Let’s be honest here: There are plenty of problems that every industry faces today. Most of these come in the form of market inefficiencies. These inefficiencies can cost your business more than half its projected revenue, especially if you’re in an industry that tends to be inefficient with its practices. Thankfully, experts have found where these inefficiencies come from and ways to deal with them quickly.
The Finicky Problem With Market Inefficiencies Today
Dealing with market inefficiencies isn’t just throwing money at the problem, hoping it’ll fix things. That can make the situation a lot worse. You need to level and analyze what your business is capable of and apply that knowledge judiciously. In other words, be innovative in what you do and apply it to things that need it the most. Be efficient and prudent. Here are some common market inefficiencies from various industries and some of the best ways to deal with them.
1. Supply Chain Management
The ever-expanding world of supply chains has one of the largest market inefficiencies. This is because it relies deeply on one exhaustible resource: oil. Projections have found that oil would last as long as 2050, but we’d be fighting for scraps by then. However, other industries have it tough because the supply chain in the food industry also requires cooling, which can easily cut their revenue in half.
Hiring a reputable AC company to deal with your cooling woes is the solution. They can check why your cooling is inefficient, find leaks or possible mismanagement of the cooling system, and report it to you. It’s a simple solution to an otherwise complicated problem. As for oil, well, that’s a problem requiring a bit of complexity.
When doing supply chain management, make sure you use various third-party logistics to ship your goods. Ensure that they use a mix of diesel and electric vehicles. First, diesel is the king of supply chains because it tends to be cheaper than any other fuel. Second, electric vehicles are the way into the future, so although these can be more expensive, at least you’re investing in the future of supply chain management, right? Eventually, the cost of electric vehicles will lower, and diesel will rise in years to come, so this gives you ample time to make changes in the way you do logistics.
2. Quality Control
Quality over quantity is a philosophy your company needs to ensure, especially if you’re in the motorcycle industry. Quality control (or quality assurance) is a way to put your business on the map. But, it has some of the most common market inefficiencies today.
As more businesses strive for quality, the more inefficiencies they discover. For example, Indian motorcycle dealers can find a way to buy motorcycles cheaply and sell them at a higher markup, but the quality of these motorcycles can be questionable. So to deal with this problem, they offer lifetime service or at least more years of service for the motorcycles instead. This is a severe inefficiency that requires a proper solution.
A solution to this is not necessarily to build better quality motorcycles but to choose manufacturers that can produce the products in a more consistent and reliable fashion. This is where robotics comes in, and we’re not talking about Skynet. We’re talking about smart factories that use robots to build products like motorcycles. They are far cheaper because robots don’t need salaries (although they require a bit more upfront cash) and are far more accurate in building complicated products like vehicles. So, if you want to ensure that the market inefficiencies of the motorcycle industry don’t get to you, consider hiring a smart factory as your manufacturer.
3. Energy Consumption
Energy is another resource that many companies rely on, and it also depends on oil. So essentially, a resource is relying on another resource. See the market inefficiency there? Yep, and many businesses tend to miss out on that.
Energy consumption, especially for a local demolition company, can cost more than half their revenue. Demolitions are expensive, and that’s why many try to avoid them. But what if there’s a way to reduce that energy consumption without costing you an arm and a leg? Sustainable energy options have always been a way to deal with the problem of a resource relying on a finite resource (aka energy relying on oil). Because this time, a resource is relying on an infinite resource.
Take solar panel cranes, for example. They’re new vehicles being shipped out to demolition companies because they no longer use oil but rather the sun to fuel them. So, instead of waiting for a finite resource to run out, some companies have decided to leap at a more sustainable option. It’s cheaper, and you don’t need an arm and a leg to reduce costs.
4. Waste Production
If there is one thing that almost every business in the world produces, that’s waste. Every business produces waste in one form or another, and dealing with this waste is one of the most common market inefficiencies today. Businesses can’t just dump their waste and be done with it. It requires a process that starts with how you throw your waste.
Dumpsters. It is a great option for sorting and collecting waste, and finding them isn’t too hard. Your local dumpster rental company can provide them for a meager price. The best part is that they can even help you sort your trash to ensure it’s disposed of efficiently. Next up is the water you use. Every business has wastewater, and if you can’t properly dump that, you might as well plot a meeting with your local government because, more likely than not, they will sue you. How to deal with this? Two options: first, hire a professional to do it. It’s far more expensive but puts the weight off your shoulders. The second option is to install water filters to do the process automatically. It’s much more expensive at first but cheaper in the long run.
5. Downtime
Downtime is one of the most common market inefficiencies today, and experts believe it can single-handedly take down the rigging industry. A rigging company relies on the proper and efficient execution of tasks from top to bottom. What happens if there is downtime for any of these things? Revenue goes flying out the window.
If you have a rigging company, you must avoid as much downtime as possible. This requires proper work scheduling and hiring efficient and experienced managers to do the job. You should also consider buying new pieces of equipment for your company. Sure, rentals can be cheaper, but having your equipment can help reduce the cost of rentals in the long run. Better yet, use both: buy cheaper pieces of new equipment while renting those that tend to be expensive, like heavy-duty hoists. This way, you can avoid the high maintenance cost of heavy-duty equipment while taking advantage of cheaper rig equipment that doesn’t require as much maintenance as the rest.
6. Overproduction
What does inefficiency mean? It means using more resources that do not translate into higher revenue. That’s the simplest way to explain overproduction. Before, many food manufacturing companies produced more, which meant earning more. But they soon realized that isn’t the case, especially when there’s competition and natural disasters such as the recent COVID-19 pandemic. Overproduction is one of the most common market inefficiencies out there today, especially in the food industry.
So what do you do if you overproduce products in your food company? Well, the answer isn’t that simple. First, you must hire a local commercial refrigeration company to store your overproduced goods. Make sure it’s local because if it’s not, then you’ll have a logistical nightmare. Next up is creating a shipping cycle. You can’t store overproduced goods for too long because that’s illegal and dangerous, especially for fresh produce. A shipping cycle can ensure that your overproduced products are kept fresh until you put them on the market for the next cycle. This is the simplest way to deal with this inefficiency and one you should consider for your food company.
7. Inventory Management
Every industry suffers from market inefficiencies in inventory management, and most of the time, this is due to the combination of all the things we’ve discussed above. Inventory management can be expensive because of time and space. That’s why it’s a far more common problem for companies that store bulky items, such as roofing companies.
A residential roofing company can experience inventory management inefficiencies more than any other business in the market. Thankfully, this can be solved by hiring third-party storage solutions for their company. Roofing can be bulky, and building your storage facility is costly, but by finding someone to store it for you, you can cheapen your storage needs, and unlike food, roofing isn’t perishable. However, ensure you don’t leave your roof in the storage facility for years. Ensure you’re buying roofs as much as you use them and only storing those used in future projects.
8. Maintenance Planning
When we talk about real estate, it’s unavoidable to talk about maintenance planning. Properties require maintenance; if inefficiently done, you’re bound for trouble in the long run. Now, one of the most overlooked aspects of maintenance planning is logistics.
Maintenance requires materials, especially for properties requiring renovation due to common problems like water damage. However, if you work with a reputable trucking company, you don’t have to worry about the logistics of your maintenance. The company can ship all sorts of materials for your maintenance plans. They can also track specific necessities, such as cleaning products, in bulk. This makes your maintenance plans more efficient regarding logistics, reducing inefficiencies when maintaining your properties.
9. Communication Barriers
Communication is one of the greatest sources of inefficiencies in any company, especially in industries that employ people from various backgrounds. Many contractors today, especially in the insulation field, employ people from different nationalities. You must be aware of these inefficiencies when running a local insulation company.
One innovative way to deal with this problem is by integrating digital translators into your company. Software such as Google Translate can now be used on phones, making it far more convenient for immigrant workers in your company to communicate with others. Another way to deal with this problem is to have monthly seminars for everyone to learn the most common languages in your company. English doesn’t have to be the only language people use in your business. By the end of the day, diversity doesn’t have to be hindered by communication barriers. Hand in hand, you and your employees can deal with it in no time.
You shouldn’t shy away from a diverse workforce in your company. Dealing with it is simpler than you think. Have an open mind and apply the solutions stated above. This way you can have a diverse workforce without dealing with the inefficiencies of communication barriers.
10. Lack of Automation
The lack of automation is one of the most important market inefficiencies that needs to be discussed. This inefficiency stems from the lack of proactive investments in your business, especially in the towing industry. Towing has always had its roots in automation; it has always been mechanical.
If you have a towing company, you must use automation daily. This doesn’t have to be concerned with towing, either. Maintenance and other parts of your business operations can benefit from automation. The automation process also includes utilizing AI in your daily processes. This includes using AI in billing and even maintenance diagnostics for your vehicles. Automation is a crucial investment in towing businesses. You must adapt to it and implement it whenever you can. Once you’ve done it, there will be no looking back regarding your efficiency.
The business world is filled with inefficiencies that can be hard to tackle, especially if you’re new to your industry. However, by applying your knowledge from this article, you can enter any industry with confidence. Learn these inefficiencies by heart and find your unique solutions to deal with them by following the framework discussed above.
