Search For A Silver Lining

 

It’s not news that business conditions in most of the precision parts manufacturing sector have pretty much tanked. And it doesn’t look like any kind of dramatic turn around is on the near horizon, although there are some barely audible rumblings. Those might, of course, be hunger pangs.

Some say that what we are experiencing now is the new normal level of business. Basically that perspective dismisses the past 8 years as an aberration. I’m not ready to buy into that point of view just yet. As a matter of fact, I recall the same “this is as good as it will get theory” being espoused 9 years ago when manufacturing was last down.

On the contrary, I see many opportunities for smart manufacturers to improve their position during this economic slowdown. If one looks close, manufacturing is by far the most devastated sector of the economy. But we seem to be in a manufacturing slump, not an economic slump.

Many other parts of the overall economy, including housing, consumer spending, automotive and employment, are still chugging along. With about 17 percent of the GDP coming from manufacturing, I question whether we have the critical mass to drag the whole thing down.

But understanding all this, as they say, still “doesn’t feed the bulldog.” What is the best path for a shop to take in order to weather this mess?

It seems to me that step one for any shop is to believe that a recovery will come. We have enjoyed an unprecedented run of good business levels for most of the past 8 years. There are younger co-workers of mine, and I’m sure of yours, who have never seen a manufacturing downturn in their career. It’s a scary thing.

The big picture business strategy, then, should be to get prepared for recovery when it comes. There are as many ways to do this as there are precision parts manufacturing enterprises. Each business is unique, and its respective areas of potential improvements are likewise unique.

Overall though, now is a time to look very hard internally at the business. Evaluate areas in your production flow where the process bogs down. Take the time to fix these.

Are there some aspects of shopfloor control, data acquisition, quotation or purchasing that can be automated with new software. Use this time to invest in automation and train your people to use it.

Long delayed maintenance chores, more ergonomic arrangement of work stations and work space can finally be accomplished. You have the time now; you won’t when business gets better, and remember, it will get better.

Now might be the best time to plan expansion of your market. Generally speaking manufacturers are much better at making parts than marketing their ability to make parts. Sales and marketing are increasingly becoming as critical to a precision parts making shop as anything else it does. A Web site, for example, is close to mandatory. Find someone to help get your shop online if you can’t build a site internally.

I have a childhood friend who runs a job shop in my hometown. He has been successful using the Internet to get orders internationally. His shop has customers in South Africa and Europe. In most cases he’s never met the customers face to face. Their business is conducted online.

It seems that a slowdown such as we’re in is a time to try to cement relationships among a shop’s customers. Again the idea is to prepare the ground for better business conditions.

If you’re trying to increase your efficiency, communicate this to your customers. Tell them you will be ready willing and better able to work for them when they need you.

My point in all of this is that ours is and always has been a cyclical business. Success comes to those who can hang in during the valleys and best prepare for the peaks.