The world is in awe of the shock and horror of the current events in Ukraine. The detrimental violence and violations taking place bring a halt to the production of wheat, one of the most important export products for Ukraine providing the Middle East & North Africa. This results in all-time high prices, surpassing the economic crisis prices of 2008-2011. In the past century, wheat has been determining factor for the price of energy-rich agricultural commodities and other agricultural raw materials. Now the likelihood of a major price increase is inevitable, of which we are already seeing the beginning.
Taking in account that the prices of raw materials will be volatile for the next two years and that retailers will continue to push to maintain low prices, food processors are at play. Food processors need to monitor their supply chain and their working capital with care to avoid getting stuck in the middle and seeing their operations deteriorate. Sounds like a given, however, the reality of liquidity budgeting is that prognoses are made based on past events and success and cannot foresee future disasters.
Sounds like a given, however, the reality of liquidity budgeting is that prognoses are made based on past events and success and cannot foresee future disaster.
A well-functioning supply chain dashboard that monitors both product flow and liquidity is critical to cash flow and liquidity planning along with managing supply chain complexity. An end2end visibility helps to understand where the goods are at what time, especially in multi-layered supply chains, to optimize inventory. The cash2cash overview of the flow of goods creates the necessary grip on the cash flow in these volatile markets. And of course, forecasting is difficult, but what helps is working with scenarios: what are possible developments that we see, what are alternative movements? What is the worst case and best case? What happens in your chain if prices are at the highest level for two years? What do you need to provide for your continuity? Describe this, try to price this in and budget. The simple fact that you are working on it provides insight and grip. And less chance of surprises.
A supply chain dashboard helps in normal times to optimize returns in the supply chain, however, in these unique times, it can make the difference between a thriving and a failing business. VAA Data Works and FoodInsights jointly offer tooling to quickly and easily create dashboards and budgets based on existing financial and ERP systems. Lack of tooling should never be an excuse for not doing things!
Ready to jump into action for your company’s liquidity? Contact us at firstname.lastname@example.org