"Net Input Cost Inflation" in Supply Chain - An enhanced way to report Supply Chain inflation
An unprecedented inflation in commodities has created an equally unprecedented situation for enterprises. In India, the WPI has consistently been in double digits over past 15 months or so & CPI has been in single digits, indicates that the enterprises have absorbed larger part of input cost inflation. Supply Chain teams, particularly the Sourcing / Procurement teams have experienced a phenomenon that most of the practitioners have never experienced within their working life - a pandemic followed by sudden spurt in demand followed by trade barriers followed by geopolitical conflicts and in all that an unforeseen material inflation. Post the first few months of pandemic, commodity prices have shot out of the roof, post the Ukraine - Russia conflict even Oil is up 60% or so, agricultural commodities in some case have doubled. During these challenging periods enterprises ability to pass on the input cost to its end consumer has been limited due a post pandemic recovery period. Now wit...