Rising Rates and Sinking Optimism: 5 Ways To Turn Today’s Problems Into Opportunities
The current macroeconomic outlook is affecting our personal outlook, and manufacturing is no exception.
The National Federation of Independent Business (NFIB) Small Business Optimism Index fell for the sixth straight month in June. In the 48 years the NFIB has provided this metric, optimism is at an all-time low. In fact, expectations for better business conditions have deteriorated every month since January.
Unsurprisingly, record inflation remained the biggest challenge. But beyond rising rates, the report reflects several other issues battering the U.S. economy since the pandemic-related lockdowns began, including labor shortages and supply chain disruptions.
Is Recession the Only Answer for Inflation?
In June, 39 percent of owners said that supply chain disruptions had significantly impacted their business, while 30 percent reported a moderate impact and 23 percent reported a mild impact. Just 6 percent claimed that supply chain disruptions had no impact on their businesses.
A year ago, we told you how our sector was contributing to inflation. Since commodity markets react more rapidly to changes in the economy than prices for finished goods do, we suggested that surging commodity prices at that time could be an indicator of future inflation. Now, commodity prices are edging down, in part because of a decline in demand at the consumer level as fears of recession mount.
Is recession the answer to tame inflation, as some economists suggest? Regardless, relying on recession doesn’t seem like a great solution.
So what can you do?
5 Ways To Turn Today’s Problems Into Opportunities
1.) Take Action
Control what you can. For example, at Macrotech, supply chain management and finding creative solutions to supply chain challenges are what our team does every day. We mitigate disruptions in the supply line through shifting sourcing and production, dual sourcing of raw materials, and material stocking programs.
We are able to source materials from multiple continents, pivoting production from country to country. Doing this with our clients’ approval has kept their supply chains moving despite factory shutdowns, natural disasters, geopolitical unrest, transport blockages, and labor shortages.
2.) Look for the Right Partners
Are your suppliers going to help you not only survive 2022, but also thrive in the months and years ahead? The past two years have highlighted the importance of working with an experienced manufacturer.
Well-financed, stable organizations with a history of quality production, reliable raw material and component sources, and skilled labor retention are more critical now than ever.
3.) Get Creative
When something happens beyond our control, our default position is often to stay the course, ratcheting resources up or down as conditions change. It’s common to see problems as temporary issues that need to be solved to get back to business as usual.
But what if current events are an opportunity to reassess the status quo and innovate?
4.) Turn Obstacles Into Strategies
Make a list of obstacles to your goals (production, sales, product development, etc.) and flip the script.
For example, if you identify a lack of risk management by your suppliers as a major obstacle to meeting your production and sales target, your strategy may be to upgrade your supply chain.
5.) Stop “Doomscrolling”
Spending too much time poring over grim news on your devices won’t help you move forward. Don’t bury your head in the sand, but do take regular breaks. The only way to break through the angst that comes from being worn down by bad news is to step away from it.
Need More Ideas To Deal With Rising Rates and Other Problems Affecting Your Business?
At Macrotech, we work on these issues with our clients every day, providing solutions to help them navigate the twists and turns of the market. Our goal isn’t only to get our clients through tight spaces, but to help them thrive…even in challenging times.
Schedule a call with us to learn more about how we can help your organization attain continued success regardless of market conditions.