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Positioning Yourself During A Recession


Jim Cavalluzzi

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You can be ready to hit the ground running when the recession is over if you spend wisely and make use of your extra time now. The usual response to a downturn in the economy is to overreact and stop spending entirely. This not only fuels the recession, but severely hinders your chances of gaining a significant increase in market share. Only you know your true spending limitations. If you’ve done your work up front; improving throughput and eliminating waste, then you should be in a position to keep on spending. This doesn’t mean you spend unreasonably; just that you should continue to spend if you have the resources. It is inevitable that some companies will not weather the storm. Those that have ignored implementation of continuous improvement and lean manufacturing will find it difficult to survive in a poor economy. At the very least, if they make it out of the recession at all, they will not be the same company they were prior to the downturn. If you know your competition, and you can recognize those which are faltering, then you can position yourself to take on the business they can no longer handle.

As your business begins to slow, do what you can to avoid layoffs. Simply because everyone is doing it does not mean it is a good idea. Short term gains most often bring long term losses. Let the lemmings run off of the cliff without you. A lot of time and money was invested to train those workers, so why just let them go? You wouldn’t throw away your machinery, so why throw away your employees? Take advantage of the additional time you now have to do those things you said you didn’t have time for in the past. Things which will improve your bottom line. Things which will position your company take on business being cast off now, as well as the business that will come after the recession. Make use of that extra time for house cleaning. Get rid of all those old parts that couldn’t be repaired. Sell off or recycle raw materials that you no longer have a use for. Organize those items you still use. Re-arrange your warehouse or departments for better work flow. Clean and paint your equipment so it will continue to serve your needs long into the future. Now is great time to train your workforce. Make use of the extra time you have to establish a training program. Create those “Job Descriptions” and “Work Procedures”. Find out where you are lacking and get those people trained. “Cross-Train” your workforce to understand and perform all the necessary jobs you have. Teach them to run all of the available machinery. Train them to function not just in their department, but in all of your departments. A well trained workforce not only addresses those scheduling nightmares, but helps to motivate your employees. By keeping your employee base intact and training them; you will have an experienced and efficient workforce in place when the recession is over. Isn’t it much more attractive to have those experienced workers in place, than it is to have to go out and hire new employees and train them while you are attempting to take on new business? Take advantage of this extra time to tackle some of those programs that will improve your operations. Implement process improvement programs. Get some of your employees formally trained in six-sigma or lean manufacturing techniques and start using them. Put a structured preventive maintenance program in place. Get those “green” programs up and running. All of these training programs truly cost very little to nothing at all. The large investment is time, and time is what you have a lot of right now. Don’t look at training as an unwarranted cash outflow during hard times, but a prudent and proven investment in the future of your business.

Waiting to hire new employees when the economy improves might sound like rational thinking at present; however, if you wait until then to start hiring, the pool will be significantly smaller. Hiring those needed employees now will benefit the company now and in the future. There are presently an awful lot of unemployed experts out there who have been recently downsized. There are more top notch recruits out there now then there has been for nearly thirty years! Now is the time to take advantage of the situation and put some of those great employees to work in your company. Yes, there is always the chance that these experienced workers will leave for greener pastures once the market changes, but only if you make it more attractive for them to do so. Train your management staff in how to retain those outstanding employees and start building a better workforce. You can take advantage of the skills and experience these new employees have to set up your new programs or to train your workforce. Hire a Black belt in six-sigma and let that person train the others to be more efficient and cost conscious. Hire that experienced CNC programmer and have that employee put together and implement your DNC system. Find that warehouse guru and let that person establish your pick and place system or that kanban program. The examples are endless. If adding to your payroll isn’t an option at this time you might consider hiring a consultant to help out with those new projects and systems. By using a consultant you get those things done that you do not presently have the skills for without having the cost burden of a full time employee. When your project is complete you will not have to try and find ways to keep them busy nor do you need to pay unemployment, etc. So use your excess time wisely and turn what seems to be a bad thing into a good one.

Another great opportunity you have right now is the procurement of new state of the art equipment. Machine builders are feeling the crunch too. They are reducing costs to keep their plants running and retain their employees. As a result, there are some really good deals out there on machine tools. Purchasing those needed tools at this time will not only save you money, but you can get what you want right now and at a lower cost. If you wait until the economy recovers everyone will want the same things at the same time. Selections will be dramatically reduced because it was not economical to replace the tools that were sold. Since the manufacturers are short skilled labor from layoffs, lead times will be quite long. They will not be able to get the materials needed to build new tools because everything will be in short supply and as we all know, shorter supply means higher prices. If you buy those tools now you will have them when everyone else is waiting to get theirs. This means you will have an opportunity to grab up more of the market share. Having that new equipment in house now also means you can start learning to use it. Train your operators to run the new equipment now, while you have the extra time. Learn how to program the machines and start determining which jobs might run quicker, more reliably, or more accurately. Train your maintenance personnel and set up your maintenance schedules. Start saving now and position yourself to handle those new jobs when you get them.

All those skilled employees that you couldn’t find before are out there now. All that equipment that you couldn’t afford is inexpensive right now. All that time you didn’t have for training and implementing those new programs is at hand. The time for making excuses is over. What seems like a death knell to other companies can mean new life for yours. Look at this downturn as a long needed opportunity to improve operations, better your workforce and position yourself for growth. So if you have it, then spend that money and set yourself up for a prosperous future.

© by James Cavalluzzi: April 27, 2009

About the Author

Mr. Cavalluzzi is the founder and owner of CONSOLUTE, LLC engineering support and consulting services providing site search, industrial, manufacturing and design engineering support. His extensive background in engineering dates back over 30 years and includes the robotics, automotive, aerospace, metals and plastics industries.

Visit them at: Consolute, LLC – Engineering and Consulting Services

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Article Published/Sorted/Amended on Scopulus 2009-07-28 11:22:01 in Business Articles

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