Reactive vs. Proactive Manufacturers: Who Survives?
What is the difference between reactive vs proactive manufacturers?
The difference between reactive vs. proactive manufacturers is a reactive manufacturer tends to be a manufacturer primarily focused internally on products and sales. External changes or impacts in their industry will cause them to react, making them a reactive manufacturer. These manufacturers usually don’t initiate changes until forced to and usually feel like they are always “fighting fires”.
A proactive manufacturer usually has a detailed strategic plan and goals, is focused on future growth, understands shifts in business and industry, stays on top of new technology and is better prepared to adjust to changes in industry. These manufacturers are usually leaders in their field and industry.
What behaviors or decisions do you typically see from manufacturers stuck in reactive mode?
Manufacturers stuck in a reactive mode are usually making decisions based upon the latest problem, emergency or fire that they are facing. With that type of decision making, resources are being utilized without coordination to a strategic plan, overall wellbeing of the firm or future goals. Those firms who find themselves in a reactive mode should be cautious. Staying in a reactive mode can negatively impact cash flows, retention of employees, corporate culture, and customer service. It can also increase stress and burnout.
In business recovery, we often see decreases in sales, operating profits, employee retention and ability to globally compete. Reactive mode is usually always present in manufacturers seeking assistance in recovery.
Why do some manufacturers resist change even when it’s clear their situation is declining?
Change is hard. Change requires learning, improving, growing, adapting, and maybe even doing something new. It means letting go of what we used to know or do in order to make way for change to develop and take place. Do you know what is harder than change? Resisting it.
Change is a daily part of business and industry. Business and industry are always in a constant state of change. Industry leaders are always learning, growing, adapting, improving and creating something new. Just by moving forward to the future we are changing, developing and evolving. We can either embrace change as a driving force in business or we can resist it.
To me, the choice is clear. Embrace change as the opportunity for future growth and success. You can’t have one without the other.
What are the risks for manufacturers being reactive vs proactive during a downturn?
Waiting too long to take action during a downturn is allowing the downturn to continue. It is a conscious choice to not implement solutions or problem solving strategies.
Can you share a story or example of a company that waited too long to ask for help?
Unfortunately, there are many examples of companies that have waited too long to ask for help. In business, failure to ask for help, failure to implement business recovery strategies and solutions, and failure to secure the financial well-being of your company will lead to its closure, either by filing for bankruptcy, being acquired, selling off divisions or by shuttering the doors.
The ultimate goal of being in business is to make a profit to stay in business. If your company is facing declines, ask for help to secure the financial future of your company. Waiting should never be an option.
What are some telltale signs when manufacturers are reactive vs proactive?
Signs that a manufacturer is in a reactive mode include issues with retention of employees, stress and burnout, operating in “firefighting mode”, new problems or concerns arising weekly or daily, not feeling in control, increased customer complaints or quality issues. Financial signs that a manufacturer is in a reactive mode include cash flow problems, delays in paying accounts payables, delays in ordering materials, cuts in production hours or overtime hours increase to meet deadlines, loss in recurring sales, loss of repeat customers, declines in operating profits.
Companies that are in planning mode often are focused on growth and future projects. They are experiencing increases in sales, operating profits, projects and employment opportunities. Most importantly, they are in control, following a growth plan and implementing projects and technology, improving learning and training levels of employees and working to achieve their goals.
What advantages do proactive manufacturers have over their peers?
Proactive manufacturers usually stay on top of new technology and changes in the industry. That alone creates an advantage over their peers. Their competitors / peers are competing with outdated technology while the proactive manufacturer is implementing and training on new advancements and new technologies.
Another advantage a proactive manufacturer has over their peers is that they are playing with a strategic plan focused on future growth and leadership in the industry while their “reactive peers” are playing “firefighter” and trying to “catch up”.
How do proactive companies handle challenges like import competition differently?
Proactive companies are implementing strategic plans that focus not only on internal goals and projects, they are also paying attention to industry and external forces that may impact their business in the future. They stay on top of new trends, technology, and advancements. In doing so, they position themselves to be able to respond to and / or globally compete with imports before being negatively impacted.
Can you share a success story of a manufacturer who took proactive steps early and saw positive results?
The TAAF program, through MATAAC, helps every client-firm move through recovery to growth and success. Taking proactive steps in project implementation deliberately designed to address the specific needs of each client-firm.
Additionally, our client-firms enter the program in distress and facing the negative impacts of foreign competition. After completing the program, they become another TAAF program success story!
How does working with MATAAC help manufacturers adopt a more forward-thinking approach?
When a manufacturer works with MATAAC, as a participant in the TAAF program, they benefit from the creation of a business recovery plan. This recovery plan identifies specific projects that will not only help the company recover but it is designed for future growth, strategically implemented to increase sales, operating profits and employment, while also focusing on becoming globally competitive.
The best part is that the TAAF program is a cost-shared federally funded program that pays a portion of the projects identified for recovery and growth.
If a manufacturer feels “too busy putting out fires,” what advice would you give them?
Contact a business recovery specialist and work to identify the underlying problems that are negatively impacting your business.
When you are “too busy putting out fires,” your focus is off growing the business, making a profit and focusing on the future goals. For example, “firefighting” is a telltale sign that you need a business recovery plan.
What’s your favorite analogy or quote about proactive thinking in business?
There are two quotes from Benjamin Franklin that I feel speak directly to proactive thinking in business. They are:
- “A failure to plan is a plan to fail.” and,
- “Without continual growth and progress, such words as improvement, achievement and success have no meaning.”
If you had one message for every struggling manufacturer afraid to change, what would it be?
Change and challenges are opportunities to grow and become better. With change, there are only two choices:
- Be afraid of it, Resist it and Fight change which ultimately is a losing battle as change is a constant in life and business. Or,
- Embrace change as the opportunity it is to become better.
Why is NOW the right time for struggling manufacturers to make a change and how can MATAAC help?
Stop struggling and start recovering.
How MATAAC Serves Mid-Atlantic Manufacturers
Thank you for checking out our post on “Reactive vs. Proactive Manufacturers: Who Survives?
For over five decades, MATAAC (MidAtlantic Trade Adjustment Assistance Center) has been helping turnaround manufacturers by tackling trade challenges, regain competitiveness, and boost profitability. MATAAC provides solutions to manufacturers located in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and Washington D.C. MATAAC, chartered by the Economic Development Administration of the U.S. Department of Commerce with responsibility for the management of Trade Adjustment Assistance for Firms (TAAF) program. Finally, the TAAF program is a crucial resource that supports businesses in navigating global market shifts.