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Material price increases could prompt operations management solutions

22 August 2011
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Material price increases could prompt operations management solutionsCompanies are turning to new strategies in order to counteract the effects on their businesses of rising material costs.

This is the claim made by EEF, the manufacturers' organisation and RBS in a new report, which reveals volatile prices are prompting "radical solutions" among businesses.

As inflation climbs for manufacturers, some may turn to operations management and lean techniques in order to ensure their pricing remains competitive, as the study pointed out that almost half of businesses have redesigned products or processes as input costs climb.

In addition, it discovered that cheaper alternatives are being substituted for some materials and many companies have sourced different suppliers in order to cut spending.

"Whilst most attention is focused on the inflationary aspects of these costs, the flipside is another story of the extent to which companies are finding innovative solutions to deal with them," EEF chief economist Lee Hopley stated.

Ms Hopley recently remarked that trading conditions for the manufacturing industry are likely to become more challenging over the coming months, as domestic demand remains weak.ADNFCR-3058-ID-800706736-ADNFCR
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