Recession isn’t all doom and gloom, with every hardship there is a lesson to be learned and an opportunity for improvements to be made. It doesn’t have to be all doom and gloom!
In the words of Albert Einstein, “In the middle of difficulty lies opportunity”.
According to a recent survey by PwC, the UK manufacturing sector is emerging from the recession stronger and leaner than ever. PwC found that leading manufacturing businesses were not only able to improve working capital by up to 15% in the recession, but also to improve gross margins by 1.5% through cost saving initiatives.
Specifically the PwC survey finds that manufacturing companies have become more efficient by:
• Preparing for a range of potential outcomes through robust scenario planning for up to 10%, 20% and 30% declines in revenue
• Aligning incentives to cash and working capital performance to ensure they were ‘top-of-the-mind’ within management teams
• Realigning their manufacturing base including accelerating the shift of either manufacturing plants and/or commodity products to Lower Cost Countries (LCCs) or temporarily in-sourcing product to fill excess capacity and retain skilled workforce;
• Reducing headcount, averaging 10% across companies reviewed
• Directing the product mix towards markets more resilient to cycle and downturn (and increasing prices in these markets);
• Multi-skilling the workforce to increase flexibility, improve utilisation and avoid losing skilled resources
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