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Should Industrial Metal-Cutting Companies Still Think Long-Term?

December 1, 2016 / , , , , , , ,


Over the last few years, uncertainty has plagued the manufacturing industry. Currency fluctuations, material costs, customer demands, labor shortages, and political issues are just a few of the factors feeding into an overwhelming feeling of doubt and apprehension among manufacturers.

Instead of fearing change, most companies have come to expect it. This has led many industry leaders to focus their efforts on becoming more “agile” so they can quickly respond to changing customer demands. As explained here in a blog post,  “agile organizations operate on a ‘sense and respond’ mode rather than the ‘predict and control’ mode.”

An agile company is able to take advantage of short windows of opportunity and adapt to fast changes in customer demand. According to a previously published blog, this tactic can be especially attractive for industrial metal-cutting companies that are trying to gain an advantage over offshore competitors.

However, the question is whether this renewed focus on agility should come at the cost of long-term planning. While short-term goals and gains are important, is it really wise for today’s manufacturers to ditch long-term strategic planning because the future looks uncertain? Does it really pay to be shortsighted?

An article from Forbes suggests that the answer to that question is no. According to the article, one of the top-five questions managers should ask during a strategic planning session is where they want to be in the next three years. “While some might balk at long term plans, they help people to frame a future vision,” the article states. “When teams don’t articulate long-range goals, they get trapped into incrementalism. Each year a little more growth is expected, a few changes are made and revenue and profit targets are increased. The result is a business that probably inches forward.”

According to an editorial from IndustryWeek, there are also risks associated with companies that are fixated on the short term. In fact, the article asserts that short-term goals can often lead to long-term problems. “I am a firm believer in capitalism but capitalism cannot thrive if we remain focused on short-term profits at the expense of long-term sustainability,” the article author states.

From an operational standpoint, this theory holds some weight, as short-term decisions can have long-term consequences. The white paper, Tackling the Top Five Operating Challenges of Industrial Metal Cutting, gives two examples:

While there is no question that today’s companies need to be able to adapt to change, long-term thinking and planning are still an important part of business success. An article from Harvard Business Review puts it this way:

“Don’t just say that the future is uncertain, and that you will act when it gets here. It is the responsibility of a forward-looking leader to share a point of view about the role the company might play in specific scenarios. Communicate how customers are changing, and how your organization can address those needs in the future.”

What is your company’s long-term point of view?