.

Eliminating work can take many forms. Snack maker Mondelez International is well on its way to streamlining manufacturing by eliminating one in every four products in its portfolio, a goal it set in the opening months of the Covid-19 pandemic. Hotels everywhere are limiting housekeeping by making it an opt-in vs. opt-out service.

Automate:

This is a tough one right? For a long time we have gushed about the value of job creation and now all of a sudden, we're being advised to automate! Automate! Automate! How times have changed. 

Research has shown that companies which had invested more in automation before the pandemic have weathered the crisis better than others and they’ve generated higher revenues and experienced fewer disruptions to their supply chain, workforce productivity, and demand. Ah, the gift of foresight. 

When David’s Bridal debuted its Zoey messaging concierge service in early 2020, it reduced contact center operating costs by over 30% and shifted 30% of appointment-booking phone traffic out of stores, allowing employees to focus on providing more value-added in-person services.

Have you been struggling to find employees that stick? Have you put some thought into adding more automation into your business? Have you been on the fence about cutting out one of your lagging products? Now is the time!

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