{"id":46936,"date":"2023-02-22T17:03:50","date_gmt":"2023-02-22T22:03:50","guid":{"rendered":"https:\/\/www.arffinancial.com\/development\/?p=46936"},"modified":"2023-02-22T17:04:54","modified_gmt":"2023-02-22T22:04:54","slug":"how-to-plan-for-rising-supply-chain-costs","status":"publish","type":"post","link":"https:\/\/www.arffinancial.com\/development\/how-to-plan-for-rising-supply-chain-costs\/","title":{"rendered":"How to Plan for Rising Supply Chain Costs"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_single_image image=&#8221;46937&#8243; img_size=&#8221;large&#8221; alignment=&#8221;center&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Despite unemployment being at historic lows, consumer confidence is <a href=\"https:\/\/www.conference-board.org\/topics\/consumer-confidence\">still decreasing<\/a>. The economy is also uncertain. Manufacturers faced a lot of challenges over the past few years, much as a result of the COVID-19 pandemic and major disruptions to the supply chain; throw in the unrest between Russia and Ukraine, and all signs point to an uphill battle for nearly every industry. But let\u2019s home in on the supply chain for today. In a <a href=\"https:\/\/www.nam.org\/wp-content\/uploads\/2023\/01\/Manufacturers_Fourth_Quarter_Outlook_Survey_December_2022.pdf\">recent survey<\/a> from the National Association of Manufacturers, \u201csupply chain challenges\u201d ranked second in the list of top manufacturer concerns, right behind \u201cattracting and retaining a quality workforce.\u201d What\u2019s the best way manufacturers can plan for the rising costs we\u2019re sure to see in 2023?<\/p>\n<p><strong>Planning + Communication<\/strong><strong>\u00a0<\/strong><\/p>\n<p>Demand forecasting is an important piece of the manufacturing pie, to be sure. Manufacturer\u2019s that have a comprehensive understanding of their business\u2019s demand forecast are already ahead of the game, as this makes it easier for teams to predict upcoming demand and get production and inventory on the same page. This is also in ideal time for companies to lean on their network. Having a close relationship with suppliers opens the door to lower costs <em>and <\/em>greater insight into potential weaknesses in the supply chain.<\/p>\n<p><strong>Knowing Your Customer<\/strong><\/p>\n<p>One of the overlooked areas in cost reduction is truly understanding customer needs. With the help of robust data gathering, it\u2019s easier to predict what your customers are going to want and when they\u2019re going to want it. There is a lot of waste that happens when manufacturer\u2019s over-produce and under-deliver, so basing orders off of actual requirements is a key strategy in cost reduction.<\/p>\n<p><strong>Reshoring<\/strong><\/p>\n<p>The pandemic did a tremendous job revealing a lot of the cracks in the global supply chain.\u00a0 A popular strategy manufacturers are turning to is <a href=\"https:\/\/www.manufacturing.net\/supply-chain\/blog\/22288864\/reshoring-as-a-supply-chain-strategy-the-pros-and-cons\" class=\"broken_link\">reshoring<\/a>, which aims to scale back manufacturing footprints in favor of keeping production locations \u201ccloser to the customer.\u201d There are times when tapping into offshore suppliers is more cost-effective, but as we saw during the pandemic, this can have crippling results when disasters occur. For those in the tech and auto industry, reshoring can save money in the form of tax credits, too: The <a href=\"https:\/\/www.irs.gov\/inflation-reduction-act-of-2022\">Inflation Reduction Act<\/a> incentivizes domestic production of certain materials such as the minerals used to make batteries for electric vehicles.<\/p>\n<p><strong>Consolidation and Negotiation<\/strong><strong>\u00a0<\/strong><\/p>\n<p>Larger manufacturers could have hundreds or thousands of suppliers, and that eats up a ton of time and money. Taking inventory of vendors and making data-driven decisions on consolidation can save a lot of cash in the long run: less vendors means a reduction in workload and greater process efficiencies. And with the consolidation of suppliers, manufacturers are in a better position to negotiate lower pricing and improved payment terms.<\/p>\n<p>With the right strategies in place, the manufacturing industry can avoid being caught off guard when the unexpected happens. Remember that preparation is key. And preparation in the form of a <a href=\"https:\/\/www.arffinancial.com\/development\/loans-by-product\/revolving-line-of-credit\/?urlsource=blog\">revolving line of credit<\/a> can offer companies a sense of security, giving them the confidence to face uncertain economic times without missing a beat.[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;46937&#8243; img_size=&#8221;large&#8221; alignment=&#8221;center&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Despite unemployment being at historic lows, consumer&#8230;<\/p>\n","protected":false},"author":5,"featured_media":46937,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","om_disable_all_campaigns":false,"footnotes":""},"categories":[868],"tags":[398,402,400,399,443,386,535,220,1060,213,1034,870,872,1033,877,1032,1035,943,173,401,224,222,172,142],"class_list":{"0":"post-46936","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-manufacturing-financing","8":"tag-affordable-business-loans","9":"tag-affordable-small-business-growth","10":"tag-business-expansion","11":"tag-business-growth","12":"tag-business-line-of-credit","13":"tag-business-loans","14":"tag-equipment-leasing","15":"tag-flex-pay-loans","16":"tag-how-to-plan-for-rising-supply-chain-costs","17":"tag-line-of-credit","18":"tag-manufacturing-brown-field-projects","19":"tag-manufacturing-business-loans","20":"tag-manufacturing-expansion","21":"tag-manufacturing-green-field-projects","22":"tag-manufacturing-line-of-credit","23":"tag-manufacturing-loans","24":"tag-manufacturing-revolving-line-of-credit","25":"tag-operations","26":"tag-restaurant-funding","27":"tag-small-business-expansion","28":"tag-small-business-financing","29":"tag-small-business-funding","30":"tag-small-business-growth","31":"tag-working-capital"},"acf":[],"yoast_head":"<!-- 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