How Industrial Metal-Cutting Companies Can Navigate the Ups and Downs of the Market

October 1, 2015 / , , , , , , ,

All year long, the manufacturing industry has had its sights set on a healthy 2015. As we reported in April in our 2015 Industrial Metal Cutting Outlook, all signs pointed to a full economic recovery. According to the latest data from MAPI, GDP is growing and will continue to grow in 2016.

The good news is that many manufacturers and industrial metal-cutting companies have felt the benefits of the improving economy and experienced increased demand; however, others are a little disappointed with the way the year is turning out.

According to the Institute for Supply Management’s September PMI report, economic activity in the manufacturing sector expanded in September for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month. However, 11 industries, including primary metals and fabricated metal products, contracted in September. One fabricated metal producer told ISM that it had “concerns about the China downturn and its effect on our consumer confidence.” Another manufacturer in the primary metals segment said that it continues to feel the impact of the oil and gas market slowdown. “Aerospace demand has also been slower than expected,” the company added.

Meanwhile, factors like the upcoming presidential election and unstable foreign affairs continue to feed into uncertainty, leaving manufacturers conflicted about how they should manage their operations. Should they prepare for increased demand or play it safe now that growth has been slower than expected?

Of course, there is no silver bullet answer to this question, but there are some ways that companies can strategically navigate the ups and downs of the market. Below are just a few ways industrial metal-cutting companies can adjust to market “ups” and expand when needed, while also preparing for the potential “downs” and changing conditions.

The Ups
When business is booming and orders are up, it’s easy to get overwhelmed by increased demand—especially after several slow months. However, there are ways manufacturers can adjust. U.S.-based automaker Ford, for example, recently cut its traditional two-week summer break short to meet demand.

IndustryWeek offers five ways manufacturers can take advantage of the uptick without making any monumental changes to their operation:




The Downs
In a cyclical business like manufacturing, a slowdown is inevitable. However, most manufacturers don’t know how to prepare for market shifts and, as a result, fail to strategically adapt when conditions change. The answer, according to one Forbes article, is to embrace uncertainty.

“In our experience, the most effective leadership teams develop a clear and actionable portfolio of strategic actions that balance commitment with flexibility,” Martin Toner, a partner at Bain Insights, writes in the Forbes article. “Instead of relying on a planning exercise defined by conditions at a discrete point in time, they commit to a cycle of ‘execute, monitor and adapt,’ redirecting the company toward the best opportunities over time.”

Toner goes on to offer four ways companies can form a strategy around uncertainty:




How do you navigate the ups and down of the market? What strategies do you find are the most successful?