It hasn't been an easy year for the U.S. manufacturing sector. Most manufacturers have felt the sting of the volatile credit markets, rampant job losses, flagging product demand and the quiver of uncertainties about the future -- made worse by our protracted recession. Creating new jobs and restoring strength to our industry have never been more crucial. As a new member of the National Association of Manufacturers board of directors, I am more committed than ever to making this happen.
But when --and how -- will we see the light at the end of the tunnel? A recent Grant Thornton survey of nearly 500 U.S manufacturing CFOs and senior controllers suggests that it may still be a number of months off. According to our survey, nearly half (48%) do not expect the recession to end until 2011, while nearly another one-quarter (24%) expect it to be later than 2011.
Moreover, only 29% of survey respondents' companies plan to increase hiring in the next six months, while 22% plan to decrease hiring. Hiring is even weaker amongst Fortune 500 firms (firms with revenues of $5 billion and higher); 31% plan to decrease hiring over the next six months, while only 23% plan to increase.
Regardless of when the recovery happens, those companies that are well-positioned for it will be able to capitalize on the opportunities. So, what should you do now to get ready for the eventual improvement?
Examine Your Suppliers and Key Customers
You want to be sure that you have strong and stable relationships with your suppliers, and that you clearly understand the financial condition of your suppliers and customers. Nothing can torpedo an uptick in business faster than the inability to source materials from key vendors or the inability of a key customer to pay their invoices.
Forecast Effectively
You also want to optimize the flow of product throughout the supply chain. This requires sharing production and demand estimates and schedules with your customers and suppliers. This will result in lower costs to you and higher margins on your sales, even if volumes don't grow as quickly as planned.
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