Inflation or Transformation?The “Return to Normal” will require thoughtful planning by manufacturers.
Perhaps it was the onset of the COVID-19 Pandemic and supply chain issues that stalled the efforts of many consumer goods companies to achieve a return on their Digital Transformation investment. Or perhaps it was the exuberance of the moment and further evidence of overspending that resulted in the ROI challenges facing some manufacturers today.
As we arguably head toward a recession, not only do we see a change in consumer behavior but a shift in attitude of some of the world’s largest retailers as evidenced in the November 12, 2022, Wall Street Journal headline, “We aren’t going to pay higher prices anymore.” Retailers and consumers alike have had enough. Indeed, sales increase fueled solely by increased prices is simply inflation not organic growth, and high inflation does not support the eye-popping investments made in some recent Digital Transformation initiatives.
The squeezing of suppliers by the likes of Walmart and other large retailers, the slowing economy and working through what remains of an inventory glut will refocus manufacturers on Digital Transformation that not only provides unit growth but more carefully measures transformational success and the return on the dollars invested.
The “Return to Normal” therefore will not only necessitate more thoughtful planning in many areas including production and supply chain, but also one’s approach to Digital Transformation.
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