Managing Automation - January 2009 - (Page 8) david r.brousell/EIC TAKE 1 The latest Managing Automation reader poll on manufacturers’ outlook for the new year clearly shows how industry is feeling as we enter 2009. Confidence in the economy has dropped dramatically compared with year-ago levels, the worldwide financial crisis has had a substantial impact on many companies, and just as many are either cutting or re-evaluating general spending and hiring plans as they struggle to understand the demand picture in the unpredictable months ahead. These feelings are understandable and expected. We all know the grim statistics about the Dow and Nasdaq, unemployment levels, industrial production, and consumer confidence. And we all know that 2009 will shape up to be a tough year as the financial chain reaction, still under way, works itself out. But there are things manufacturers can do now to both lessen the impact of the crisis and prepare for the recovery, which will eventually come. The first of these is to work at helping to defeat the “mental recession.” Fear, uncertainty, and doubt always constitute the first response to a crisis. This reaction is necessary and useful to push people and organizations into survival mode. Once in, though, the key is to direct the energy toward moving ahead. What Franklin Roosevelt said in his inaugural speech in 1933 — that the only thing we have to fear is fear itself — is as relevant today as it was during the Great Depression. So now is the time to rethink things — business model, strategy, positioning, product offerings. MA’s Progressive Manufacturing concept, with its eight business and technology disciplines, couldn’t be more relevant today. Make the tough decisions to not only get through 2009, but also to position your company for the recovery and growth when 2009 Managing the Crisis Dbrousell@thomaspublishing.com The economic meltdown is now a fact of business life, provoking caution, retrenchment, and even fear. But positive steps can lessen the impact. the dark clouds now hovering over us eventually part and the sun shines through again. Central to all of this is your relationship with your customers. If you have done a good job of crafting “trusted adviser” relationships with the organizations you do business with, you will have an easier time this year. If you haven’t, it is never too late to listen carefully to customers and help them solve their problems. This year, everyone and every company will be looking for help and reassurance to get through the crisis. Clearly, too, there are pitfalls to watch for. Manufacturers will have to be careful about balancing short-term financial improvements with longer-term goals. In addition, as AMR Research President Tony Friscia warns, companies should be wary of allowing “good enough to become the enemy of best.” There is no shortage of advice about what to do. Some of the best I’ve seen comes from McKinsey & Co. In an article last month, authors James M. Kaplan and Johnson Sikes identified four areas to focus on: freeing up cash from operations, maintaining the customer experience, upgrading talent, and managing IT spending. On that last point, the McKinsey consultants are in agreement with MA readers, who believe in the strategic value of technology. Key investments now in such technologies as business intelligence and supply chain software, they say, can return up to 10 times what simple cost reductions can. Let’s all think carefully, but think proactively as well. What’s your company doing to get through the crisis? Write to me at Dbrousell@thomaspublishing.com. s maonline managingautomation.com For more of David R. Brousell’s views, visit: t Mr. Obama’s Opportunity www.managingautomation .com/takeone54 t The Financial Crisis www.managingautomation .com/takeone53 t A Delicate Balance www.managingautomation .com/takeone52 ma 8 January Photo: Peter Kolk http://www.managingautomation.com http://www.managingautomation.com/takeone54 http://www.managingautomation.com/takeone53 http://www.managingautomation.com/takeone52
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