5 keys to survival after the recession

8/4/2019 5 Keys to Survival After the Recession

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A manufacturer's guide to modern technology,

process innovation and effective marketing


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2 | Surviving After the Recession

Surviving After the Recession

Te United States economy is slowly recovering rom the so-called Great Recession and manymanuacturers are looking to the uture. With a surge in international manuacturing, increasedcompetition has company leaders desperately searching or ways to survive and grow in todaysvolatile economy.

With manuacturers in mind, UniTerm is launching the 5 Keys to Survival Aer the Recessionebook. I you are looking to cut costs, raise prots, and make your mark in this ercely competitivemarket, this book is or you.

In this book well touch on:

Lean Manuacturing

Innovative manuacturing echnology

Reducing overhead costs while maintaining quality

Consistency vs eciency

Modernized marketing

I hope this inormation is helpul to you and your organization. Subscribe to the UniTerm Blog tokeep articles and resources like this coming.

Regards,

Dan SherrillOwner & Founder - UniTerm Insulation Systems


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3 | Contents

Contents

Lean Manuacturing ................................................................................................................................. 6

Innovative Manuacturing echnology .................................................................................................. 8

Reduce Overhead Costs & Maintain Quality ...................................................................................... 10

Consistency vs Eciency ....................................................................................................................... 12

Modernized Marketing .......................................................................................................................... 13


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6 | Lean Manufacturing

Lean Manufacturing

In a recently released report, McKinsey & Companyattributes almost 50% o all US productivity

growth since 2000 to manuacturers. Te manuacturing industry also experienced a lower amounto job loss during the recession than any other industry. Tese statistics are likely reective o theact that manuacturing companies are increasingly developing lean manuacturing processes todevelop more agile, ecient operations.

What does lean manufacturing really mean?

A quick Google search reveals that lean management, also known as lean production or leanthinking, is a production practice or maintaining product value while doing less work.

Beyond the literal denition, lean manuacturing is really a company culture or philosophy

centered around nding ways to:

Reduce waste and overhead costs

Improve worker eciency

Manage inventory

Waste & Overhead Cost Reduction

Lean production requires that companies go beyond yearly budgeting and planning to reducewaste and unnecessary spending. Companies must seek to eliminate waste at every level o the

production process, which includes company participation o all employees.

Auto giant oyota operates one o the most widely known lean production systems worldwide.As described in the Harvard Business Review, the oyota system is one where every activity,connection, and production pathmust have built-in tests that signal problems immediately.

From plant workers to process managers, manuacturers must seek out waste in the orm o errors,deects and especially unnecessary production steps. Companies must open communication linesbetween upper management and those on the production oor in each acility or location.

Massachusetts based plastics manuacturer Mayeld Plastics cites quality control as a key

component in their business strategy post-recession. Led by a manager with 25 years o experiencein automotive quality control, Mayeld Plastics quality control approach includes plant workers,supervisors and even their customer service team. Mayeld Plastics waste reduction eforts haveled to an increase in prots and a signicant boost in customer satisaction despite our strugglingeconomy.

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http://www.mckinseyquarterly.com/Why_US_productivity_can_grow_without_killing_jobs_2748http://hbr.org/product/decoding-the-dna-of-the-toyota-production-system/an/99509-PDF-ENGhttp://www.mayfieldplastics.com/http://www.mayfieldplastics.com/http://hbr.org/product/decoding-the-dna-of-the-toyota-production-system/an/99509-PDF-ENGhttp://www.mckinseyquarterly.com/Why_US_productivity_can_grow_without_killing_jobs_2748


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7 | Innovative Manufacturing Technology

Specialized, Efficient Manufacturing

Another method o implementing lean manuacturing is dividing workers into specialized workcells, or groups. Workers in small, specialized groups perorm their tasks more eciently whenthey concentrate their eforts in a specic area and avoid wasting production time. I an employeeseforts are concentrated in just one area, they become more likely to notice mistakes and discoverimproved techniques.

Inventory Management

An essential method o implementing lean manuacturing process involves controlling inventoryand reducing excess production. Many manuacturers produce products in large runs, even when

the demand or that products is low. Products are stored or kept in inventory until the goods aresold, oen leading to overspending on storage. When production runs are too large, manuacturersrun the risk o lling inventory with products that might become outdated.

Lean techniques involve implementing a system or monitoring inventory and producing goodsin smaller runs rather than keeping excess inventory in storage. Te savings rom reduced storagecosts and elimination o waste generally outweigh time and costs o equipment setup changes,resulting in overall savings or manuacturers.

Implementing lean manuacturing techniques substantially lowers overhead costs and engagesemployees to think critically about process improvement.


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Innovative Manufacturing

Technology

What do radios, neoprene, instant photography and nylon have in common? All weredeveloped during or slightly aer the Great Depression and drastically changed the courseo manuacturing history as manuacturers desperately sought ways to eciently producegroundbreaking new products.

Innovative Technology

According to Boston Consulting Groups Innovation 2010 report, innovation in manuacturing

is vital to your survival as a manuacturer aer the recession because your competitors arethemselves working very, very hard to become more innovativethey, too, see innovation as a topstrategic priority.

Companies in countries like Brazil and China are increasingly investing more in it, and haveredoubled their eforts in order to be positioned to thrive in the recovery, making R&D moreimportant now than ever beore.

While many are reluctant to budget money or R&D, researching more ecient ways to createproducts can lead to substantial savings. Oen, existing employees already have ideas that couldlead to improvements or even a revolutionary new product line.

Companies can develop agile and adaptive manuacturing systems by including modeling andsimulation tools into design processes and installing superior sensor and part genealogy systemsto detect errors or deects beore they efect an entire production run.

Once just a dream o the uture, robots and automation equipment help manuacturers maintain acompetitive edge. Te video below highlights industrial applications or robotic solutions.

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http://www.bcg.com/documents/file42620.pdfhttp://unitherm.com/fire-protection/research-and-development?utm_source=blog&utm_campaign=recessionserieshttp://unitherm.com/fire-protection/research-and-development?utm_source=blog&utm_campaign=recessionserieshttp://www.bcg.com/documents/file42620.pdf


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While UniTerm does not have a business relationship with FANUC Robotics, who has sold more than 100,000 robots

in the Americas, we are in awe o the potential benets their robotic systems ofer to manuacturers.

Mass Customization

In the last twenty years, developments in mass customization have led to ecient and exiblecomputer systems that enable manuacturers to create highly-customized products or end-users

at the price o mass produced products. Mass customization o products enables manuacturersto engage customers on a higher level and opens up additional marketing opportunities acrossmultiple channels.

With the recession just behind us, companies might be hesitant to invest in what they see as riskyresearch and technology, but in reality innovation is a major key to survival and maintainingrelevance in tomorrows market.

click to play
http://www.fanucrobotics.com/http://www.youtube.com/watch?v=rBjgYAMtf5U&feature=player_embeddedhttp://www.fanucrobotics.com/http://www.youtube.com/watch?v=rBjgYAMtf5U&feature=player_embedded


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10 | Reduce Overhead Costs & Maintain Quality

Reduce Overhead Costs & Maintain

Quality

Aer surviving the recession, most manuacturing companies understand the importance obudgeting and reducing overhead costs all too well. Unortunately, with energy and transportationcosts rising more each day, some companies look to cut spending on vital research andinnovations.

In the long run, reducing spending on product research and development can cost manuacturerssignicantly more as they struggle to compete with growing international manuacturers. Howcan companies shrink their budget without sacricing product quality and innovation?

Crowdsourcing IT and HR Tasks

Te last ew years have shown a notable increase in outsourcing o human resources andinormation technology departments as companies seek ways to shrink company budgets withoutlosing the skilled workorce they need to operate. Contracting third party companies or HRand I needs enables manuacturers to ofer superior benets and take advantage o improvedtechnology at a much lower rates.

In a discussion about thevalue ooutsourcing human resources, business specialist Renu Chopradiscusses the exibility o outsourced programs because they can turn relatively xed HR costs

into variable costs that can scale with business changes such as acquisitions, divestitures, growth innew markets and contraction in times o economic downturn.

In addition to the overall costs o outsourcing these departments, companies benet as HR and Irms work to improve quality o service and resources to remain competitive. Working with anagile, adaptive third party allows companies to ocus spending and time on growing their businessrather than updates and training or stagnant in-house departments.

Reducing Energy Costs

Another major opportunity or reducing overhead costs without a reduction in quality lies in

reducing energy costs. For many manuacturers, energy costs almost equal that o workorce costs,yet most manuacturers spend little to no time on energy reduction eforts. With energy costson the rise, reducing energy waste and consumption should play a major role in manuacturersbudget cutting plans.

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http://www.theoutsourceblog.com/2010/08/hr-outsourcing-balancing-the-value-equation/http://www.theoutsourceblog.com/2010/08/hr-outsourcing-balancing-the-value-equation/http://www.theoutsourceblog.com/2010/08/hr-outsourcing-balancing-the-value-equation/


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11 | Consistency vs Efciency

Te chart above compares the average percentage o manuacturing overhead costs to the average percentage o time spent

on cost reduction eforts.

Energy ecient products like UniTerms High Temperature Insulation Systems oen providesignicant energy savings within as little as a year. State organizations and utility providers acrossthe US ofer incentives, rebates and other orms o nancial assistance to manuacturers thatofset the cost o implementing energy eciency systems and considerably increase manuacturers

ROI.

Preserve Quality

Crowdsourcing HR or I tasks and reducing energy costs provides a simple solution or loweringoverhead costs without sacricing quality. odays competitive market makes maintaining andimproving product quality a necessity or any manuacturer. Manuacturers like Mayeld Plastics,a Massachusetts based plastics manuacturer, are improving quality control processes and movingtoward implementing ISO production standards.
http://unitherm.com/energy-efficiency?utm_source=blog&utm_campaign=recessionserieshttp://unitherm.com/blog/2011/03/energy-rebates-exponentially-increase-roi/http://www.mayfieldplastics.com/http://www.mayfieldplastics.com/http://unitherm.com/blog/2011/03/energy-rebates-exponentially-increase-roi/http://unitherm.com/energy-efficiency?utm_source=blog&utm_campaign=recessionseries


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12 | Consistency vs Efciency

Consistency vs Efficiency

Manuacturers looking to dramatically increase prots must constantly reduce overheadcosts and increase product output. Achieving this is oen much easier said than done and in

order to meet goals or short-term growth, many manuacturing leaders ocus on the short-termsolution o pushing employees to work harder, aster and more eciently.

o actually generate sustained growth, manuacturers must ensure that workers consistently ollowprocesses and ully document problems so that management teams can review solutions, identiycostly tasks and improve procedures.

Documenting: A Path to Success

Documenting and analyzing procedures requires a hybrid orm o technical writing that involvesmany levels o company participation. raditionally, companies outlined processes and hired atechnical writer to create a static training manual or employees to ollow.

oday, manuacturers who wish to implement and maintain an agile, responsive system oprocesses must outline a set o procedures via a company intranet or meeting-place or employeesand team-leaders to contribute inormation about process ailures and solutions.

In a shining example o the value o this type o communication, John Snow rom sofwarecompany Enigma corporation addresses common challenges or maintenance proessionals

in the aircra, aerospace and heavy equipment industry in his UptimeBlog. Enigmas sowareconnects technical manuals, service bulletins and detailed inormation about repairs with supplierparts catalogs, so that maintenance proessionals eciently perorm repairs.

Te Enigma system, which any manuacturer could implement, links common problems, detailedinormation about how the problems were solved, and a clear outline o total time spent workingon each problem.

In order to develop a clear picture o each steps impact on a manuacturing procedure, employeesmust consistently perorm tasks according to outlined procedures to eliminate errors or waste.

eam leaders or managers must work with employees to test and document potentialimprovements or a leaner manuacturing process. Tis provides manuacturers with detailed setso data to analyze and a tool or measuring large and small-scale production improvements.

Valuing consistency over eciency enables manuacturers to ocus on key improvements that leadto sustained growth rather than short-term production eciency strategies that neglect to addresswaste.

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http://unitherm.com/blog/2011/07/5-keys-to-survival-after-the-recession-lean-manufacturing/http://www.enigma.com/http://www.enigma.com/http://uptimeblog.enigma.com/http://uptimeblog.enigma.com/http://www.enigma.com/http://www.enigma.com/http://unitherm.com/blog/2011/07/5-keys-to-survival-after-the-recession-lean-manufacturing/


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13 | Modernized Marketing

Modernized Marketing

Since Americas emergence rom the Great Recession, companies have begun examiningproducts more closely to ensure protability. As manuacturers strive to implement innovative,

lean production processes, they must also look to modernize marketing eforts by developingappropriate and relevant products and nding ways to eciently connect with a larger market opotential customers.

Understanding and Nurturing Company Resources

Critics o the US economy doubt the easibility o American industrial growth due to stifinternational competition, rising costs or taxes and government restrictions. However, oneEuropean country has overcome the same obstacles acing American manuacturers.

Germany, a country with ew natural resources beyond its workers, stands as a powerul exampleo industrial success during the Great Recession. Rather than engaging in a price war with Chinesemanuacturers, who boast the advantage o lower labor costs and ewer government restrictions,German companies ocus on developing quality products in high demand.

Germans manuacturers maintain their distinctive level o crasmanship by investing heavilyin their highly-skilled workorce. By ofering the superior luxury cars the Chinese want and theunsurpassed production equipment that the growing international market needs, the Germans aresucceeding despite the challenges they ace.

It is possible or American manuacturers to recreate this model or success, but to do so companyleaders must understand and use market demands to their advantage and nurture the resourcesthat allow them to distinguish their products rom their competition.

Lean, Effective Marketing Strategy

Just as with innovation in production processes, developing an ecient marketing strategyrequires that manuacturers implement new technology and test their results each step o the way.

Many manuacturers are moving marketing eforts online, which broadens their potential reach.

As compared to traditional marketing eforts, online marketing generally ofers a much higherreturn on investment and better tools or tracking marketing results.

Modern marketing technology also ofers companies the opportunity to build relationships andand discuss product value with potential clients through social media sites like witter, Facebookand Youube.

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14 | Modernized Marketing

Plastics News blog editor Don Loepp recently highlighted the notable social media presence o

E&T Plastics, distributor o plastic sheet, rod, tube and lm plastics. Te 65 year old companysmove towards online marketing, led by E-Commerce Manager Pam Aungst eubner, enables themto build trust and relationships with a large group o potential clients.

rue understanding o customer needs requires a conscious efort in researching their needs andthe options that your competitors ofer. In todays economy, manuacturers must develop andmaintain an open line o communication with clients, which can be achieved by online marketingand social media eforts.
http://www.plasticsnews.com/blog/2011/06/what_can_you_learn_from_the_pl.htmlhttp://www.e-tplastics.com/http://www.e-tplastics.com/http://www.plasticsnews.com/blog/2011/06/what_can_you_learn_from_the_pl.html

5 keys to survival after the recession

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