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How does global inflation affect the supply chain and how should it be dealt with?

How does global inflation affect the supply chain and how should it be dealt with?

AnalysisSoftwareTop StoriesTrade & Logistics

Applied logistics intelligence can optimize the processes within the supply chain to avoid high-cost increases for end- customers.

The rising cost of living and the dollar increase represents issues with a straight impact on salaries, affecting their ability to purchase goods and services.

This situation directly impacts the companies’ production costs, which increase because manufacturers must pay more for the necessary inputs to make their products. It generates an increase in the price for the end-user.

In addition to the above, global inflation, the rising dollar and other economic variables that generate interruptions in the supply chain further worsen a scenario in which it is already complex to access certain materials or products, given that they are produced, especially in some areas of the world.

To minimize price increases and avoid passing them on to customers, companies can effectively optimize their resources in the logistics process.

What is the role of technology in this scenario?

In a scenario of high accrued inflation, it is common for companies to be required to increase the costs of their products or services to maintain a healthy revenue margin for operations.

In this sense, transporting products and raw materials (either from suppliers to the production place for transportation between distribution centers or delivery to their final customers – the so-called last mile) is one of the most expensive processes in a company’s operation. It is due to the need for large cargo vehicles that run on fossil fuels, a resource particularly affected by this type of economic phenomenon.

Technology, in this sense, is an ally in the search for savings because it allows an efficiency that would not be reached manually.

How does it work?

Optimized planning delivery routes should not waste fuel in the process, thus reducing logistics costs and increasing the satisfaction of end-customers by providing them with their products in a shorter time.

SimpliRoute is a company dedicated to logistics intelligence, with a presence in Latin America, which offers functionalities that improve the service to the routers and those who receive the deliveries. By allowing real-time monitoring of vehicle routes and communication through messaging, it provides better traceability, security and detailed reports on the operations of companies so that they can make decisions based on their data.

The current inflation that our economy is experiencing is a reality, but what is an option for companies is to optimize their operations with the help of technology, algorithms, Machine Learning and Artificial Intelligence (AI).

Moreover, the costs of this software are not high, so it is possible to recover the investment as soon as the software is implemented.

Mitigating the damaging effects of the complex economic scenario we are currently experiencing is within reach of companies. The final customers, who receive this accumulation of increases, will be grateful.

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