The Ups and Downs of Manufacturing
Let’s face it. The last two decades have been tough on the manufacturing sector. One year we’re up, and suddenly the next, we’re down. While the economy seems to be strong and interest rates remain relatively low, we also know it is cyclical. And there are challenges due to trade policy, a shortage of trained workers, and volatile raw material costs. It’s a been a bumpy ride, and twenty years later, manufactures still wrangle with deep uncertainty. In these situations, we often rely on the wisdom and experience of our peers; especially when the ripples and waves of traditional business cycles are unreliable and difficult to read.
Groups such as the National Association of Manufacturing (NAM) provide a valuable resource to help us figure out when the waves are likely to hit. The NAM releases a quarterly outlook report compiled from the input of everyday manufacturers like us. They gather data through surveys completed by companies of varying sizes to determine a fair assessment of the industry as a whole. Broadly, the NAM wants to know how owners are feeling about their businesses and share that information with others in the same boat.
The Manufacturing Outlook Survey
When comparing the second and third quarters of 2019, NAM’s “Manufacturer’s Outlook Survey” suggests that the US Economy is likely to slow down during the final quarters of 2019. The NAM survey indicates that 67.9% of business owners rate the outlook as positive in September. This is a dramatic 12-point drop compared to 79.8% in June of 2019. Furthermore, the predicted Growth Rate for sales over the next twelve months, while staying in positive territory, has dropped to 2.1% in September versus 3.4% reported for June. As unnerving as this outlook may sound, experience tells us that planning ahead and acting is the best path to success. Obviously, no manufacturer wants a contraction or worse a recession, but after a decade of expansion, the cycles and waves are not unexpected. More importantly they can be managed with the right attitude and processes. Consider how this information applies to your business? Where does your business currently stand and how well prepared you are for a slowdown or recession?
- Do you having confidence heading into the next quarter and fiscal year?
- Is your outlook negative or positive?
- Are you growing
- What challenges are you facing?
- Have these challenges at all improved, or are they continuing to worsen?
If your business evaluation was unfavorable, start strategizing. Think about how can you adapt to this economic wave. One of the most effective changes will be to improve operational efficiency. Can tweaks be made to help you save? If so, how do you plan to implement these tweaks effectively?
Ride the Waves with Onex
Believe it or not, we at Onex are more than industrial furnaces, combustion and refractory. To help our clients succeed, we need to understand their challenges and operational processes too. Our mission is to help you, and ourselves continually make things better. This means we often have to act as strategic partner, look at your process with you, identify opportunities for improvement, optimize functions and create efficiencies. When things are getting tougher or slowing down, we are here to assist you. For example: A production slowdown is also an opportunity to look at processes and equipment. Onex can help you make cost effective decisions as well as provide top-notch support to help you operate lean and strong.
Some of our services include:
- Thermal imaging to help detect wear and tear
- Failure analysis to accurately determine the performance of your machine
- And, most importantly, quality improvement. Onex will help you implement a PDCA (plan-do-check-act) project cycle to support a culture of continuous improvement.
Surfs up! Why not grab your board and connect with Onex today!
Learn more about the Manufacturers Outlook Survey https://www.nam.org/manufacturers-outlook-survey/