Sep 14 2016

Are You Ready For The Election? We Are.


presidential-cycle

Every year about this time, most New England sheet metal fabricators start to slow down. Some slow down earlier, some later, but we are all customer driven and customers don’t like lots of inventory at the end of the year.  In an election year, there is additional uncertainty and many customers reduce sheet metal orders even more than usual.  Did you know people actually track the “Presidential Cycle” for the stock market?

After running this business for almost 10 years, I have learned to plan for this down cycle, but there are some things you should know to benefit your business. First, check your pricing late in the year or early into the next year.  Some sheet metal suppliers might be more willing to lock in lower prices if it can improve their backlog.  Second, if you have steady business throughout the year, your business is very desirable.  If lower price isn’t as important, then make sure you get the right service that you are paying for.

Here is what we are doing to get ready for the next presidential cycle:

1. Increasing cross training. Our customers need flexibility and responsiveness in their sheet metal supply chains. The more cross trained we are, the more flexible capacity we have. In most cases we can TRIPLE our capacity overnight to support a surge in orders. This also means when orders drop we can quickly shift resources to other parts of the shop.

2. Reducing slow moving inventory. Most sheet metal business owners know that slow moving inventory is “sleeping money”. By using up our slow moving inventory we free up cash without affecting customer delivery dates. In fact, our costs can go down as we use older, some times less expensive material.

3. Improving productivity. Not only have we invested in technical training, but we are also investing in productivity training. In the last 7 weeks alone, we have implemented 9 improvement projects, trained 20 sheet metal fabricators as lean white belts, and implemented an issue resolution board to troubleshoot issues early.

No matter which candidate gets elected, we will have a new president and that will mean market uncertainty. It is hard to argue with a 100 year trend.  We think the best sheet metal suppliers for our industrial customers are the ones that accept that the next 2 years are going to be flat and prepare for that.  If things improve sooner, our cross training and productivity efforts will only help.

Need help preparing? Contact me at 978-486-9050.

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