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5 Ways You can Benefit During the Recession

Manufacturing Benefit During Recession

Manufacturing Benefit During Recession...

Here are some specific things you and your manufacturing company can do to benefit during tough times…

Review Company Spending and Focus on the Essentials

Comprehensively review your company’s outgoings to see where spending is absolutely necessary and what adds the most value. What generates revenue? Where can savings be made? Try ranking key costs into 1) essential, 2) desirable, 3) potentially wasteful. You may decide to go for 5 categories instead of 3. Get your finance people involved to see where exactly the money is spent. Expenditure that generates revenue later or reduces costs is desirable and is justified. Make decision by visualising this information. List key spends and the amount. Does prioritising the list help? What about getting a cost reduction consultancy in to see where they can drive down your fixed costs, like utility bills and consumables?

Manufacturing Benefit During Recession...

Reduce the Costs tied up in Inefficient Processes

Critically review company processes to see what actually adds value – which stages matter? Involve staff to see what could be improved in your design development processes, manufacturing processes and other processes within the business. Where can lead-times be reduced? Ask staff to volunteer ideas from their specific areas. Redesign processes so they are quicker, more standardised and staff have improved instructions and training. This is the ideal time for staff to undertake improvement programmes such lean initiatives and value analysis. Lock in the improvement culture with Kaizen continual improvement activities. When undertaking tasks such as this, managers tend to be more visible and interested in reducing costs all over the business. Increasing engagement in this way can improve relations, communication and the flow of good ideas.

Manufacturing Benefit During Recession...

Refine and Improve Business Processes

Related to the above, strengthen and document your business processes. The aim is to standardise what you do, along with improving instructions and training. This enables staff to be more flexible as they can quickly follow clear guidance in different areas, if required by the business. Also, standardising documented processes reduces variability and therefore improves quality. Use spare staff time and in-depth employee process knowledge to help you achieve this and better engage the workforce. By reviewing, improving and documenting internal processes you can cut costs, dramatically improve efficiency and potentially pave the way for desirable industry accreditations, such as ISO 9001.

Manufacturing Benefit During Recession...

Obtain Value for Money

During tough times companies are forced to use their existing resources to get better results. Managers and workers are compelled to focus on what’s important and obtain value for money. Often this involves examining the way in which things are done – doing things differently by streamlining processes and striping out waste.

Manufacturing Benefit During Recession...

Try Everything before Making Staff Redundant

Delay laying off staff for as long as you possibly can afford to. Try flexible working, shorter working hours, home working, even unpaid leave – essentially whatever it takes. Losing key skills typically leaves companies unable to meet demand both in the short term, and also when the economic recovery eventually arrives. The skills shortage is acute in engineering and companies struggle to obtain the talent they need to deliver and grow. In addition, recruiting at some point in the future is likely to be tough – and costly.

Internally replacing skills by retraining takes time and is expensive in terms of lost productivity. Also redundancies need to be carefully legally managed, can be expensive and can have disastrous consequences on morale for employees who remain. Industrial relations can also be badly strained and the rumour mill typically goes into overdrive. All this will drive down productivity. It’s far better to retrain and redirect staff onto other (cost reduction and improvement) tasks if your finances permit it.

Next... 7 Ways to Prepare Your Firm for Economic Recovery

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