Significant swings in commodity markets are crushing manufacturers across the globe. Geopolitical upheaval in Europe, in addition to the pandemic, continues to fuel dramatic price increases in oil and steel, and many other critical manufacturing components.
These challenges illustrate the need for improved visibility into material costs, but they are also highlighting information gaps or disconnections associated with legacy or disparate systems. This means businesses are often not recognizing increased costs until several months after the actual increase, and while manufacturers may be in close communication with suppliers regarding input costs; these discussions are ad hoc and often specific to the purchasing manager overseeing each commodity. Without a standardized platform to consolidate costing information, organizations often rely on complex spreadsheets that are subject to broken links, data entry errors and overall inefficient management.
An inflation management platform can help manufacturers gain visibility into their material costs and forecast the impact on end products and customers. This platform, paired with recommended processes, can empower companies to actively manage inflation, rather than simply react.
Baker Tilly’s inflation management platform uses standard enterprise resource planning (ERP) data schemas to link into an automated workflow, resulting in a visual dashboard that gives a snapshot of the latest purchasing information.
The platform contains two modules, each aligned with typical business needs:
Businesses can benefit from Baker Tilly’s inflation management platform if the company is:
Recommended processes are also available to support the following typical business activities:
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Early identification of sharp cost increases enables businesses to take action. If no action is taken, companies may face millions of dollars of potential cost absorption. The inflation management platform empowers users with the most relevant information at the right time to mitigate that risk.
To learn more about inflation management, contact one of our Dynamic Costing® specialists.