3 healthy practices on the eve of a recession - manufacturing companies - WEB-CAB

3 healthy practices on the eve of a recession – manufacturing companies.

Recession. It’s a word we’ve been hearing a lot over the last months, and one that no one likes to hear. The world’s leading economists agree that it is at our doorstep.   

Recession means uncertainty, budget cuts, turmoil, but did you know that as uncomfortable as they are, recessions also bring opportunities? Here are 3 opportunities that a recession brings.

1- Regain control after the chaos

After the last 2 years where the economy literally overheated, where supply chains could no longer meet demand, where delivery times became unpredictable and where labor shortages prevailed, the economic slowdown will be an opportunity to regain control over operations.

The surge in demand has led to a kind of chaos that has affected most companies, especially those in the manufacturing sector. Good practices have been lost due to staff turnover, expertise has been diluted and ultimately manufacturing processes and/or work methods are no longer optimal. Take stock, identify where you have opportunities to improve and make a plan!

Question yourself:

  • Is this process optimal?
  • What are the best practices in my industry?
  • How often do we need to correct mistakes or redo work?
  • Where are our flaws or where could we get better?

It’s time to look at your processes and evaluate them, to use your team’s creativity and ideas to optimize your procedures and get the train back on track.

2- Invest in a management and automation system

When sales are in full swing, we tend to focus less on performance indicators, but when business slows down it is crucial to follow these indicators rigorously. For a manufacturing company, profitability is closely linked to productivity and product quality.

In some factories, robots have started to appear, while in others, paper and manual work is still very present. If this is your case, don’t be alarmed and make a plan to embrace technology. The good news is that you have great opportunities ahead of you to do more with less.

While robots are the ultimate step in automation, there are several less expensive solutions that can be implemented that will have a significant impact on your company’s productivity and profitability.

The very first step is to perform a diagnosis of your operations

  • Identify where you are losing profits,
  • Identify where there are time wasters or communication issues,
  • Identify where you could do better

Here are some questions to help you analyse your production:

  • Where are the bottlenecks that slow down our production?
  • How often do we make incomplete deliveries and must send a service team back to the customer?
  • How much does a delivery error cost our company?
  • How much time do our workers spend searching for parts in the factory?
  • When we need to adjust priorities, do we have an optimal method to inform all workers so that they work on the right projects at the right time?
  • How much time does our production manager spend checking the status of current projects?
  • What repetitive tasks could we automate?

This analysis will allow you to identify your priorities and in turn find the right management and automation tools.

3- Evaluate your cost price

The cost price corresponds to the direct and indirect costs that you incur to produce a good. It is therefore an excellent barometer for your company’s profitability.

The economy that has been operating at full speed during the pandemic has put many costing systems under strain due to changing and unpredictable variables. For example, shortages of certain types of materials forced many companies to quickly source new materials from new suppliers, and new suppliers mean different pricing and payment terms. These elements have a direct impact on the cost of production.

Whether you already have a system in place to evaluate it or not, the slowdown is an opportune time to review your costs. This analysis will allow you to better understand your profitability levers and to make important decisions such as reviewing your agreements with your suppliers, reviewing your pricing or reviewing your work methods. Do not hesitate to call upon your accounting firm to assist you in this exercise. They will certainly be able to guide you!

In conclusion: no one wants a recession, but if we have to go through one, let’s equip ourselves and seize the opportunities it offers us!


Veronique Plessis Belair – COO – Chief Operating Officer


Woodworking software technology for cabinets making  – WEB-CAB