Is it really a recession? Or is it the dawn of a new economic age? Either way, what should we do about it? Glumly cut costs? Or gamely up our game? Read all about it in our monthly round-up of manufacturing-related news.
War On Wikipedia
Many believe 2023 will be defined by global recession. Yet many are still unsure of what recession actually means…
“Wikipedia editors cannot agree on the definition of ‘recession’. Last month the site barred new and unregistered users from editing its page on the subject, after a fierce dispute over the claim that two consecutive quarters of falling GDP indicates a recession. The page, which had previously been tweaked just 24 times in 2022, was edited 180 times in a week,” according to ‘What Is A Recession? The Definition Is Contested – And Political’.
But yes, something is definitely lurking. Even Elon Musk – the guy who had a spare 44 billion dollars burning a hole in his pocket – is saying it: “Economic picture ahead is dire.”
Millions Of Arms Juggling Billions Of Balls
“The economy today, propped up by stimulus and slowed by a pandemic, is weirder than it has been in decades. There are more jobs available than there are people to perform them, but thanks to inflation, nearly every facet of life outside the office has become increasingly unaffordable, making the point of work a little harder to articulate,” according to ‘The Pain The Fed Is Inflicting Around The World Could Hit America Next’.
Loop in geo-political tensions, full-out war and continued tangles in the post-COVID supply chain, the result is that now even the most state-of-the-art algorithms get confused.
Meanwhile, McKinsey just released a report suggesting we are “undergoing a cluster of earthquakes” not as a prelude to recession but to a whole new global economic era that will take decades to play out.
Power of Positive Partnering
Regardless, the writing is on the wall: Europe will likely enter a recession this winter. And their former partners have likely already entered the building: ‘UK Manufacturing Faces Deep Recession As Output Slumps’.
Many pundits see this leading role of the UK as being largely a self-inflicted wound thanks to Brexit. Perhaps it also holds a valuable lesson: that you need as many friends and partners as you can get when trying to survive trying times.
Is there other advice manufacturers should be taking right now?
Regroup
Traditionally, the recession mantra has been: cut costs, cut costs, cut costs. But nuanced times call for nuanced measures.
“Manufacturing concerns can embrace a host of measures to successfully navigate through the uncertainty unleashed by recession. To experience stability during the recovery phase, manufacturers must recalibrate strategies pertaining to global supply chain management and hiring needs for meeting increasing demand. It is imperative to perform due diligence and identify potential supplier issues for timely solutions,” according to ‘Recession Guide: Meaning, Factors, Global Effect on Manufacturing Sector’.
“Desperate times need desperate measures where complacency is not an option. To emerge successfully from a fiscal catastrophe, the manufacturing sector must focus on supply chain disruptions and labor shortages from a brand-new perspective. Supply chain restructuring, process automation and hiring could be the critical success factors crucial to the sector’s ability to negate adversity.”
‘Don’t Cut and Hope. Invest and Grow.’
“The truth is that recession doesn’t need to mean retreat. Smart decisions in tough times can be the foundation for years of success. But organizations must be willing to make intelligent market choices, invest in their digital core, and get closer to their customers. This isn’t a time to pull back and hope things turn out right; it’s a time to gain control of spending, invest smartly in your business, and fuel long-term growth,” according to ‘Recession Doesn’t Have to Mean Retreat’.
According to research, it’s the resilient companies that come out strongest. “Key to these leading organizations’ success is their ability to use real-time data for every aspect of the resilient business, from suppliers to customers. They gain new insights on risks. They have visibility into every dollar of spend, and have the tools and insights to maximize value at each stage of their operation. Instead of investing less, resilient companies see an opportunity to invest smarter.”
“Each recession has different catalysts, but every recession has one thing in common: it ends. And when the economy makes it to the other side, companies that used the time to become more agile and resilient will find themselves better positioned to accelerate than the competition is.”
Sound good? Let’s get to work.
Read ‘Manufacturing – The News: The Science And Art Of Calculating True Costs’.
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