Input cost volatility is a topic on every procurement leader’s mind these days. But input cost volatility isn’t new. However, the patterns of input cost volatility certainly seem to be changing.

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In the past, commodity costs would rise, peak, decline, bottom out, and repeat the cycle. That roller coaster-like cycle would often span years. These days, the cycle seems to be much shorter.

We recently saw commodity costs rise and then, in June, take a step backwards as reported in last month’s Leading-Edge Supply Management magazine (the official online magazine of the Next Level Purchasing Association) as well as in my blog post of August 5th. Was that the beginning of the downward part of the cycle?

If you were paying attention to stock market news articles, it seemed to be. But then in July, as you can see in the just-released September edition of Leading-Edge Supply Management, commodities rebounded. (NOTE: for access to the magazine, join the Next Level Purchasing Association, it’s free)

Still, we talk about volatility. No one knows exactly how the next few months will pan out for input costs, but we very well may see the roller coaster pattern of years gone by replaced by more of a see saw pattern. Therefore, I recommend studying as much as you can about input cost drivers.

One resource that I’d recommend checking out is a free webinar coming up on September 21 entitled “How to defend product profits in the ‘new normal’ of input cost volatility” from Genpact. You can learn more about this webinar at
http://www.genpact.com/FinanceAndAccounting/volatility-solutions.aspx.

In these crazy times, you can never learn too much.

Disclosure: Genpact’s procurement outsourcing division is a training customer of Next Level Purchasing. However, the webinar mentioned above was recommended because of its value. No compensation was received for promoting it.