Highest inflation in 40 years! All prices are up an no one can dodge the consequences anymore, not even you. But how are our companies responding to rising commodity prices? Steel – a widely used material for the construction of our infrastructure – also has large price hikes. The Reinforcing Steel Index of the Belgian Association of Metal Traders (Belmetal) is more relevant than ever. At Belmetal's request, Power Partners developed a Power BI dashboard to make their automated rebar index available online to everyone. The visualisation of the various indexes and their automatic calculations are a real added value for the user. In other sectors, too, we hear the pressure of rising (raw material) prices.
- Title: Public dashboard on website
- Client: Belmetal
- Budget: 3 days
- Data: Excel
Contents
Price index - IABSI
Since the beginning of this century, Belmetal has published its findings on the price fluctuations of steel in the form of a (price) reference index. Every week, members of the association anonymously report their latest price changes and the data of the index are automatically updated.
Today, suppliers, customers (and also you) can monitor these fluctuations by means of a Power BI dashboard. The professional association opted for a visual and transparent approach. Not unimportant when you know that steel prices are skyrocketing.
You can find steel, but only at phenomenally high prices.
ALEXANDER HODAC, CEO CONSTRUCTION COMPANY BPC GROUP in De Tijd
Numerous events contribute to this price increase: Corona lockdowns, increased money supply, war in Ukraine, transition China from a net steel exporter to net importer... and so on.
The US, China and Europe have already announced that they will continue to modernise their infrastructure on a large scale.
According to analysts, these high prices will continue for a while, as a professional association it is better to communicate transparently about price fluctuations. And where better to do this than on your own website? With an interactive dashboard!
On the positive side, the members of Belmetal indicated in a recent survey that they could find their products, albeit with more difficulty.
Domino effect in construction industry
But the steel distributors are of course not isolated, they form an important link in a long chain of construction companies. A letter that ArcelorMittal sent to customers in the Benelux at the end of February sent sent shockwaves through the construction sector. High steel prices mean problems for developers and contractors, who often have concluded permanent contracts with the client.
All current offers expire immediately.
STEEL COMPANY ARCELORMITTAL, LETTER TO CUSTOMERS, 25 FEBRUARY 2022.
The explosive situation poses a serious challenge for Belgian construction companies. Developers and contractors include clauses in their contracts in the hope of passing on price uncertainty to the end customer. In the journal there are fragments of garden contractors who tell about the new validity period of their quotations, which is now 1 day. Can this continue?
Global inflation
But it's not just steel. Oil, wood, gas, food prices... all prices are going up and the purchasing power of families and businesses is falling drastically. 'Due to the immense investments in energy transition, the demand for steel, aluminium, nickel, copper and cobalt remains enormous. Even in the event of a global slowdown, metal prices will remain high', warn commodity specialists.
With 2% inflation per year you can grow with the market, with 8% you are completely pushed into the corner. I am convinced that there will be a lot of consolidation in the construction industry.
AN ENTREPRENEUR DURING OUR BI CONSULTING
According to the ECB, the world may be on the eve of a new inflationary era. Does it get worse before it gets better? We cannot look into the future. What we can do is prepare for it, by looking at data from the past (for example in the IABSI) and combining it with forecasts for the future.
Preparing for the future
In the short term, inflation can be (partly) passed on to customers via price increases. It then helps to communicate clearly and make certain data public (see IABSI) or even to take it with you at the negotiating table. In a slightly longer term, as an entrepreneur you can also be better armed against such turbulent times. For example, you can develop a helicopter overview of your activities and detect problems at an early stage by means of targeted KPIs.
Normally we conduct price negotiations 1 time a year. This year, our sales team has already visited our customers 4 times. We always get the price increases we ask for, as long as the transport remains guaranteed.
MANAGER TRANSPORT COMPANY
But how do data-driven entrepreneurs prepare for the future? We give some examples of business intelligence projects that have received increasing attention in recent months in the light of the inflation problem.
Project efficiency
Rising cost prices make it even more important to be "on top" of your projects. Think of companies in the construction sector where many projects are often completed at the same time. Monitoring budgets, profitability, hours... In periods of inflation, it is crucial to be able to respond quickly to budgets that get out of hand. Then it does not help if the analysis of your projects comes in the form of an Excel file, weeks after the project has been completed.
'Today, as a contractor and developer, you sail blindly'
DAVID DEGROOTE, CO-CEO VATSGOEDGROEP DEGROOTE in De Tijd
More about project analysis dashboards in construction can be found here. You can read how you can monitor the evolution of your project costs on a daily basis.
Stock rotation
Another aspect of the company where data is often used is inventory management. You can strive for a "perfect" stock (rotation). This ensures that your company can always respond to new opportunities without holding unnecessary and expensive stocks. The data can also be used to negotiate better agreements with your suppliers or financiers. The Belmetal survey shows that this is also an important point for steel distributors.
We are currently working on an example dashboard around stock rotation, more about this soon on our website.
Cash flow analyses
A striking common thread in our conversations with (new) customers is the focus on cash flow. More and more companies are developing targeted plans to monitor and optimise cash flows more closely. The demand for better cash flow reporting from banks and financiers is also increasing before new loans are granted.
Where in the past many dashboards revolved around profit forecasts, in recent months we have seen more and more entrepreneurs (and investors) who want liquidity analyses.
JULES VANDIERENDONCK, POWER PARTNERS
Our German-speaking customers have even developed a specific cash flow KPI + dashboard . More info about cash flow analysis in Power BI can be found here.
An offer for you!
Let's talk about Power BI, data and reporting in your business. In a video call we will see if Power Partners can help make your company more data-driven. Completely non-committal and confidential.
