b'THE OFFICIAL NFBA MAGAZINEINFLATION BUSTERS: PROTECTING PROFITS AS COSTS RISEby Phillip Perry BUSINESS MANAGEMENTInflation is rising faster than any time in recent memory. Businesses must deal with rapid cost increases by managing cash flow and dealing effectively with customers and suppliers. The benefits of inventory reduction must be balanced against the need to maintain critical stock for top customers.I nflation has taken root. Businesses everywherechallenge is all the greater for its unfamiliarity: Its are dealing with annualized cost increases ofbeen 30 years since inflation was much of a player nearly 7%the fastest pace in 40 years andin company planning.significantly higher than the 1.8% average of theExperts dont see relief any time soon. They point past decade. The resulting upticks in operating coststo a number of root causes, one of which is energy. can cause serious damage to the bottom line. With the cost of oil baked into so many things, it Were in a very unfortunate situation now, saidseems we are going to see more significant inflation Bill Conerly, Principal of his own consulting firmin the months ahead, said John McQuaig, managing in Lake Oswego, Oregon (conerlyconsulting.com).partner of McQuaig & Welk, the Wenatchee, Wash., Businesses that have always devoted their effortsbased management consulting firm (mcqw.com). to serving customers and being productive mustHe points to a continuing global disruption in the also start worrying about covering their costs in thedelivery of goods and services as yet another cause. most effective way. That means they need to shiftSupply chain issues tend to create opportunities some of their focus to coping with inflation. Theto raise prices because of the effect of supply and demand. When the former is crunched, prices go up 40 / FRAME BUILDER - NOV2022'