These Articles Might Able to help you: June 2008 Archives

Waiting for fuel costs to fall? Dream on.

There's a fundamental shift underway in the cost of doing business: this could be the greatest challenge of the decade. Attention has to be focused on three areas: direct supply costs, customer experience and the impact on staff.

Costs go under the microscope
Last time there was high inflation (in the 80's), much of it could be passed on to customers - raising prices was a sport. But when fuel prices multiply by four, this is not a game. Even cheap consumer goods and machinery will take a hit. As an example*, it now costs $8,000 to send a container from Shanghai to the US East Coast, compared to $3,000 in 2000, and similar rises have hit Australian and European importers. Goodbye cheap tableware, furniture and linen.

Delivery charges are now a cost centre. Free, fast delivery used to be the norm. Now there are minimum orders, fuel surcharges and other add-ons. Have another look at minimum quantities and par levels. Do methods that relied on 'a little and often' still make sense? Does everything have to be delivered within 24 hours?