What did surprise me was that the experts say the recession started in December 2007. Why didn’t somebody tell me sooner?
Then I wondered, if they had, would I have done anything different in 2008? In fact, if the first nine months of 2009 were to be as good as the first nine months of 2008, I’d sleep a lot better. So, does it matter whether we know we’re at the bottom of a recession or not? We just don’t know. It is what it is, so plan accordingly.
Let me pass along some ideas that have been shared with me for coping with this serious economic downturn.
The first of them is to maximize your efficiencies. It is the easier part of a two-prong plan, because we have experience in executing it. Cash is king. Keep a closer watch on your inventory turns. Make it a priority to monitor your accounts receivables and to make that uncomfortable call to the customer who has fallen behind. Keep a closer eye on all your customers’ financial positions. Some major companies are failing, and unless you are dutiful in keeping watch over market developments, any poorly performing customer can drag you down in the process.
Increase market savvy
Even with high efficiencies and good stewardship of cash, you cannot save your way to growth and prosperity. Step two requires more creativity. Focus on revenue generators and revenue creators, both internally and externally. Four areas in which to develop highly attuned market intelligence are as follows:
1. Look for processes your customers perform in-house, but whose staffing cuts have made internal packaging operations almost impossible to continue to do cost-effectively. Mandates for personnel reductions often are issued without regard for their effect on efficiency. Take over those processes to create revenue generation.
2. Inefficient competitors will perish in this economy. Know their customer base and develop relationships with these prospects. They will call you when their early warning systems signal possible trouble with current suppliers. Your efforts will generate more revenue.
3. Develop relationships with customers’ and prospects’ sales and marketing groups. These organizations create revenue; be ready to help them.
4. Form partnerships with packaging manufacturers, logistics providers, and package design firms to increase supply chain efficiency. These alliances enable those fewer people left at the customer company to interact with fewer suppliers. Make their job easier.
Many consumer-goods manufacturers either don’t have internal packaging functions or staff minimal in-house packaging operations. With the downturn in the economy, their focus and objectives are manufacturing-related, not service-related. Service and flexibility are at the core of excellence for contract packagers.
Logistics companies face the same scenario with packaging manufacturers. Partnerships, under the right circumstances, are a win-win-win proposition. Be the leader and the facilitator.
Design firms are especially busy these days, partially because of downsizing at CPG companies. Can you name three design agencies that could help you? These firms are in on the ground floor, and they can elevate you toward the top with them.
Be creative. Focus on revenue generators and revenue creators. Watch your cash.
Those who survive this downturn will thrive in the upturn