7 Ways to Prepare Your Firm for Economic Recovery

Prepare for Manufacturing Recovery

Prepare for Manufacturing Recovery...

Retrain for a More Flexible Workforce

If you are forced to make staff redundant, the likelihood is some valuable skills, expertise and experience will also go. You need to carefully manage this. Identify the critical skills the company needs and who has them. With the remaining employees, put in place a development plan to retrain staff, transfer skills and build resilience. To make this more manageable, try grouping skills by team or by department.

Additionally staff personal development, training and ultimately improved employability, will be welcomed by workers. This is important as morale will almost certainly have gone down and uncertainty gone up since the redundancy announcement. This action sends a clear signal the organisation is investing in the workforce. Subsequently staff see a positive future for the company. With any luck, this will be reflected in improved productivity and quality.

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Prepare for Manufacturing Recovery...

Update Business Continuity Plans

Consider updating (or drafting for the first time) your company business continuity plan. Identify the key risks to the business. Some of these may be recession related. Examples include loss of key customers, critical staff leaving and vital suppliers going bust. The next step is to put in place plans to minimise or reduce these risks. So for the 3 examples, answers may be to diversify the customer base, put in place a retraining programme and establish back-up suppliers. The next stage is working these solutions up into detailed plans, before finally executing them. Underused staff can assist, particular when risks or solutions impact their area of the business. Their specialist skills and expertise will be invaluable. Plenty of business continuity information, templates and examples are available with a little research.

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Prepare for Manufacturing Recovery...

Dramatically Reduce Costs with Suppliers

Recessions are the best time to obtain the best value for money from your suppliers. Prices are often at rock bottom and negotiating to further reduce cost and cut deals are often possible. Suppliers will attempt to reduce stock with discounts. You should be prepared to take full advantage of this. Providing you have the funds, great deals can be done on large spends like capital equipment or IT systems. Attempt to tie suppliers to new low cost deals as long as possible. Also use this time to source alternative backup suppliers so you have resilience in your supply chain. Understandably your supply base is most vulnerable during a recession. Finding substitute companies who are eager to do business provides you with some insurance.

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Prepare for Manufacturing Recovery...

Reduce Other Fixed and Variable Costs

Other opportunities to cut costs during recessions include lower cost raw materials and subdued wage demands. What other fixed and variable costs have you got that can be renegotiated. Consider using a cost reduction consultancy to use their buying clout and economies of scale to drive down your running costs. Often trial services are free or very low cost with savings guaranteed. Reductions should help your cash flow – critical at any time, but particularly during tough times.

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Prepare for Manufacturing Recovery...

Improve Communication to Get the Workforce Behind You

Communicate with all your staff. Explain the current situation the business faces and how the employees are central to helping the organisation through these tough times. The uncertainty of recession will probably feed all sorts of rumours and anxiety. Be frank and clear with staff, emphasising positive news whilst keeping problems in perspective. Attempt to nip rumours in the bud. Clear official channels of communication should help. Managers should be visible and answer questions. The workforce will appreciate it.

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Prepare for Manufacturing Recovery...

Make Tough Decisions that Fundamentally Improve the Business

Tough times enable tough decisions to be taken with less challenge. When company survival may be at stake people will be less resistant to necessary changes. Kill off pet projects and activities that have questionable benefits. Make management decisions and changes that fundamentally improve the business. Staff, managers, investors, suppliers and customers will be less resistant as everybody refocuses on business survival. The business should be leaner, fitter and in a better position to face the future.

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Prepare for Manufacturing Recovery...

Increase Your Market Share

As ruthless as it sounds the recession may remove some competitors from your market. You should be ready to exploit this to ensure your own survival. Seek out the customers of the companies who have gone to the wall. Small manufacturers are relatively unbureaucratic and nimble. Use this flexibility to get in and fill gaps in the market and compete against larger competitors. Focus on your personal customer service, quick turnaround and swift responsiveness. Use the opportunity to grow.

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