Authored by:
Paul Tedford, Chief Executive Officer, WM Synergy
Salmaan Kapadia, Senior Consultant, WM Synergy
Tania St. George, Director of Services, CSI, WM Synergy
Mark Humphlett, Senior Director, Industry Strategy, Infor
Jennifer Candela, Senior Manager, Solution Marketing, Infor
Infor's industrial manufacturing ERP gives manufacturers the real-time cost visibility they need to turn changing market conditions into a competitive advantage. For aerospace and defense suppliers, metal fabricators, and discrete manufacturers, cost pressures are no longer a temporary disruption.
We're seeing three to five times the commodity price fluctuations compared to pre-2020. At the same time, steel and aluminum tariffs have escalated to 50% under Section 232. The Institute for Supply Management (ISM) reports that raw material costs have risen for 22 consecutive months¹. Geopolitical tension and energy shocks continue to put pressure on supply chains. Manufacturers waiting for prices to “come back down” are leaving their margins exposed to the next swing. Meanwhile, the ones insulating themselves are locking in long-term supplier contracts and diversifying sourcing now, before the next swing hits.
That is even before you factor in labor. Wages and benefits are up, and skilled trade labor is scarce in most markets. Wages, unlike commodity prices, don't swing back down. A smarter approach is to automate repetitive tasks while investing in retention for your skilled workforce. You can't run a lean facility with a revolving door of employees.
Energy and logistics are the third pressure point most manufacturers underestimate. Energy-intensive operations (heat treating, casting, and forming) get hit hard when utility rates spike. Freight costs remain unpredictable. Leading manufacturers are responding by building fuel surcharge clauses and energy cost escalators into pricing agreements and renegotiating carrier contracts before they need them, not after a loss shows up at month-end.
The margin math is brutal from every direction at once.
The cost of finding out at month-end
The biggest risk isn't a single cost driver; it's the lag between when costs change and when manufacturers know they've changed.
Most mid-market manufacturers still rely on manual bill of materials (BOM) updates, static standard costs refreshed quarterly (if at all), and, in some enterprise resource planning (ERP) systems, job costing that doesn't close until month-end. What we're hearing from customers reflects these issues directly: make-versus-buy decisions are more common, inventory has become a strategic focus again, and management teams are paying far closer attention to raw material exposure and cost standards than they were two years ago.
And then there's the quoting problem. Static quotes sent months in advance made sense when input costs were predictable. They don't anymore. Forward-thinking manufacturers are building price escalation clauses into contracts, shortening quote validity windows, and moving toward index-linked pricing. Manufacturers still sending fixed-price quotes with 90-day validity in this market are absorbing losses they don't even know they're taking yet.
Aerospace and defense suppliers face compounding pressure. Original equipment manufacturer (OEM) production rate targets are rising while tier-1 and tier-2 suppliers run on 8–15% operating margins with almost no buffer for material swings, expedited freight, or rework. For defense contractors, Cybersecurity Maturity Model Certification (CMMC) 2.0 compliance adds another cost center. For government work, however, that spend is recoverable overhead.
Read: Why legacy systems are holding back aerospace manufacturers
Metal fabricators are also absorbing direct hits. Structural steel projects are tracking up 15.6% over 12 months compared to early 2025.²
According to a recent Manufacturers Alliance study, 77% pass costs through, 50% absorb costs internally, and 41% use surcharges.³
What leading manufacturers are doing differently
The manufacturers protecting margins in this environment share one thing: real-time cost visibility, connected from supplier pricing through BOM to the shop floor. The payoff is measurable: A recent Forrester study of manufacturers running Infor CloudSuite™ found a 114% return on investment (ROI) over three years and a 70% reduction in revenue leakage, driven largely by eliminating the blind spots between quoted cost and actual cost.⁴
We're seeing manufacturers take different paths, but the most successful organizations follow a similar progression. They start by improving the accuracy of cost data, build real-time visibility into profitability, standardize processes across the business, and then use automation and artificial intelligence (AI) to accelerate decision-making. Recent customer experiences illustrate this progression.
American Products, Inc. struggled with limited visibility into job profitability. After implementing Infor CloudSuite Industrial with WM Synergy, the company gained real-time insight into assembly and job performance, enabling teams to identify margin risks and take corrective action earlier. As Chris Tillotson, General Manager at American Products, Inc., put it:
"I can call up any part number that we're working on and instantly tell whether we're making or losing money on an assembly or job and take corrective action, if necessary.”
Brunner recognized that cost visibility required more than better reporting. The company aligned operations and finance around how costs are created and managed within Infor™ ERP, improving work-order discipline, restoring confidence in cost standards, and creating a shared foundation for pricing and make-versus-buy decisions.
Orizon improved inventory accuracy to 98%, achieved 100% job-costing accuracy, and unified five facilities on a single platform, creating a foundation for consistent cost visibility across the business.
Learn more about Orizon’s journey to success with Infor
Diamond Mowers moved from paper-heavy workflows to tablet-based automation, saving 20 hours per week, reducing annual paper costs by $8,000, and gaining real-time inventory visibility.
Learn more about Diamond Mowers’ journey to success with Infor
Different approaches, same priority: getting the cost data right before anything else.
How Infor ERP and AI close the gap
Five years ago, manufacturers bought ERP for inventory management and production scheduling. Today, those priorities have expanded to include financial reporting, automation, and business intelligence. That is where margins are won or lost: through dynamic cost modeling for raw materials, scenario planning for cost changes, and margin protection across product lines.
Modern platforms like Infor CloudSuite Industrial handle the cost visibility problem directly. BOM-linked work order costing attaches materials to each routing operation, flags variances in real time, and automatically rolls price changes through multi-level BOMs, repricing affected assemblies and open quotes as input costs change. Actual versus standard cost variance reporting means you know where you're losing margin while a job is live, not at month-end when it's too late. For manufacturers dealing with changing input costs, the effective approach is periodic revaluation: combining standard and average (or actual) costs to keep numbers current without disrupting the costing model. One of our aluminum extrusion customers does exactly this, rolling standard costs to a monthly average at month-end. Modern ERP also handles fuel surcharges and freight cost escalators as discrete line items, so those costs flow to the right jobs instead of disappearing into overhead.
Enterprise configure price quote (CPQ) tools extend this to the quoting process, automatically aligning pricing decisions with current cost standards so sales teams aren't quoting from stale data. This protects margins across every product line as input costs move.Cash flow and working capital tools are increasingly central to the conversation. Manufacturers with strong cash reserves and revolving credit facilities can buy materials when prices dip and hold inventory strategically as a buffer against the next spike. Those living on tight receivable cycles get squeezed every time costs rise. Strong ERP capabilities help your finance team assess the cash flow impact of rising costs before it escalates.
Closing the books accurately is no longer the challenge for many manufacturers. The challenge is understanding how changing input costs affect profitability while there is still time to act. When material prices, freight costs, labor rates, or tariffs shift unexpectedly, teams need visibility into which products, customers, and contracts are most exposed. Real-time cost and margin analysis helps leaders make informed decisions about pricing, inventory investment, supplier negotiations, and capital allocation before small variances become significant profit erosion.
Your ERP should provide the visibility needed to have informed conversations about cost pass-through strategies, cash flow impacts, and profitability risks before they become a crisis.
With that in mind, many manufacturers are turning to AI to extend those insights. Infor Velocity Suite models cost scenarios, identifies vendor risks, and flags open quotes with material exposure before they hit the shop floor. Most manufacturers tell us they're focused on data quality first, using AI to support better decisions rather than replace them. That's the right sequence.
The analyst view reinforces this: Nucleus Research named Infor a Leader in its 2026 RPA Technology Value Matrix for agentic AI orchestration at scale⁵, and Infor's Enterprise AI Adoption Impact Index, a survey of 1,000 decision-makers spanning industrial manufacturing and four other sectors, found 49% of businesses remain in the early stages of AI adoption.⁶ That is why getting the data right comes first.
The message is clear—organizations need trusted data before they can successfully scale AI. Kattsafe, a global height-safety manufacturer running on Infor CloudSuite Industrial, demonstrates what happens after manufacturers establish a strong data foundation. By deploying Infor Velocity Suite to automate customer order entry, the company reduced order processing time by 88% and eliminated manual errors, allowing employees to focus on higher-value work while supporting growth.
Jamarl Scace,
Digital and IT Lead, Kattsafe
Learn more about Kattsafe’s journey to success with Infor
Three questions every manufacturing leader should answer today
- How old is the cost data in your current BOM? If it's more than 30 days old in this market, you're quoting from a number you can't defend.
- Can you identify, right now, which open jobs have material cost exposure? Your ERP should answer this in hours.
- Are you absorbing cost increases silently, or do you have the data to support pricing conversations with customers?
Technology matters, but the biggest gains often come from helping people make better decisions with information they already have. Those who act on it will protect their margins and move forward with confidence, even when the market refuses to cooperate.
The competitive advantage will belong to organizations that can see cost changes first, understand the margin impact immediately, and act with confidence. Real-time ERP data and AI-powered insights are becoming essential tools for making those decisions faster and more accurately.
If you are not sure where you stand on any of these three questions, it may be time to evaluate whether your current ERP is providing the visibility your business needs. WM Synergy and Infor help discrete manufacturers build cost visibility, ERP capabilities, and AI-powered intelligence to protect margins and support long-term growth, even when market conditions continue to change.
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About our partner author
Paul Tedford
Chief Executive Officer, WM SynergyPaul Tedford has spent nearly 30 years in ERP, from working in 2 manufacturing companies in the Northeast to working at Lilly Software/Infor to CEO of WM Synergy today, he truly enjoys guiding & helping aerospace, defense, and industrial manufacturers through ERP modernization.
Sources:
- Institute for Supply Management. (2026, August 3). July 2026 ISM® Manufacturing PMI® Report. https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/july/
- Associated General Contractors of America. (2026, June 11). Prices for construction materials climb at highest rate since pandemic, driven by steep cost increases for fuel, aluminum, copper and deliveries. https://www.agc.org/news/2026/06/11/prices-construction-materials-climb-highest-rate-pandemic-driven-steep-cost-increases-fuel-aluminum
- Manufacturers Alliance. (2026, January). Tariff impact update: Evolving manufacturer responses to uncertainty. https://www.manufacturersalliance.org/research-insights/tariff-impact-update-evolving-manufacturer-responses-uncertainty
- Infor. (2025, June). The Total Economic Impact™ of Infor Industry CloudSuite. https://www.infor.com/resources/total-economic-impact-infor-industry-cloudsuite
- Infor. (2026). Infor named a Leader in Nucleus RPA Value Matrix 2026. https://www.infor.com/resources/infor-named-a-leader-in-nucleus-research-rpa-technology-value-matrix-2026
- Infor. (2026, April 22). Enterprise AI Adoption Impact Index finds more than half of businesses struggle to scale AI. https://www.infor.com/news/enterprise-ai-adoption-impact-index-finds-more-than-half-of-businesses-struggle-to-scale-ai