Planning for the Unknown: How Factories can Fight Headwinds in 2020
It’s easy to look back in time and point to pivotal moments ahead of great struggle, when a little planning might’ve gone a long way. But hindsight is 20/20. And, much like the year 2020 has already shown us, there’s no telling what might happen tomorrow. All manufacturers can reasonably assume is that some new struggle will happen — it’s just a matter of when. What’s important is recognizing that right now is one of those pivotal moments, and proactive planning could be what weathers the storm in the months and years to come.
Manufacturers face the unknown, with more of the same to come. COVID-19 cases plateaued in May, but are on the rise again headed into July. Social disruption is rampant, fueled by slow-to-open economies and civil unrest behind an anti-authoritarian police movement. And, to top it all off, this upcoming election season promises to be one of the most divisive in history. At the center of it all us economic uncertainty — and manufacturing is at the center of that.
There’s little manufacturers can do to predict the future. What they can do is follow the guidance of entities and organizations leveling general predictions, like the International Monetary Fund (IMF). The IMF recently released new guidance projecting a contraction of 4.9% in the global economy.
This bleak forecast is a call to action. Manufacturers need to start hunkering down and making decisions today that will impact them tomorrow. And although it’s never easy to plan for the unknown, manufacturers should plan for the worst and hope for the best (or at least better). Here are the evasive maneuvers manufacturers can take to soften the blow of an uncertain future:
- Streamline and diversify supply chains. Invest in and implement technology solutions that create supply chain visibility. This will afford greater control and adaptability during times of disruption.
- Perform a business evaluation. Evaluate the efficacy and relevancy of your business model in the current climate and stress test it against harsh conditions. Examine points of weakness and reinforce where needed.
- Make proactive investments. Despite the instinct to shore up cash reserves, manufacturers should make investments that will pay dividends during harder economic times. New equipment purchases that enable new production capabilities, for example.
- Plan for employee health and safety. Implement health and safety standards now to keep your workforce happy and healthy in the face of the unknown. Preventive health measures will keep your factory running should the virus surge.
- Diversify revenue streams. What market demands are going unsatisfied in your industry and where can you capitalize? Now’s the time to get new production modes up and running to attract new clients and diversify revenue streams.
These action items aren’t always easy to accomplish. They take strategy and forethought, and they might not always receive buy-in from stakeholders. For example, spending money to start up a new service now may seem irresponsible to some. Present a unified, data-backed case for making investments, pivots, or capital decisions, and think ahead. The intent is to be proactive now to reap the rewards later.
Whether it’s saved costs, new revenues, or general stability, tomorrow’s benefits demand planning by manufacturers today.