Why is it that when business is good we think that it won’t turn down and when it is slow we think it won’t pick up again? Let’s face it, business cycles are here to stay, and we would do well to anticipate them and run our businesses to make the best of the up cycles and to cope with the down cycles. While these thoughts are primarily aimed at others with manufacturing businesses, the primary issue is pretty generic. None of us have infinite capacity, so how do we most effectively flex our capacity or influence the demand so that they are relatively closely matched?
There are many ways to adjust capacity and if the business cycle is deep enough, we need to employ all of them. If there is a lot of capacity available then using a one shift operation may meet the demand requirements, although it may not provide good utilization of the plant equipment. Adding another shift or two increases both the sales output as well as plant utilization. The maximum output and utilization can be gained by setting up a 24 hour a day, 7 day per week operation. Using overtime is the best governor for adjusting capacity because it can be increased or decreased on a daily basis if necessary. Another methodology for not over capacitizing is to develop strategic partners or suppliers that can help shave peak demand spikes or even permanent demand increases that are not strategic to the business. The best arrangement, although somewhat rare, is to work collaboratively with a customer to share the investment required to increase capacity to meet market opportunities.
For many of us who lead our companies, it is a challenge to see much past next month, let alone three to five years into the future. We may feel that we are doing well just to put together a plan with objectives and a financial budget for our next fiscal year. Unfortunately, if we are totally occupied on a day-to-day basis or only looking ahead one year at a time, it is unlikely that we will chart a course that will optimize the future of our businesses. If we are going to have a truly successful business, we need to find a way to grow in spite of a natural attrition of customers or projects that is an ongoing reality in today’s business world.
We need to pause periodically and plan strategically. While this can be hard work and requires both time and money, it is necessary to bring a brighter and more vital future into focus. The objective of a strategic plan is to build a market and project road map that will not only extend historical and market strengths, but also broaden the portfolio of opportunities.
Deloitte and the Manufacturing Institute recently reported that an estimated 600,000 skilled positions in advanced manufacturing are going unfilled. Few would view this reality as anything but a threat to American Manufacturing. There is good news to report, however. America has now awakened to the seriousness of this situation and many different groups are starting to address it. Once a major obstacle to the health of America’s livelihood is visible and recognized as critical, the energy and resolve by its citizens to address it can accomplish great things.
It is encouraging to see what is happening in the Chicago area. The absolute necessity of enlarging the availability of a skilled workforce has been embraced and many different entities are engaging in ways to deal with the two main facets of the problem: attracting people to careers in manufacturing and providing them with the skills needed to fill available positions. Many of our high schools, community colleges, trade associations, and other training institutions are enhancing their curriculums in manufacturing and offering certification credentials to students preparing for careers in manufacturing. Manufacturers are collaborating with these training institutions to identify the appropriate skills required to meet their needs. Manufacturers are also committing to hire interns during their training period with the opportunity to place them in jobs once the interns complete training. More than 20 Chicago and Illinois area community colleges are now collaborating to seek government grants to enlarge their facilities and establish programs to address the workforce training requirements for the future. Discussions have also begun about how to focus resources to provide more sophisticated equipment in training facilities and ensure that it is shared and utilized more efficiently.
Posted on: November 7th, 2011 by Warren Young No Comments
Fox Business News recently aired two segments about Acme Industries. Reporter Jeff Flock toured the facilities and interviewed both COO Guy Cassidy and VP of Sales and Marketing Bob Clifford. View the videos below.
Posted on: November 4th, 2011 by Warren Young No Comments
Acme Industries was recently recognized at the Entrepreneurial Excellence Awards, presented by the Daily Herald Business Ledger, with an award for Growth. This award was as much a reflection of the company as a whole as it was my own work. By helping lead a culture change at the 63-year-old company, Acme Industries has emerged as a leading manufacturer of precision components by taking our customers Beyond Precision. Our company growth is a testimony to the ability to find rewarding paths that many entrepreneurial companies encounter in their pursuit of success. Most importantly, we have built a very capable team that has been willing and able to adapt and change in order to take our company to new levels of performance in serving our customers.