The economic slump of 2009 has seen many companies struggling for survival. While some made it, others didn’t. This article provides some insights on what caused such a difference of performance, and provides simple guidelines to battle the economic uncertainty and financial crisis, especially for the manufacturing industries.
A research by Aberdeen used certain metrics to select the best performers. These best performers in the recession time had some commonalities, which was duly noted:
- 24% achieved reduction of the budget cycle time
- 108% achieved accuracy of actual budget to planned budget
- 68% finalized the budget at the beginning of the fiscal year
- 17% improved the profitability in the year
- 72% could re-forecast market changes
- 92% resorted to enterprise wide collaboration
- 70% had the visibility of internal process to drill down and improvise
To overcome such testing conditions, few TBDs are being suggested for firms in the manufacturing sector:
- Change management is a must. Try to improve time to decision based on newer models more suited to your business dynamics.
- Ensure that whatever IT investments which have already been made, are made best use of, to avail better returns. Often technology is purchased, but not used effectively.
- Invest on planning, budgeting, forecasting and customer relationship management applications which would be more suitable for the sensitive environment.
- Ensure the development of the ability to understand and react to sensitive changes develops across all the divisions/verticals of the firm.
- Ensure every employee is focused on understanding customer requirements. Acquiring new customer is 5 times more costly than retaining an old one.
Following these few simple yet effective steps would ensure that your firm does not fall prey to the economic disasters.