CNC Manufacturing Sees Opportunity During Economic Downturn

Industry Trends Lead to Unpredictability

Stock markets are fickle at best, and industry is currently uncertain about political leadership and direction. The result is that investors are acting in a reactionary manner. Raw materials (commodities) and energy product prices are being driven downward due to increased supply, which should be great for business. However, uncertainty leads to less demand and more market selloffs. In view of this, it is important to utilize market metrics that are very specific to your industry.

Gardner Business Index

At Protomatic, we participate in providing raw data for one of the best indexes for metalworking industries, the Manufacturing Index that is compiled by Gardner Business. This index is specific to metalworking industries and is helpful in understanding business direction on a national level. This index has reported a business contraction for the last nine months. But we have noticed other observations in regard to business direction. The two observed business directions have been Reactionary and Steadfast. Let me explain.

Businesses are Reactionary

Reactionary businesses include those found in the energy and energy development segment. These businesses are in forced survival mode due to the price of crude oil. These companies have moved from a lucrative market to a fiercely competitive market overnight. This created a need to severely cut back on all expenditures including new development and core labor. They are in survival mode.

Businesses are Steadfast

The second most interesting observation is that even though the political and economic markets are in turmoil, businesses reevaluate the environment and formulate new plans in view of the circumstances. These uncertain times give business leaders a time to think and regroup, then implement a solid business approach and a steadfast focus on the future goal. One example is creating a clear focus for market direction.

It has been observed that manufacturing-based companies continue or even accelerate the development of products. Another observation is in control of inventory. Although most prevalent at year end, adjustment of inventory is common during this economic time. It is time to work on the “little stuff”, you know, the smaller return on investment (ROI) projects.

Making the Most of Slow Times

I think we are much more focused on making real improvements during uncertain and slow times. This is the positive feature of a slowdown. We will pursue a new direction or fix an unattended project or improve a new process or create a new product.

What is Protomatic Doing?

The neat thing is that the CNC manufacturing industry is highly flexible and agile, and able to convert and redirect our efforts for the success of our customers. Some of the programs in place at Protomatic for 2016 include working on special projects to gain efficiency, 5S programs to improve organization, and implementing new process based software. Additionally, we are conducting skills based training on new equipment with a Gen X and Gen Y focus, and implementing automation plans in an effort to reduce cost. These efforts lead us to continue providing Life-Saving Precision in all aspects of our business.

What Can You Do?

During this time of slowdown, focus on the incremental ROI projects that may not have been getting sufficient attention when everyone was so busy. This can lead to real measurable improvements in areas such as product innovation, quality, and manufacturing efficiency, which will in turn improve your company’s bottom line.

About the author: Doug Wetzel is Vice President and General Manager of Protomatic. Protomatic is a CNC precision machining shop specializing in prototype and short-run-production components for the medical, aerospace and other technical industries. Because of the critical nature of the parts they design and manufacture, the emphasis is always on Life-Saving Precision.