Page 63 - Summer 2024 EDM Today

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More recently, during the Great Recession of 2007 to 2009, studies showed that companies with the most difficulties
had adopted a survival mode mentality. They made deep cuts, laid off workers, made no capital investments, and
curtailed sales and marketing expenses.
Considering the numerous studies conducted on how various companies cope with recessions, some best practices
have emerged that can be useful in developing your own strategic plan to manage the next downturn. Obviously,
each company is different in terms of its debt and available cash. However, the following suggestions offer some
general guidelines.

Stay Informed
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Many of us are members of one or more industry associations, such as the American Mold Builders Association,
Precision Metalforming Association, Canadian Association of Mold Makers, Aviation Suppliers Association, and many
others. Membership can provide valuable economic forecasting information and insight, which can help you project
your future workload.

Managing Expenses
Look carefully at your expenses and see what savings could be found in various ways. Perhaps your team members
who travel might consider a discount carrier instead of first class on a major airline. Possibly staying at a Hampton

Inn might be a better choice than one of the more expensive properties. There may be significant savings to be had
just in travel expenses. Consider an audit of your suppliers. Are you getting pricing that is appropriate for your volume?
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terms of the major OEMs is almost impossible, EDM Today Magazine
Oftentimes suppliers will provide discounts when requested. Are your purchasing people asking for a discount com-
mensurate with your status?
Managing Accounts Receivable
It is rare these days when invoices are paid in net
30 days. For those in the automotive or aero-
space industry, you must often think your cus-
tomers consider you a bank. While changing the

you can stay proactive and send timely invoices Archives on the Web
and statements. Consider also that, at some
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point, it may be necessary to suspend shipments
until past-due balances are brought current.
and feature articles are available
However, before it gets to the point of stopping
to browse online
service, call your point of contact and ask them to
intercede on your behalf. Sometimes, a call to the
right person can salvage the relationship.

Managing Accounts Payable
Based on the downturn’s severity, you may be
forced to delay payments to your suppliers. Your
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supplier’s A/R department will no doubt be email-
ing and calling asking for payment status. The
worst thing that you can do is ignore your suppli-
ers. All you will accomplish by ignoring suppliers’

calls is to throw up red flags and risk suspending
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your account. The much better approach is to pro-
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actively reach out to your suppliers and tell them
there will be a delay in payment. Or potentially
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work out a plan to pay a reduced amount each
month until you get through your cash crunch.
Once things return to normal, you will emerge then choose Magazine Issue Archives
with a greatly strengthened relationship. (Continued on next page)
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EDM Today, Summer 2024 Issue