Ensure The Longevity Of Your Business

Prior to Sept. 11, the metalworking industry had been having a fairly rough time.

Columns From: 1/5/2002 Modern Machine Shop,

Prior to Sept. 11, the metalworking industry had been having a fairly rough time. I won’t use the “R” word, but I can’t remember business being as bad as this during my career. There have been pockets of good sales activity. Medical equipment manufacturers and oil field equipment producers were doing quite well. Other core sectors—automotive, construction equipment, farm equipment and others—were not so fortunate, resulting in the cancellation of planned purchases of machines and contract machining services.

North American sales of workholding equipment for August 2001 were up 16 percent from the previous month according to AMT-The Association for Manufacturing Technology. All regions of the country showed sales increases in August. As September began, the telephones were ringing, and we all thought that the slow times were behind us as we made plans for the increased opportunities that we felt were right around the counter. Then everything changed! And we also have to change or become a statistic of the times.

Reviewing the process of your facility is even more important in these times of business downturn. What you have been doing to stabilize your business these last few months, and what you will do in the next six months, will probably determine if your organization has the strength to survive. To be sure, the make-up of our companies will have changed by the time that we emerge from the current problems.

Already most firms have cut back on their personnel. Additionally, many companies are now working reduced hours. Whether you are scheduling 6-hour days or 4-day work weeks, you must do what is necessary to provide for the continuation of the business. Not all of the individuals who we have dealt with over the past few years will still be employed in our industry when this thing is over. It is our responsibility to make sure that the business survives so that we have a sound foundation on which to begin rebuilding as soon as possible.

Now more than ever you must be ever diligent. When you come into the company in the morning with a fresh set of eyes and ears, do a walk-a-round. I am a “morning person,” and I feel that most of my best decisions are made before noon. But you may be more comfortable after lunch or later in the afternoon. The “when” is not important, but the fact that you set aside a portion of each day to review your operation is vital. Small daily improvements will have as positive of an effect on your operation as the large one that takes you 12 months to implement.

Looking at the operation does not just mean making changes in the manufacturing process. Look at the materials that you are using. Check out the purchasing procedures. Can the order quantities be revised? Are there unprofitable products or sizes in a product range that can be eliminated or out-sourced? Are there areas of the company that have excess capacity?

One of the areas that many companies in the metalworking industries are pursuing even stronger during these trying times is that of international trade. While Europe and the rest of the world have begun to feel the slow-down in business activity, they have not experienced the depressed levels that are facing us in the United States.

The latest economic predictions from Europe suggest that the metalworking industry will fall short of its forecasts and that growth will be limited to less that 1 percent. Although most of us would love to have a banner year, right now we would settle for the assurance of a slight improvement in our prospects. Our cyclical industry will be back; just make sure that you have done those things to ensure that your organization is still around to enjoy the next peak.

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