Jim Connett, on June 10, 2020, 11:32 AM
Business Cycles in Manufacturing: A Commentary
I remember the first time my actions as a new fab operator led to an entire cassette of broken silicon wafers. I remember the fab, the bay, the tool name, the tool location, the recipe on the tool, and the process. To this day, I hear the sound of each silicon platter breaking under the strain of a robot arm that refused to get out of the way of the cassette being lifted in a perpendicular direction.
I also remember the forward-looking manner in which the situation was handled by my superiors.
In the early months of 2020, countries around the world seemingly hit the red economic and social EMO (“emergency machine off”) buttons by closing their businesses temporarily in an attempt to keep people safe during the COVID-19 pandemic. The normal rhythms of life came to a sudden, silencing halt. During the early weeks of powering down facilities and moving to a work-from-home model, many found themselves standing in the middle of the intersection of Expected Street and Unexpected Avenue, where what SHOULD be happening and what IS happening were quite different.
I walked into the administration building. Even though my head hung low in disbelief of what had just happened, I knew I had to inform my superiors. My feet seemed to know the way through the various walkways formed by perfectly aligned half-high walls marking the boundaries of each office. I found my boss in his office along with a senior automation engineer. I don’t remember much what my boss said to me…nor what I said in the way of explanation for this misprocess, but I do, to this day, generally remember the automation engineer’s first words directed at me during this inquiry. He said, “These things happen. What happened to you could have happened to anyone at any time. I’m not here to blame or point fingers. I’m here to see if I can make a change to the systems today to help all of us come out of this situation stronger and better prepared.”
Responding to Business Cycles in Manufacturing
In December 2019, no one expected entire workforces would soon be working remotely. No one expected or wanted industries to come to a standstill, but that is exactly what happened a few months into the year 2020. Everyone would have preferred returning to work and the normal rhythms of our careers as equipment engineers, automation engineers, managers, floor operators, and production planners, but the pandemic stood in our way and resulted in a contraction synonymous to the cyclical nature of the manufacturing world.
Tips for Leveraging Cycles of Downturn in Manufacturing
Business interruptions and swings in business cycles are a fact of life. They’ve happened before and they’ll happen again. The financially profitable business cycles are always welcome, while cycles of uncertainty and contraction are more painful. In light of my career in automation and history of experiencing several upticks and downturns in business, I again find myself asking if the correct response to downturns or general uncertainty is to pause, “batten down the hatches”, and hold on tight as the economic storm passes so we can later resume projects and plans? I don’t think so – quite the opposite. I would suggest to you that these difficult cycles present a perfect time to press forward so that when (not if) “business-as-usual” returns, you are in a better position and are better prepared for the “uptick” in business activity. Sufficed to say, wildly successful businesses take strategic advantage of any business cycle – whether expansion or contraction.
Be Ready to Consume the Pent-Up Demand
When businesses are shuttered or constrained, the global supply chain can become disrupted and the supply-and-demand pendulum can lean more toward the supply side. When businesses reopen, the pendulum can lean in the other direction. Is your infrastructure elastic enough to absorb these momentary fluctuations in your industry? Are your enterprise resource planning (ERP) systems robust enough to handle the dynamic pull of raw materials and the fluctuating push of orders?
Complete System and Process Implementations During Downturns
When everything is right with the world, our time is consumed with tasks that focus on productivity, profitability and quality. All other tasks or initiatives that risk disrupting production are deprioritized. Thankfully, a downturn in business allows us to pause, exhale, and take a more critical view of those deprioritized systems. Is there a new approval workflow that needs to be developed and implemented? Do you have a test system for your developers that mirrors the functionality of your production system but you lack a staging system between the test and production systems? Are your databases due for a reboot, purging, or compression? Did your fiscal year planning include IT projects that can be implemented while business is slow?
Look for the Lessons in Each Economic Cycle
Despite our best efforts, we must accept the fact that we are at the mercy of a cyclical manufacturing industry. We’re going to experience ups and downs – many of which are outside our control. They just happen in our globally connected world. We do well to accept this reality and consider what we can learn during any phase of the cycle. Decisions and actions today can position the company for a better tomorrow. Every company will learn different lessons at different times in different cycles. Some will realize they need to save more money to weather the business cycles. Some will identify weaknesses in IT infrastructures and remote connectivity. Still others will strive to improve planning and analytic systems to better anticipate any change in the business climate. Some may even take a more external and social view and realize they could do better to serve the communities they call “home”. Any business cycle – but especially a downturn – presents fresh soil waiting to be seeded by brutally honest retrospection which, in time, will produce a harvest of targeted improvements. Are there lessons you can take from a changing business cycle to improve the resiliency and responsiveness of your company?
While our optimism compels us to anticipate the uptick, we should embrace down cycles as a time to identify the impact of missed opportunities, address aging or insufficient systems, and consider that one degree of change that we can make today to alter our course tomorrow and our destination in the future. Had the H.M.S. Titanic altered its course just one degree out of port from Southampton, England on April 10, 1912 on its way to New York, it would have missed the iceberg that eventually sunk her four days later. Business cycles still provide opportunity to press forward. Lemons will be thrown at the us by unexpected events like COVID-19 or whatever the cause of the next business cycle downturn, but we can make lemonade! How is your business preparing today to exit from the current business cycle in a better and stronger position to endure the challenges and reap the rewards in the months and years ahead?