Getting ready for the uptick
First of all, don't get the wrong idea; this is not another "Are you ready for the rebound?" column. We've all read a million of those by now -- and yet, somehow, the rebound never really arrives.
First of all, don’t get the wrong idea; this is not another “Are you ready for the rebound?” column. We’ve all read a million of those by now — and yet, somehow, the rebound never really arrives.
The effects of the Great Recession are still with us: both Canada and the U.S. continue to shed jobs, for example. And no one knows for certain if we’re heading into a double-dip in the first half of 2011 — a question that might just hinge on whether the Bush administration tax cuts are allowed to expire in the U.S.
So rather than pretend the worst is behind us and recovery is just around the corner, I’ll ask a simple question of my readers: are you ready for an uptick?
From the equipment and materials side, let’s assume you shut down some production lines during the slowdown. Can these abandoned lines be resurrected to handle new business, or will doing so take an investment in used equipment? And maybe — just maybe — the time is right for some new processing equipment. Now’s the time to decide.
Also, how’s your resin supply holding out? From the anecdotes I’ve been hearing, some processors were caught short on material during what seemed to be a sudden spurt of orders in the spring. Speaking of which, there’s no time like the present to re-examine the price you’re paying. Can you get a better deal when ordering fresh supplies? And have you been fully briefed by your supplier on the latest resin offerings?
From the strategic side, survival can be summed up by four words: lean, mean and innovative.
Let’s take the last first. The march of technology hasn’t slowed down just because the economy has. If you’re making PET bottles, you can’t hide from the growing pressures for lightweighted products; if injection molding is your bag, making small parts for medical devices can yield big dividends. Beyond these, it’s both ironic and true that you can learn to be innovative by looking around you and seeing what kinds of products your competitors are making to help them grab those new contracts
But innovation alone won’t suffice. Here’s a piece of very old news: the pressures that all plastics processors and related companies are facing resemble those that drove the automotive industry to embrace the principles of lean manufacturing pioneered by Toyota. If you haven’t already, adopting lean principles to eliminate waste is going to be crucial going forward. (If you’re still here to read this, chances are you’re running a pretty lean shop already. But if you’re not yet Toyotalean, it may be time to consider it. A good ERP system can help.)
And “mean”? While, broadly speaking, Canadian shops are all in this together, competition is unrelenting, and each and every processor still needs to react quickly — ruthlessly so — to customer requirements, or risk losing that customer.
To strategize further, do the words “marketing plan” read like Greek? Unless you’re very good, your recovery might not go far without one. On a related note, how does your company website look? The impression conveyed by too many websites is, “We don’t need this thing in our lives right now”. That won’t cut it anymore.
It might not seem important to mull over questions like these right now — and allow me to reiterate: I’m not saying the recession is over — but why wouldn’t you? Think of yourself as a boxer taking stock between rounds; can you answer the bell as you are, or do you need some stitching up?
Whether we’re heading into a postrecession or a double-dip world, the answer matters.