Tag Archive: recession

Are You Waiting Too Long to Future-Proof?

February 10th, 2020

Although most economists do not see an immediate recession, there are plenty of concerning signs along with global volatility. Unfortunately, concern alone can create a recession unrelated to underlying factors. Meaning, we could have terrific fundamentals and results yet still go into a recession if fear takes over! I wouldn’t want to be dependent on avoiding fear in the marketplace. Would you?  This is why it’s important to future-proof manufacturing operations and the extended supply chain!

The worst thing you can do is wait for a recession to act. It is similar to a natural disaster. For example, when my house burned down in a fire, I was fortunate that it was an isolated incident. I was able to find alternate housing nearby while the house was rebuilt. I was also able to gain priority with a builder, etc. Instead, if I was caught in one of the devastating California fires, I would be one of many people struggling with the aftermath. Of course, I would be a pebble in a sand quarry in that case. The same is true would be true with a recession, global unrest or a natural disaster. Have you thought through how you will continue operations to satisfy customer demand?

One Tip to Implement This Week:
We’ll make this quite simple: Stop and determine if you have backup plans at a minimum.

Think through the following:

  1. Sources of supply
  2. Resources, skills and trusted advisors who support the business
  3. Operations
  4. Logistics infrastructure
  5. IT and ERP system infrastructure

What are you going to do about it? Are you willing to invest in future-proofing? I’d be willing to bet that any executive willing to make prudent investments in future-proofing might have to take a temporary ‘hit’ with the initial investment but will surpass the competition by a minimum of 10 fold in the future.

For example, one of our clients thought about what they should do to get ahead – not just survive. When the competition was increasing capacity in China, our client was moving out of China and into Vietnam. They were ahead of the curve and had far less roadblocks and bottlenecks along the way to overcome. There is definitely something to be said about being early to the party and leading the way.

Think about taking a calculated risk to lead instead of follow. In today’s Amazon-impacted world, you cannot afford to be a follower!

 



2019 Predictions Report: What to Expect and Where to Focus

March 26th, 2019

I’m thrilled to launch our 2019 Predictions Report, “Manufacturing & Supply Chain in the New Normal: 2019 Predictions from Manufacturing & Logistics Executives” discussing what to expect and where to focus.

We assembled this based on these types of questions:

  • How do we increase profitability in today’s new normal environment?
  • Do we see growth or recession? Or something in the middle? What should we do?
  • There are so many technology options with the promise to transform entire industries. Should we be pursuing? Which ones?
  • Customers expect quick delivery with changes along the way (even while intransit), excellent on-time-delivery (OTD) results and more. Where should we focus?
  • Trade wars and global sourcing – what to do?!
  • How is it trending in our industry? Are there any hot buttons, like talent?

Discussions with several manufacturing and logistics executives and experts are included in the report. Feel free to pass on this link to colleagues and friends to get a free copy of the report.

With that said, since you are already on our newsletter list, here is a direct link just for our newsletter subscribers.

Thank you to our clients and colleagues who participated with their predictions and advice! Please share your feedback. We would love to gain your insights, concerns etc. We’ll incorporate into our upcoming interview and article series.



The Resurgence of Manufacturing – it’s up to you!

February 20th, 2014
Resurgence of manufacturing is occurring if we choose to take hold of it!

Resurgence of manufacturing is occurring if we choose to take hold of it!

As I recently attended the Manufacturing Summit in the Inland Empire and have been preparing for my Association of Operations Management Inland Empire Chapter’s 2nd Annual Executive Panel & Networking Symposium entitled “The Resurgence of Manufacturing & Logistics in Southern CA”, it’s become readily apparent that resurgence is occurring if we choose to take hold of it!

As most manufacturers suffered during the recession and haven’t seen robust growth since, it seemed appropriate to discuss what my best clients and contacts are doing to jump on board the resurgence. There are a few key strategies they have in common: 1) Focusing on the export market. 2) Investing smartly. 3) Leveraging relationships.

1. Focusing on the export market: Undoubtedly, the manufacturers and distributors growing most rapidly have export business. It’s not required to grow yet it certainly jump-starts dramatic growth. For example, according to one manufacturer with export business, the last two months have been 30% higher than last year. Not too shabby!

While listening to an export panel at the Manufacturing Summit, I learned that significant growth is not uncommon especially with Made in the U.S.A. products. This is especially true in industries regulated by the government such as by FDA. International consumers are quite interested in these types of products as they can “count” on the quality.

As the vast majority of the world’s population resides outside of the United States, it only makes sense to expand internationally. There are programs designed to support companies interested in exporting; thus, the opportunity exists if we are interested in taking advantage of it. Sure, there are additional complexities; however, you can avoid issues with a bit of common sense and research.

2. Investing smartly: Certainly during the recession, I had trouble finding companies interested in investing – in anything. No ERP system upgrades. No capital equipment. And in several cases no cash outlays even with huge returns (like 10:1 or 15:1 returns on investment). However, I’ve found studies from ALL past recessions inclusive of the Great Depression that has proven the opposite – in essence, those companies that invest during these times of crisis leapfrog their competition.

Of course, if you took advantage of the recession to make smart investments when your competition didn’t, you’re likely growing rapidly in comparison. However, if you haven’t, all is not lost. I find that although my typical clients have more cash, they are still a bit reluctant to spend it in today’s environment of volatility. In general, they are starting to put their toe in the water; thus, if you’d like to join the resurgence, jump into the water for solid opportunities!

3. Leverage relationships: It might be hard to understand how relationships can be a key to success yet it has proven time and again to be so! In today’s new normal business environment, it is not nearly as simple to grow sales and increase profitability as it was during the boom years and when supply chains were less complex.

In my experience, those companies that partner with suppliers and customers to elevate the entire supply chain not only perform far better than the rest but they also generate additional revenues by virtue of a relationship-orientation. People purchase from those they respect, like and trust. How can they do that if they don’t know you? Or if their only interaction is when you try to negotiate with a win-lose approach? Additionally, as supply chains are increasingly complex with elevated levels of risk, who will you likely support when issues arise?

It is an opportune time to join the manufacturing resurgence. The good news is that it requires working smarter; not harder. Why not put a plan in place, rally your team around it and give it 120 days? You’ll be glad you did.

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