A perfect storm of conditions from the COVID-19 pandemic have disrupted global supply chains. When 2020 ushered in unprecedented lockdowns and new guidelines for interacting with other people, this reduced industrial activity and overall production numbers.
As lockdowns lifted, consumer demand began to increase. However, shortages of workers, raw materials, and essential components have continued to disrupt the supply chain. Even when items are produced, transportation and distribution times are much higher than normal.
Since global supply chains are strongly interconnected and much of the world still doesn't have the COVID-19 pandemic under control, this means that it's going to take time for supply chains to fully recover.
An accountant can assist with your supply chain management. Here are a few ways an accountant will work to improve your supply chain.
Help You Manage Inventory Costs
Inventory management is tricky under normal circumstances, but when there are numerous issues with the supply chain, it's even more cumbersome.
It's vital to have enough inventory on-hand so that you can quickly fulfill your customer's orders. You don't want your machines to sit idle or to have to pay expensive rush shipping fees to expedite the shipments of parts and supplies.
However, you don't want so much inventory that your storage expenses are unnecessarily high.
An accountant will provide projections that forecast how much inventory you need and assist with deciding how much and how frequently to order (while taking any abnormal factors into account).
Boost Your Efficiency
An accountant will help your company boost its efficiency. When you have enough inventory on hand to provide customers with a quick turnaround, this increases your company's productivity.
You also have high inventory turnover; this lowers the amount that you have to spend on storing supplies, parts, and raw materials.
Enhance Profits and Customer Satisfaction
Managing your supply chain is an effective way to increase profits and customer satisfaction. Your profits will increase because you're able to fulfill more orders while minimizing your storage and transportation costs.
Customer satisfaction levels will improve because you can fulfill their orders quickly and efficiently.
Adapt and Modify Your Supply Chain
An accountant is a useful resource for adjusting your supply chain and modifying it so it's better suited to atypical economic conditions (like those associated with the COVID-19 pandemic).
If it's taking months, rather than weeks, to receive your raw materials and inventory, your accountant will confirm that your projections are examining the right time frame.
They'll also weigh the costs and benefits of any changes to your supply chain, like utilizing different providers or paying more for some items, to ensure you have ample inventory without eroding your profits.
Need help from a CPA with your supply chain management? Contact us today!