These days it can seems as if everything is working against the manufacturing sector. I could go into all of the challenges manufactures are facing these days however, if you are in manufacturing you know first hand what is happening. The question is; what do you do?  Well the answer may be simpler then you might think and, it may not have to include major capital investments. It does however; take an unwavering commitment to succeed and tenacity to see it through.  It is not easy!

The first question you have to soul search is, Do I still want to own / run a manufacturing company? To be able to turn around a company to compete  - and win - in this Global marketplace; starts with the Key stakeholders of the company wanting to be in business. They need to honestly ask this question. I know of owners of companies who have had a good run over the last 20 - 30 years and are financial set.  So, does it make sense to carry on or to retire? If the answer is "Yes", Lets carry on! Then the next question to ask is, "How long do we have to turn around the company?  This question is personal and may take some time to answer.  Make sure you look at this question from all angles - cash flow, sales figures, Actual cost of product, etc..  These 2 questions are important, as they will determine what approaches your company can take and how much money is available and when.

So were do you start?  Well the first thing you can to do is get control of your manufacturing costs both variables and fixed. If you are selling the majority of your product to the Unites States then you are some how going to have to neutralize the Canadian Dollar.  In the past the Canadian dollar was relatively stable and took months if not years to raise or fall a few cents.  Canadian companies could count on the dollar being stable and most used the Canadian dollar as an advantage to compete against American companies. Not any more, look at the swing the dollar took in the last 52 days April 01, 2009 the Canadian dollar was trading at $0.79*. This past Friday May 22, 2009, the Canadian dollar was trading at $0.89*.  That is 10 cents in 7 weeks.  That hurts! There are various ways to minimizing the effect of the dollar.  You may want to talk to a Currency expert to understand what strategies are available. 

There is another way that most companies fail to think about when it comes to the Canadian dollar; that is lower your cost per unit through productivity improvements.  When you read "productivity improvements" what was the first thing that came to your mind.  Was it Technology, Business Processes, Innovative Culture, Efficiencies, Research and Development? 

All of these areas need to be working in harmony to be able to sustain ably improve your profit through productivity improvements and neutralize the swing in the rising dollar. We will talk about were to start in the proceeding parts.

* - Source, Bank Of Canada Website