Select a different stage

THE SITUATION: Immediate actions are required to ensure liquidity is sufficient, supplier relationships are strengthened and customers remain closely connected with the business. KEY STRATEGIC ACTIONS:

Evaluate viability of current strategic plan and consider whether long-term adjustments need to be made to the business model Conduct scenario planning, using economic and customer data, to measure the impact of planned adjustments Develop internal and external communications strategy for all stakeholders, including for employees, lenders, suppliers and customers Take action to mitigate impacts to service levels and client losses. Prioritize service for highest value customers

Strategy & Business Model

STRATEGY & BUSINESS MODEL

Triage demand changes and supply needs Revisit workforce strategy based on updated revenue forecasts Adjust inventory planning based on updated demand forecasts Identify alternative suppliers and transportation modes as needed Rationalize investment in R&D

Operations

OPERATIONS

Prioritize meeting near-term payment deadlines Revise cashflow projections and financial forecast Evaluate customer strength, risk profiles and AR exposure Control variable costs and revenue/receivable risk Negotiate a debt service holiday or covenant relief

Liquidity & Cashflow

FINANCIALS

Conduct a business continuity risk assessment to identify operational, financial and market risks Pursue actions to mitigate most urgent threats to the business Adapt your enterprise risk management plan to reflect near-term market conditions

Risk Management

RISK

Preserve level of investment in compliance Take advantage of any opportunities for financial relief provided by the federal government

Regulation, Legislation & Compliance

REGULATION

Persevere / Stabilize the business

Select a different stage

THE SITUATION: Revenue and profitability are stable. Capital structure is solid and operations are maintained at the proper levels to meet near-term demand. Opportunities exist to gain competitive advantage. KEY STRATEGIC ACTIONS:

Rationalize SKUs based on demand forecasts and product performance in previous downturns Protect cost pools that are necessary sources for competitive advantage Introduce tiered customer service model and prioritize highest-value customers Analyze demand and market data to uncover near-term growth opportunities

Strategy & Business Model

STRATEGY & BUSINESS MODEL

Revisit network footprint and look for opportunities to adjust facilities to reduce costs without harming customer service Reevaluate supply chain strategy and consider steps such as adding alternative and/or backup supply sources to mitigate risk and potentially lower costs Evaluate operating model and look for quick-win Industry 4.0 opportunities to improve efficiencies and lower overhead labor costs Adjust capital investment strategy, including potentially moving to a more asset-light approach

Operations

OPERATIONS

Increase working capital efficiency Leverage tax strategies to improve operating cash flow Identify quick-win profit improvement opportunities

Liquidity & Cashflow

FINANCIALS

Monitor for risks and update risk management plans based on changing market conditions Revisit insurance coverage based on changing business priorities Increase investment in cybersecurity concurrently with any new Industry 4.0 initiatives

Risk Management

RISK

Look for opportunities to improve efficiency of compliance function Strategize for expanding compliance function ahead of a return to growth Reassess incentives strategy to uncover opportunities to claim credits or negotiate new incentives

Regulation, Legislation & Compliance

REGULATION

Maintain / Balance Risk and Innovation

Select a different stage

THE SITUATION: Order rates begin to increase. Manufacturing operations and supplier needs are right-sized based on increasing customer demand. Overarching business strategy is updated with a focus on preparing for a return to consistent growth. KEY STRATEGIC ACTIONS:

Spin off non-core business lines, products or services and continue to build strength in the balance sheet Reinvest in highest-performing products and services Take advantage of strategic investment opportunities at reduced valuations Increase investment in Industry 4.0 including in demand forecasting, advanced analytics and artificial intelligence to enhance decision-making

Strategy & Business Model

STRATEGY & BUSINESS MODEL

Reassess benefits packages to attract and retain top talent Reevaluate network strategy to increase agility and improve service levels Consider onshoring or nearshoring to improve resilience and increase proximity to customers and key markets

Operations

OPERATIONS

Improve ability to forecast financial performance with advanced modeling tools Reassess large capital investments based on changing market conditions and customer demands Redeploy or sell under-used assets

Liquidity & Cashflow

FINANCIALS

Reevaluate risk posture as business expands Improve the efficiency of risk modeling capabilities Adjust existing risk mitigation strategies as business priorities shift

Risk Management

RISK

Stay up to date with emerging trends and regulations and map out the operational impacts of any new legislation Streamline compliance processes and automate remediation where possible Shift compliance strategy from reactive to strategic

Regulation, Legislation & Compliance

REGULATION

Recover / Pivot to Growth and Seize Opportunity

Select a different stage

THE SITUATION: Business is meeting or exceeding market growth rates. Order rates continue to accelerate in tandem with increasing customer expectations. Investments and agility pay dividends, causing the gap to widen between high performers and laggards. KEY STRATEGIC ACTIONS:

Adjust long-term strategic roadmap based on changing market conditions and customer behaviors/needs Look for strategic M&A opportunities to acquire scale, accelerate onshoring initiatives or expand Industry 4.0 investments Increase investment in R&D Consider vertical integration opportunities for cost optimization, greater efficiencies, expanded capabilities, and to improve resilience and increase control over the supply chain Optimize customer acquisition and retention strategies, including investing in customer experience

Strategy & Business Model

STRATEGY & BUSINESS MODEL

Continually revisit supply chain and network strategy for opportunities to streamline operations and improve efficiencies Look for opportunities to increase inventory turns Strengthen teams and employee development programs to support growth and successfully integrate acquisitions

Operations

OPERATIONS

Free up cash to fund growth initiatives and expansion Reevaluate pricing models as demand levels shift for different products and services Leverage technology to develop a real-time view of total tax liability and enable tax modeling for different scenarios Consider offering discounts or financing to strategic customers and suppliers

Liquidity & Cashflow

FINANCIALS

Increase speed and sophistication of risk modeling with Industry 4.0 tools such as advanced analytics and AI Continuously update risk profiles with new data use risk profiles to inform decision-making Mitigate cyber threats with real-time threat intelligence and monitoring

Risk Management

RISK

Assess the regulatory implications of any planned operational shifts or expansions and scale compliance capabilities accordingly Capture any federal, state and local incentives associated with onshoring initiatives Claim all available R&D credits to fund investments in innovation

Regulation, Legislation & Compliance

REGULATION

Thrive / Business Fundamentals and Growth are Strong

Select a different stage

Click through each stage of the resilience journey to see the key strategic actions manufacturers should take to outperform their competitors.

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Resilience Through Recession: A Framework for Manufacturers

Manufacturers must act decisively to navigate challenges like demand volatility and supply chain disruption. To enable new growth while mitigating disruption, manufacturers need to invest in resilience – the capacity to withstand business shocks and pivot to new opportunities. Resilience isn’t just for companies in distress. All manufacturers should prioritize investments that boost resilience to adapt to changing market conditions, improve profitability and hone competitive advantage. By taking actions like introducing tiered customer service models, rethinking supply chain strategy and making new Industry 4.0 investments, manufacturers can set themselves up for sustained success.

A petrochemical manufacturer experiencing steady revenue growth aims to capture larger market share. It considers carving out part of its business and using that capital to acquire a struggling competitor at a favorable valuation to increase scale and expand its customer base.

Resilience in action:

A food manufacturer specializing in at-home meal kit delivery sees demand fall drastically as consumers cut back on spending and shift to buying groceries. In response, the company reduces inventory of higher-end products and prioritizes relationships with channel partners that can provide access to cheaper markets to compete with grocery store prices.

Resilience in action:

An apparel manufacturer that focuses on footwear sees demand fall for higher-end products but increase for more affordable designs. The overall impact to revenue is negligible. The company shifts production and marketing resources to support its more affordable product lines and pauses any release of any new, higher end products.

Resilience in action:

An automotive manufacturer focusing on the EV sector is experiencing accelerated growth. The company pours significant resources into R&D to improve existing products and develop new offerings to capture more market share. The manufacturer also invests heavily into Industry 4.0 tools to automate manual functions and partially offsets the investments in new product development and Industry 4.0 by claiming R&D tax credits.

Resilience in action: