While the September 2024 CPI results showed signs that inflation may be easing; companies should continue proactively implementing cost-saving measures.
Stay Vigilant: Whilst inflation shows signs of easing; companies should continue implementing cost-saving measures to maintain profitability.
Supply Chain Focus: Tariff risks under President-elect Trump may directly or indirectly affect Australia and Australian companies. Mitigate supply chain vulnerabilities by diversifying suppliers and investing in technology. Have a Plan B. Consider using tools such as scenario planning to understand supply chain vulnerabilities.
Pricing Strategies: Regular price reviews are crucial. Avoid revising prices only once a year; as this exposes companies to sudden cost increases.
Cost Control: Leverage the 80/20 rule by targeting high-impact areas for cost reduction. Don't overlook indirect or tail-end expenses; which can be substantial. If internal resources are limited; consider outsourcing to third-party experts who can work on a contingency basis.
Wage Management: In the current high-cost-of-living environment; wage demands are unlikely to ease. Consider other non-monitory benefits that may appeal to employees; and plan accordingly.
Companies should continue adopting a proactive cost management approach to manage uncertainties. Scenario planning is one helpful tool for understanding vulnerabilities and planning options.
"If you're concerned about any specific areas of cost management; reach out for a chat. Most businesses know there are savings within their cost base; but often; they don’t know how to get those savings; or it’s too time-consuming.”
Grant Morrow
Principal Consultant
+61 415 203 575
gmorrow@eragroup.com
