The price of practically everything is on the rise.1 That hardly does our situation justice. It’s more honest to say that commodity costs are already through the roof, and both businesses and consumers are beginning to face this harsh reality. Don’t expect prices to come down anytime soon. Instead, plan ahead to manage skyrocketing commodity costs by making these five seemingly simple yet innovative changes to your business.
1. Start Using Inventory Control Software
To make everything we’re about to discuss on this list work, you need to start using advanced inventory control software. That’s not to say it has to be the most expensive solution or anything like that. It’s just that it’s much easier to implement these sweeping changes when you’re not limited to Excel spreadsheets or other manual forms of keeping track of your inventory. You’ll see why as we go on.
2. Compare Multiple Vendors
No two vendors are exactly alike. Each one has its strengths and weaknesses. That’s why it’s important to record your dealings with each one and see how they perform and which you would prefer to continue doing business with. For example, which ones offer volume discounts, favorable payment terms, consistent on-time deliveries, etc.? You might have to compromise in certain areas to get the results you want in others. If you use inventory control software, you’ll be able to spot trends in your supply chains and make informed decisions by comparing vendors.
3. Work with Local Vendors
It’s not just the cost of finished goods that is going up. The means by which you obtain them is also becoming more expensive. With fuel costs rising rapidly in many parts of the country, it is a good idea to try to keep your supply chains as local as possible. Shipping costs are an important factor to bear in mind as you select your preferred vendors and streamline your supply chains. Again, this will be a balancing act where you might have to settle in some areas to do business with local vendors who can give you the service or prices you need.
4. Streamline Supply Chain Management
There are a number of ways you can streamline your supply chain management. Set up automatic reorder points with default vendors for each item in your inventory. Then you won’t have to worry about stockouts or unnecessarily high carrying costs. Assign tracking numbers to each shipment to make sure you know how each one is proceeding, and you’ll be able to respond swiftly if the shippers run into any disruptions.
5. Integrate All of Your Business Solutions
Most businesses use a variety of software to handle different aspects of their operations. These include accounting, customer relationship management (CRM), ecommerce, electronic data interchange (EDI), shipping, and third-party logistics (3PL) solutions. If you use advanced inventory control software like Fishbowl, you’ll be able to integrate all of them together.
For example, when you receive an online sale, your inventory software can tell your accounting software to generate an invoice, send it to your CRM to record under the customer’s profile, inform your 3PL about the purchase, notify a shipper that a package is ready to be shipped, and use an EDI to convert sales orders into the format that a big-box retailer requires. These integrations save time and money, allowing you to focus on running your business as efficiently as possible.
What You Can Control with Commodity Costs
You don’t control the country’s monetary policy or the prices that manufacturers have to charge to cover their costs. But you can control many aspects of your business in order to make every dollar count. Tough times are on the horizon, but don’t worry, Fishbowl has you covered. Whether you’re in the best market or the worst, Fishbowl has the tools you need to control your inventory, manage supply chains, and much more to succeed.
Sign up for an online demo of Fishbowl today to learn more about how it can help you cut costs and cope with skyrocketing commodity costs.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.