Focus Management Group: January Month in Review
Each month we post an overview article that covers our recent company articles, announcements, and insights. Below is for the month of January.
How Does a Business Deal with Supply Chain Issues in 2022?
Statistics show that businesses should expect their supply chain cost stresses to continue throughout 2022. The labor issues coupled with transportation costs will contribute to financial stress and to timeline planning and delivery issues. The financial impacts of the supply chain cost increases will stress the financial performance of the company.
The timeline issues will also result in working capital stress as businesses struggle with the tradeoff between costs to carry raw materials and finished goods versus the risk of being unable to meet order demand. In contrast to just in time inventory methods, businesses are now feeling the need to increase levels of raw materials and finished goods to ensure the ability to produce and ship orders on time.
What tools should a business use?
How Does a Business Deal with Labor Issues in 2022?
The labor market is continuing to be problematic for businesses. The December unemployment rate was 3.9%, which shows a continuing improvement over the 4.2% reported in November and the 4.6% in October 2021. The labor participation rate in November and December was 61.9%, which is also a slight improvement over 61.6% in October.
The good news is that the overall labor situation did not become worse in December, but the bad news is there is a long way to go to return to the pre Covid-19 performance levels.
The unemployment rate is continuing to reduce from the peak Covid-19 shut down levels. However, the labor participation rate is not increasing back to the pre-Covid-19 levels.
Read the article below for strategy ideas!
Focus Management Group: Top 10 Articles from 2021
2021 was a challenging year for businesses, and most are happy to be done with 2021 and looking forward to 2022. We see headwinds in the trends that last year were considered emerging, but that doesn’t mean businesses need to struggle or fail. There will continue to be challenges but we can work through them using creative tools and financial analysis.
This is a time to look forward with optimism grounded in analysis and problem solving approaches. In addition to the basics - cash flow management, operating cycle management - it is time to consider price volume variance, sensitivity analysis and alternative scenario planning for impacts related to inflation, commodity prices, labor issues and supply chain concerns.
Throughout 2021, we covered all of these trends and offered many great strategies to overcome the difficulties and ensure success for a business. Let's take a look at the top 10...
How Does a Business Deal with Inflation in 2022?
As companies and lenders evaluate performance risk and expectations for 2022, the trends previously considered to be emerging need to be considered a permanent part of the 2022 business environment.
At this point, it is unrealistic to consider inflation transitory, and businesses will need to develop tools to plan for and manage through an inflationary period.
In this article we will first review the inflation indicators, and then discuss approaches business management can take to survive and thrive in this environment.