Posts Tagged ‘“business cycle”’

Manufacturers’ Crystal Ball—Our 2010 Best Guess

Wednesday, February 3rd, 2010

If we had to sum up the manufacturing community’s attitude in a phrase, it would be cautious optimism. Recently I conducted an informal survey via internet and in person with my manufacturing contacts. I wanted to get a feel for the primary challenges our industry will face in 2010 and make sure we are prepared to help our customers profit from the opportunities we identify.

In discussions with around twenty manufacturers, the number one concern was their ability to meet the need for additional, qualified manpower in the production arena and their ability to predict such an event. There seems to be a general sense that sales will increase leaving them shorthanded but none were confident enough to begin hiring and training employees. Many said the “good problem to have” would be a large, sudden increase in demand for their products. No one I talked to could point to actions they had taken, or documented increases in sales, but all were hopeful.

Several people reminded me that the challenge will be more than just putting bodies in place. Many experienced employees were eliminated in the recent economic downturn. The ramp up to higher production could be troublesome until the new technicians are fully trained. Maintaining productivity and quality levels will be a challenge if the upturn is steep. A significant point is the uncertainty around their optimism. Some manufacturers are experiencing severe cash constraints and most are reluctant to spend until they have hard evidence of a need, even at the risk of lost opportunity on the upside. In addition, there is the risk that any upturn may not be permanent. Companies are reluctant to make manpower commitments if they believe they will be entering the downsizing cycle again in the near future.

Additional concerns are the ability to maintain and improve manufacturing process controls and engineering controls after prolonged operations with reduced technical staff. Continuous improvement activities have been curtailed in some instances and will need to be jump started. The same ambivalence regarding forecasting and timing of investment in manpower applies here as well.

The message for manufacturers is that anything we can do now to insure a faster screening, hiring, training and validation cycle may put us in a more competitive position when and if the upturn comes. Attaining that higher output level a few days or weeks ahead of competitors could present opportunities to capture new business and improve the bottom line early in the business cycle. If the recovery turns out to be a V or W or worse, the watchword will be agility.

That’s Manufacturing Made Easy.

Your Comments are always welcome.

Bill MacDonald is an experienced Operations Manager/Technical Director and owner at
JLS Consulting of Midland, Michigan.

For more information visit our web site www.MFGmadeEZ.com or Email Bill’s Email