Lean Can Insulate Manufacturers From Economic Shock – as Growth Slows in U.S. During 2008

Lean Can Insulate Manufacturers From Economic Shock – as Growth Slows in U.S. During 2008

Repeatedly, Lean demonstrates it works, as many companies that embrace Lean can gain 15% year after year, while the US GDP increases at a rate of 3-5% year after year. Lean is about changing principles and attacking waste in your value streams. It means totally changing the way you look at things, but once you learn how to see waste, you can eliminate it and become competitive.

Economic cycles will always mean there will be difficulties, and we will always be at the mercy of economic forces. An economic shock will send U.S. manufacturing into a mild recession in 2008, according to a new report from an industrial trade group. During 2008, only 10 of 24 industries expect to show growth, the report from Manufacturers Alliance/MAPI noted. However, those companies that are running Lean have an extra insurance policy. In a rough economy or recession, companies that are Lean will fare better then those companies who are not.

Manufacturing has been one of the brighter lights in the overall U.S. economy, especially as a weak dollar has fueled rapid increases in overseas sales. With a significantly worse outlook for new housing starts; negative effects of lower home values on consumer spending; high gasoline and fuel oil prices; slower job growth; and high natural gas, prices will all contribute to a halt in industrial growth in 2008.Manufacturing production will slow significantly from 4.7 percent in 2006 to an estimated 1.9 percent in 2007 and to no growth in 2008, according to Manufacturers Alliance.
Four industries had growth in 2007: aerospace products; electrical equipment; communications equipment; and private, non-residential construction. The forecast for the aerospace industry is a continued growth, so downstream industries like machine shops, fasteners and heat-treating should continue to do well. If you are a Connecticut company who has obtained $500,000 or more of defense or aerospace manufacturing contracts over the past two years, and are interested in implementing Lean Manufacturing, you may be eligible to receive up to 50% reimbursement of the costs for Lean consulting by a qualified service provider such as Leanovations though ADI.

There is a compelling case of how Lean initiatives can really pay off and insulate companies from economic troubles. Lean helps to bring products to market faster which allows companies to capture more of a market share and it results in better asset velocity, which drives cash cycle conversion, and we know that in all business cycles, "cash is king." If you are interested in learning how Leanovations can assist your company, please go to www.leanovations.com.