This white paper discusses the 7-point plan to help manufacturing companies mitigate cost inflation. The key cost drivers for manufacturing firms include raw materials, direct labor, energy requirements, overhead, and operational costs. Since the pandemic, there have been major fluctuations in the prices of commodities such as oil, iron, energy, coal, and many other raw materials. The market continues to be highly volatile, and in the U.S. and Europe, supply chain disruptions have driven prices even higher. The second biggest factor that impacts costs is labor, which affects COGS directly and has implications on every cost head. The Employment Cost Index (ECI) for manufacturing has risen sharply since September 2021. The paper suggests specific actions that automotive and industrial manufacturing companies can take to reduce inflationary pressure and manage costs.
