8 Ways Manufacturers Can Manage Costs and Prepare for Future Growth
8 Ways Manufacturers Can Manage Costs and Prepare for Future Growth

8 Ways Manufacturers Can Manage Costs and Prepare for Future Growth

It’s no surprise that many manufacturers are struggling: worldwide lockdowns have hurt demand while all-important supply chains have been badly damaged by factory shutdowns, particularly in China. At the same time, many businesses have been forced to temporarily cease operations, with remote work not an option. Businesses are hurting and even a quick return to normal won’t fix things.

View 8 Ways Manufacturers Can Manage Costs

Challenges Ahead

Stay at home orders, radically reduced demand and disrupted supply chains are putting enormous pressure on the manufacturing sector. No matter how the upcoming months play out, manufacturing will be dealing with the ripple effect of this public health crisis for a long time. To help, we are sharing a checklist of cost-cutting solutions for the manufacturing industry.

Checklist for Manufacturing Success

Businesses across the whole economy (and not just in America) are facing similar challenges. Businesses will rely heavily on the experience and expertise of CFOs and finance teams. And they won’t be working alone; HR will play a major role in guiding and communicating tough decisions.

Here’s a preview of what’s covered in the guide:

  • Short-Term: Prioritizing Survival
  • The first step for any CFO will be to secure short-term security. This is about finding ways to increase cash flow (like recycling and selling raw waste) but also reducing outgoings. Is it possible for you to defer capital spending or renegotiate rent and debt obligations?

  • Medium Term: Becoming a Leaner Organization
  • Once your day-to-day existence isn’t in doubt, it’s time to consider the medium-term (which likely isn’t looking too pretty either). The good news is, you’ll be in far better shape if you can find efficiencies. Possibilities include outsourcing payroll, considering a TPA (Third Party Administrator) for benefits or reducing employee hours. Even if workforce reductions are unavoidable, you’ll still want to be strategic.

  • Long-Term: Preparing for Future Success
  • The unique circumstances that created this economic crisis mean it’s hard to predict exactly when a recovery will come and how it will look. When growth and demand does return, manufacturing businesses have to be ready to take advantage and that means making the right preparations now. A big part of this is to invest in frontline managers.

Business leaders in manufacturing are under pressure. CFOs and HR will have to work closely to make the choices that secure companies’ long-term futures. Everything is on the table—use this guide as a checklist to make sure you’re considering all possible options.

More to Discover

The Ins and Outs of Small Business Start-Up Costs

The Ins and Outs of Small Business Start-Up Costs

The thought of owning their very own successful small business is an exciting dream for a lot of people. The appeal of not answering to anyone, aside from customers, can be a real driving force for someone who wants to step away from a 9-5 job. Before stepping away from a stable income, however, potential small business owners need to take a step back and think about the actual costs to get started. We’ve compiled this handy list of financial considerations to think about prior to taking the big leap into ownership.Before you can even start, you need to know these three things: What is the product or service you want to sell? Who will be your ideal customers or clients? How do you plan to get the word out about your business? Your...

Take Our HR Benchmarking Quizzes

Take Our HR Benchmarking Quizzes

Paycor's research shows that 75% of high-functioning HR teams spend their time on mastering key pillars of HR excellence. Want to know how your team stacks up against others? Take our benchmarking quizzes to find out and get customized action plans based on your results. Recruiting Benchmark Quiz Benefits Benchmark Quiz Labor Costs Benchmark Quiz People Management Benchmark Quiz Compliance Benchmark Quiz

Webinar: COVID-19 and Unemployment Cost Management

Webinar: COVID-19 and Unemployment Cost Management

With unemployment across the U.S. skyrocketing, Ohio and 18 other states are revising unemployment laws to ease the burdens of Americans everywhere. How will these laws affect business owners? What do leaders need to do to remain compliant? Watch this webinar to learn more. Speakers: Ezrie Yellin and Katie Watkins Ezrie has worked in the HR compliance industry for 15+ years. He works across HIREtech’s technical and business teams to ensure that all products and services deliver the best user experience while enabling compliance across the employee life cycle. Katie leads the client relations team at HIREtech for several products, including Unemployment Claims Management. Her proficiency in cultivating processes that bridge the gap...

9 Ways to Manage Costs - Infographic

9 Ways to Manage Costs - Infographic

HR and business leaders are looking to cut costs—but cut too deep, or in the wrong places—and you’ll pay for it down the road. Check out this infographic to learn the 9 ways business leaders can manage costs and return to profitability in the future. Forego Discretionary Spending Develop a 90-day cashflow forecast based on your fixed and variable costs. Then, stress test the forecast against best/worse-case scenarios. You want to get a sense of how much (and where) you need to cut. Reduce Extra Supplies & Inventory Reevaluate inventory and supplies from the bottom up—ask what you need, rather than what you can reduce. Consider both best-case and worse-case scenarios: running down stocks might leave you unable to meet the demand of a...