Hope for Manufacturers in a Recession...

In a previous blog, I talked about 3 strategies for manufacturers to accelerate current business recovery or, to HEDGE against the effects of another decline in the event of a double-dip recession. Either way, a hedge strategy provides a better outcome for manufacturers. I spoke on this topic at a previous city wide meeting, sponsored by the Manufacturing Alliance of Philadelphia, who's membership works in collaboration with government and other agencies to resolve challenges that might harm the sector, including *job training. As promised I am providing additional research with examples of less cyclical markets, that can help a manufacturer to hedge against a slow recovery or worse.

Original strategies included;

(a) Access international market opportunities or to attract interest in US manufacturing (I've provided a link to a company that matches US interest in Latin America and conversely with interest in US Manufacturing.)

(b) Add an innovation-program for developing new products or a new production process (I will provide an overview in my next set of Blogs)

(c) Re-Balance targeted customers to include a mix of "less-cyclical" markets.

Particularly during recessionary periods, cyclical markets are what cause heavy suffering in most industrial sectors, particularly durable goods. On the other hand, Less or Non Cyclical (Non-C) Markets allow manufacturers to remain relatively healthier whether the economy is up or down.

With a little research, you may be able to uncover accounts within your customer files, who either directly or indirectly sell into Non-C markets. Subsequently, you can choose to target new prospects with similar needs, that compete or compliment each other within these same Non-C markets. And/Or, you can migrate some product production from your traditional, to Less-Cyclical markets.

An example is a Textile manufacturer that sells mainly into retail-store markets. While sales may have contracted, the home-textile market remains buoyant because textiles are used as a more cost effective form of "up-lifting" during poor economic times! Also, adding Design Services to traditional Product Manufacturing represents a revenue opportunity that many manufacturers miss - a topic that I will touch on in my next Blog.

Are these strategies relevant for small and medium size business? Absolutely! As a small business myself, I am implementing strategies in all 3 areas. and so are other smaller businesses.

These strategies also apply to businesses in the services sectors.

* The Manufacturing Alliance of Philadelphia's Job Ready Program is the first of its kind, designed specifically to close the skills gap that prevents companies from obtaining high qulaity training manufacturing employees.