Manufacturers Adapt to a Changing Economic Landscape
Hello again,
This post is for small to mid-sized manufacturers who are experiencing business disruptions in the current economic climate.
In times of economic uncertainty, a few key fundamentals become important.
One recommendation that comes up is keeping income greater than one’s spending. It seems obvious, and for many, cutting back on all spending in times of trouble is a first precaution to keep the company in existence.
Productivity
But if purchasing is reduced how then does one keep operations going at a sufficient level to stay in business?
Companies need money to run, even in tough times. Identifying all sources of potential income and developing those as a first action can be key, perhaps even more important than company-wide spending cuts.
For example, say a company has customers who routinely purchase red wagons, but who at one point in the past purchased yellow ones too, so there’s an inventory of yellow wagons gathering dust. Maybe with a little marketing, those wagons can be sold.
Extraneous Materials
Maybe there is leftover raw material that can be sold as-is to a supplier?
In focusing on day-to-day operations, personnel move production errors, incorrect sub-products, and other exceptions and scrap out of the way to keep operations moving with minimum interruption.
Odds and ends can accumulate in storage areas and outlying warehouses that may be another source of income. Many manufacturers offer an annual “bruised and bumped” sale.
But, if there’s no budget to get these ideas into reality and promotion developed to let potential buyers know about these options, there’ll be no new income.
More Throughput with Fewer Employees
If a manufacturer is coping with a hiring freeze or skilled labor shortage, a comprehensive manufacturing software system can help increase productivity compared with manual tracking or using an outdated system.
A technological investment that provides productivity tools to increase throughput may help increase profitability.
A thoughtful use of funds to help generate income can often do more to help a company through lean times than broad spending cuts.
Passport Software
PBS Manufacturing software for small businesses and mid-sized companies can help you gain control of your shop floor and streamline operations with automated productivity tools.
And, in-depth reporting provides you with business intelligence to help you make better decisions for your company.
Call 800-969-7900 to learn more. Or contact us – we are here to help.