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FLEXO Magazine : January 2009
PLANTS & PROCESSES Surviving a Recession Keeping Manufacturing Profits Up when the Economy is Down By Hugh Pinkus R ecession, the “R” word—it’s everywhere. Any time condi- tions are favorable for an economic downturn, it becomes as dirty a word as anything heard on “The Sopranos.” The difference is that network television can and will often use this term. You can’t surf through MSNBC,CNN, or even the local news without hearing a reference to the mortgage crisis, rising energy prices or falling consumer confidence. But recession does not have to be a dirty word. With the right foresight, planning and action, many manufacturing companies not only survive an economic downturn, they can benefit in the long run due to the new processes initiated such as labor optimization and inventory control, created because of it. STAY OR GO? The first step in preventing an economic downturn from cutting into your profits is to conduct a stringent analysis and streamlining of your company’s cost structure. The administrative and operational infrastructure of all organizations tends to grow in good economic conditions, but rarely is that matched with swift reduction when business volume ebbs. Understanding your company’s cost structure is essential for reducing or eliminating costs that don’t impact sales. Both client- facing and support staff are involved in indirect expenses on a day-to-day basis. They are an excellent resource for identifying wasteful practices. An organization-wide approach to removing no longer necessary direct expenses and reducing newly unneces- sary indirect expenses is the best way to ensure success. Employee morale is crucial to ensuring that productivity remains strong and that the corporate environment remains upbeat. 44 FLEXO JANUARY 2009 www. f le xography. org
End of Year 2008