EXECUTIVE INSIGHTS: ROLF BIEKERT

CRITICAL ISSUES
Clearly, the critical issues all relate to the state of the economy. While the North American market is certainly bracing for tough times, it is not alone. This slowdown is definitely global: Europe, China, Japan, Russia, Brazil and India are all caught up in the current economic downturn.

A weakened U.S. dollar makes American-made goods more attractive in foreign markets. As the dollar strengthens against foreign currencies, the growth of manufacturing for export begins to decline. This means when the dollar experiences resurgence, such as it is now, its higher value curbs exports because U.S. products become more expensive.

These problems are not unique to our industry. Manufacturing activity overall slowed significantly during the first three quarters of 2008, and I believe it will come as no surprise to any of us when fourth quarter results, once they are released, indicate the slowdown has indeed intensified.

The question that weighs on everyone's mind, and for which, unfortunately, no one has an answer, is this: How long will this economic decline continue, and how deeply will it be felt?

INNOVATION IS CRUCIAL
Innovation and hard work are often underestimated during challenging economic times. Because people get caught up in news accounts and forecasts, they often become followers when true leadership is what's really required.

There is no doubt that our industry is facing a very real economic threat. Nevertheless, as professionals we must position ourselves in a good place, mentally and emotionally, where we do not succumb and react to every gloomy economic announcement that comes our way.

Instead of simply riding the waves, it is very important that we take responsibility for the success of our industry and respective businesses during such times – and work as hard as we can to be competitive. Now is the time to reconsider what we expect from ourselves and our society. While it may sound simplistic, it really does take commitment, innovation, hard work – and creativity.

For example, our company has developed a creative approach to the tightening credit situation. Through our Finance program we have developed innovative solutions to assist our customers with the process of funding the purchase of a machine. This is the kind of added value that manufacturers must deliver if they want to successfully navigate the murky waters of the economy.

CURRENT TRENDS
Going forward, competitive pricing is something that manufacturers must be keenly aware of in order to stay in the marketplace. The need for pricing products and services competitively will be driven by an increase in global competition and by new competitors entering the marketplace.

Furthermore, all efforts and expenditures in innovation should focus on smart design and reducing waste that increase value for the customer.

Automation will continue to be important for manufacturers. Flexibility and Just-in-Time inventory strategies, where production creates items only when needed, will be a key to lean manufacturing operations. No company wants excess inventory to become a drain on its return on investment.

Consolidation is a trend that bears watching during times when there is a decrease in overall demand. Although the trend has already begun, you can expect to see even more of it, with small companies merging with larger organizations – or even disappearing altogether.

Entering into partnerships with companies that are in positions of strength is another trend that will continue. Difficult as it may be in this current economic climate, you must remember that just because a company's products are inexpensively priced doesn't necessarily imply that you are getting a bargain.

You must do the research and know who you are doing business with. You must be sure to position yourself with strong partners, put your stake in place and set yourself up, not only for success in the present, but also in the future.

BE PREPARED
Remember: At the end of the recession – and there will be an end – changed dynamics will be in place and markets will have new, different requirements. You want to be ready to meet them, so make concrete preparations now. Don't sit back, ride the waves and let your company be tossed to and fro. Instead, work hard now to create and secure forthcoming opportunities.

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