Tougher & wiser in times of turmoil

While attending IMTS in September, it was nice to meet fellow machine shop owners and managers, many of whom expressed optimism and reported a robust year for their businesses. That was good to hear, considering our market is in the midst of a downturn and requires aggressive management to persevere.

Similar managerial efforts have been required during my tenure at a shop, but the ramifications of our market, combined with an unstable global economy, are widespread. Many competing shops are gone, and many manufacturing-related businesses across the board have been impacted. The good news is we’re tougher and wiser and we’ve learned to embrace the positive factors that present themselves in times of turmoil. Following are some interesting examples, for better or worse.

With conditions requiring a leaner workforce, we’ve learned it’s possible to have too many employees, even when you think you’re swamped with work. There always seems to be justification to add one more person. But when you scrutinize workers’ duties, the shop operations are commonly not running as efficiently as you hoped or assumed. This is partly because there are many workplace distractions, with personal electronic devices being the biggest culprits. They can waste an hour or more of each workday—your workday. When you add up the number of hours wasted over the course of a month or year, it becomes apparent you don’t always need more employees, you urgently need them to stay on task.

Also, it goes without saying that some customers’ net-90 terms aren’t conducive to the survival of a hard-working machine shop. Rejecting these terms and getting these customers to pay more quickly took some effort on our part. Most of these late-pays finally approved net-45 terms or better, including some who accepted a small discount for net-10 terms or cash payments.