American consumers, facing uncertain job security, lower home prices and depressed retirement accounts, have made a fundamental shift in shopping behavior. Almost overnight, a profound, collective sense of regret over years of overconsumption and waste has set in -- and with it a new attitude toward frugality.
Manufacturers are scrambling to make sense of these new consumer attitudes and behaviors. Will spending patterns eventually return to their pre-recession levels? Or will consumers still be thrifty when the recession subsides?
No one knows for sure. But consumers will always need certain things, so the issue may not be whether some things will be purchased, but whether they'll be purchased at the price and in the quantity necessary to generate profit and growth for producers.
In this uncertain environment, companies that react quickly and become the lowest-cost producers will be in a strong position to redraw the market-share map. They'll be poised to take volume and customers from those companies that can't react. This has been the reality of every recession, and producers that are not prepared for the ensuing battle will inevitably drop down the leader board before the dust settles.
To develop this level of agility, progressive manufacturers have been taking a "back to basics" approach in their plant operations, very much in line with the consumers they're seeking. Rather than going back to old assumptions, these companies are looking for ways to get more value from current investments.
Primarily, this involves better utilizing existing resources to produce the same volume with fewer personnel, less material or in less time. For instance, producing the same case count in less time by speeding up changeovers or, producing the same case count with less material by eliminating overfilling.
Common back-to-basics trends these companies are following include:
#1: Leveraging Human Capital. Research shows that the core efficiency problems in today's plants are not related to plants and equipment, but rather to people. Fortunately, the hourly workforce is an inexpensive improvement area because the hidden resource already exists. As a result, workflow and management problems must be tackled with a completely different approach from the engineering-led focus that most companies use today.
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