#SupplyChain #inflation #IncreasingCosts #businesses
A burger chain is taking on increased costs caused by supply-chain problems.
But it realizes that people will only pay so much, so increasing prices too much will hurt more.
In an interview with Alexandra Canal for Yahoo Finance. Smashburger President Carl Bachmann said he is trying to manage his costs with great precision. The article was published Feb. 21, 2022.
“You have to take some small price increases, but we were very strategic about that,” Bachmann told Canal. “The key thing here is … managing your freight costs,” he said. “… all those little pieces of the puzzle behind the scenes to counteract the commodities as they continue to rise.”
Bachmann has utilized redundant vendors and global partners to ease supply-chain issues, which has helped curb price pressure, the article says.
Bachmann’s efforts may be easier said than done for some businesses. Because of a worker shortage, labor costs, as well as material costs, have risen. In fact, many of the increases in material costs can be attributed to labor shortages.
If there are not enough folks to load and unload ships at ports, and drive the containers to wherever they need to go, that will increase costs.
In a Feb. 25, 2022, article in The Atlanta Journal-Constitution, business reporter Michael E. Kanell reports that the backlog at the Port of Savannah appears to be easing. There are no more ships queued up in the harbor waiting to be unloaded, he writes. That port, the second-largest on the East Coast, is continuing to expand, which is also helping it move more goods, the article says.
All of these problems were largely activated as a result of the COVID-19 pandemic. Workers who were shut out of jobs for a good while are giving second thoughts to going back to them.
If there are fewer people producing or moving goods, prices will rise.
The news from the Georgia ports gives one a degree of hope that the end may be near.
But, the Russian invasion of Ukraine could put a damper on that hopefulness.
The pandemic may not have brought the world entirely to its knees, but it came very close.
Now, as the disease eases, record numbers of people are going back to work – many under better conditions than they had before.
That has to be considered great news, even though we are all paying more for that to happen.
But, as Bachmann points out in the Yahoo article, you have to manage EVERYTHING. You have to decide whether buying this or that is worth the cost. You have to decide whether taking this job, or that job, will leave you better off than you were.
A lesson here is to learn to make good decisions as early in life as you can. That means that no matter how much you earn at any given time, some of it should be saved for later in life. As your savings grow, they should be invested wisely, with the help of an adviser you trust.
As discussed previously here, you can bring your own coffee to work, as opposed to buying it by the cup. You can bring your own lunch to work, instead of buying it etc.
The little things, as Bachmann says, can make all the difference. To add to that, you can save on little things without always depriving yourself of life’s pleasures. Those pleasures can make life worth living.
Peter