I was born and raised on a dairy farm. Rainy days were not days to relax, they were days to work on all the chores we could not find time to do during good weather. Without the rainy days and the tasks we accomplished then, the tasks we had to accomplish on sunny days were put at risk.

 

Unfortunately, many manufacturers don't take advantage of these "rainy days;" instead they react like threatened turtles. They withdraw into a "defensive mode." They cut capital investment, expenses and labor wherever possible and enter into semi-hibernation waiting for the next growth cycle. It is your choice to adopt a "turtle posture" and miss tremendous opportunities or take advantage of this "rainy day" to better position yourself for the next growth period. Plus there are numerous opportunities to mitigate the impact of the current downturn.

 

Certainly cost containment is appropriate and necessary at the end of any extended growth period. During growth periods, management's focus is turned to capacity issues and cost containment becomes secondary. Now is the perfect time to tighten up those controls that were relaxed or ignored.

 

If labor reductions are necessary, maintain an eye to the future when you will need more good people. Inevitably during growth periods people were hired and retained more for convenience or necessity than their true value. Now is the time to purge the underperformers while keeping in mind that some of your recent hires may have more value and potential than some of your longer term employees. This is an opportunity to improve your "line up;" take advantage of that.

 

This is also a tremendous opportunity to invest in your retained people and your own future.

 

Use this time to do training and cross training. Take advantage of both external programs and your own internal training capabilities. Search out beneficial programs at your local technical schools and community colleges and more specific trade programs that are available. Stiles Education Center and American Wood Finishing Institute (AWFI) immediately come to mind as sources for trade-specific training. Many courses are available from a wide range of sources as "distance learning" courses, which your workforce can receive right in your facility or at home without need of a traditional classroom environment and travel.

 

Do not limit your consideration for training opportunities to the shop side of the organization. There are many opportunities for beneficial returns resulting from training on the office side of the wall as well. The fact that people work on computers does not make them proficient. Software training is just one of many opportunities to improve performance in the office. While evaluating training opportunities for your employees, don't forget yourself. I fervently believe it is impossible to grow old enough, or smart enough, to ever cease being a student.

 

While I have never done a Return On Investment (ROI) calculation for training costs, I would suggest it is one of the more beneficial investments you can make for your future. The most unfathomable reason ever given to not invest in training is that, with their improved skills, your employees are more likely to leave the company. I suggest two things: One is to provide an atmosphere that makes your employees want to stay, and two is do you really want people that no one else is interested in? The quality of your employees is the most important attribute you can develop to ensure the future health of your company.

 

This is the perfect time to conduct continuous improvement or Kaizen team events. All those opportunities identified during the rush, but put off because there wasn't "time," can now be harvested. Keep in mind some of the problems that seemed large a year ago, but currently not of great impact, will return. Don't ignore them simply because the pain level has subsided. The market will return and those problems with it — so fix them now.

 

Evaluate your product with an eye to culling the underperformers. There are significant cost advantages to be realized in almost all companies by a committed product rationalization program. Few companies do not have products that are either below the acceptable profit margin or even being sold below cost.

 

To maximize the return on a product rationalization program, appoint a champion to manage the project. Depending on the size of your company and scope of the product lines, this may well be a full-time, but temporary, position. There are always products that are "sacred cows" in these projects, and I am enough of a realist not to say there can't be any. But if you seriously want to improve your profitability, both today and in the future, those "sacred cows" better have "sainthood."

 

With few exceptions, companies produce 80 percent of profits from 20 percent of their products. Identify the "cash cows," optimize them and either outsource or drop the ones that are a drain on the business. Why consume your production capacity and resources with losers?

 

If your product cost structure is not current and accurate, this is the time to correct that as well. You might find you harbor some misconceptions in what you currently regard as "winners" and "losers."

 

Keep in mind that this is a downturn in the market; it does not need to be a downturn in your market. Seldom do opportunities to increase market share not exist. Identify those opportunities and take advantage of them. These opportunities can be realized through product redesign, improved quality, increased value, reduced lead times and improved service. If your competition has adopted a "turtle posture," that simply puts you in an even better position to increase your market share.

 

I mentioned last month that many manufacturers see themselves in an unnecessarily restrictive market segment. Look beyond what you produce today to other related or even unrelated fields. There are many fertile fields to cultivate; often we fail to see them.

 

While looking at your current products or new expanded market products, understand and utilize the principles of mass customization. This includes rationalization and consolidation of your purchased and manufactured components. There is money to be saved simply by reducing the number of different screws that you maintain in inventory and at your assembly lines. I can comfortably say there are few companies that cannot combine and reduce these items.

 

The principles of mass customization must be fully understood, and practiced, by your product design folks and augmented by your purchasing folks. This is a practice that should be used on all new products and applied where possible to existing products.

 

Leverage this lull in market growth to sharpen your current operation, maximize profit margins and position yourself for tomorrow. The future health and potential of your company rests in your control, not the market's.

 

The choices are yours. Stick your neck out, and take advantage of the opportunities that surround you.