Team 1 Plastics, a plastic injection molding company for the automotive industry, is thrilled that Dianna Brodine, operations director and managing editor for Peterson Publications, Inc., graciously agreed to be a Guest Blogger for the Plastics Pipeline blog. The following is her reflection on the Great Recession of 2008 and some lessons to remember.
As the managing editor for The American Mold Builder, Plastics Business, and Plastics Decorating, I’m able to follow plastics industry trends from tooling creation to processing to final decoration and assembly. The publishing company for which I work also has projects in the printing and travel industries, so when the Great Recession hit in 2008, we watched our magazine advertising revenue fall – one industry at a time.
Almost immediately, the auto industry crashed, putting stressors on the tooling and plastics processing industries. The plastics decorating and assembly industries were less affected in the early stages of the recession as those companies continued to work through inventory that had already been manufactured and delivered for secondary processes, but they felt the crunch as the downturn continued. Then, as the recession began to impact all sectors of the US, marketing and promotional efforts slowed, and the print industry suffered. By early 2009, the travel industry had seen a dramatic downturn as consumers tightened their belts in response.
At that same time, in March of 2009, the federal government stepped in to bail out the automotive industry. The mold building and plastics processing industries started the slow climb to full production and, shortly after, decorating and assembly companies saw improvements in their balance sheets. As manufacturing ramped up to near pre-recession levels, print production increased as companies once again began marketing their products to consumers, who were feeling comfortable enough to again resume vacation and work travel.
While it wasn’t a fun two or three years to live through, it was interesting to watch from a publishing perspective!
I’ve interviewed scores of manufacturing business owners in the years since the Great Recession and have asked nearly all of them about the lessons learned. Unnecessary expenses were cut from budgets, strenuous effort was put forth to implement lean operations strategies, work forces were “right sized” and many businesses ceased operations altogether.
However, I also heard stories that tell me not all of the lessons were related to production and cost reductions. And, seven years from the leanest times, some of those lessons are being forgotten as companies on all sides of the manufacturing equation get caught up in the excitement generated by high demand and improved bottom lines.
In my opinion, the companies that emerged stronger and healthier from the Great Recession – and remain in a solid position today – knew these things:
Relationships with customers and suppliers are just as important as contracts. When the downturn hit, the companies in the strongest positions were those with deep relationships with both customers and suppliers. They communicated early and often, and created a partnership to protect each other from the worst of the slowdown. Today, I hear about supply chain issues, unexpected equipment breakdowns and even disaster recovery efforts – and, the success of the company’s recovery all depends on the strength of its relationships. Does the company work in partnership with its suppliers to quickly find a solution? Do the company’s customers trust in the ability of their manufacturing partner to find a quick solution without compromising quality and minimizing the impact to delivery times?
No relationship is bulletproof, but customers and suppliers will work most closely with those they have the strongest relationships with – and strong relationships are built in the good times, not the hard times.
Employees should be developed as the company’s most valuable resource. The people who will carry any business through a downturn are the employees you have now. I can’t tell you how many stories I’ve heard of production line employees who came up with significant cost-saving ideas, maintenance staff who were able to keep machines up and running when new equipment wasn’t in the budget and HR personnel who stretched resources to keep as many employees as possible on the payroll. It’s the employees with a loyalty to the company – those who feel valued and a part of the operational success – who will rally when something goes wrong.
Now is the time to encourage that sense of loyalty. Step up training efforts, hold daily or weekly meetings to share company metrics and ask for feedback now about improvements that could be made. Employees are the ones who make sure the ship doesn’t sink, but the company is responsible for teaching them to row.
Companies that learn together are stronger together. It’s no secret that my favorite industry event – and I attend a lot of conferences and tradeshows! – is the MAPP Benchmarking & Best Practices Conference, held each October in Indianapolis. Last year, nearly 500 processors came together to hear leadership experts and their own peers talk about challenges, solutions and victories. For two days, competition is set aside (with the appropriate anti-trust reminders) as the industry gathers to share strategies that can help everyone succeed.
Opportunities like this exist everywhere – local Chambers of Commerce or business groups, regional manufacturing association chapters, industry tradeshows, and even online through blogs like this one and LinkedIN groups. The saying is, “A rising tide lifts all boats” – and many of the manufacturing professionals I talk to can point to at least one piece of advice shared by a fellow industry member that made a significant difference in their own business operations. Now is the time to find those resources – be willing to listen AND teach.