Inflation-linked threats to a supply chain could be incredibly detrimental to businesses, a Forbes report has argued.
The report, based on information from Oxford Analytica, said that some threats now surfacing as a result of the high inflation could be absolutely crucial to a company's production, and need to be countered.
One way of defending a company is to integrate upstream, the Forbes report suggests, but lists a few other options to consider beforehand.
Hedging is one way to save costs if the threat to a business is volatile prices. Southwest Airlines in the US, for example, pays up to 30 per cent less for its fuel than some airlines thanks to this tactic of buying more when prices are low, and retaining stock.
With rising commodity prices and a tightening of credit availability, firms are finding they have less maneuverability when problems strike, and in industries such as haulage, where the number one cost is fuel, which is rising uncontrollably, it is easy to see how a supply chain can be pivotal in the success of a business.
