The effects of the downturn on the manufacturing industry
There is no longer any doubt that the manufacturing industry will face a longer-term downturn with significant uncertainties and risks in the business environment. This applies to big multi-nationals as much as to mid-sized and smaller enterprises.
While most companies will still post good financial results for 2008, the following year promises to be much more challenging. Challenges are ups and downs in commodity and energy prices, unpredictable exchange rate fluctuations, increase in the cost of capital in tightening credit markets, drop in customer and consumer demand, risks that suppliers of key materials & equipment and service providers go bankrupt, reduction in capital investments and future increases in tax rates due to the bailout of the distressed banking system. A drop in customer demand leads to less production, which leads to an over-capacity of resources, and puts pressure on the existing cost structure.
Companies are now focusing on reducing costs, maintaining margins and volumes as much as possible with tight control of cash and cash flow. This means reduction of operating working capital (inventories, receivables and payables), capital investments and external spend. However, while cash is king, you should avoid losing track of customer intimacy and your core strategy.
Deloitte is the ideal partner to help you navigate the downturn. Our industry expertise will be bundled to support you with an integrated approach to gain quick insight and to help you develop and execute a focused plan. Our integrated offering focuses on optimising your business portfolio, controlling costs, mitigating risks, optimising tax and improving cash flow and funding.
- We provide you with a complete analysis that assesses improvement opportunities within 2 to 4 weeks
- We are a one-stop trusted partner that has all the expertise you need: one team, many perspectives funneled to one vision, one complete overview
- We have the power to implement what we advise
If you would like to explore how Deloitte can help you navigate the downturn, please contact:
Mobile: +31 (0)6 20 25 20 88
Assistant: +31 20 582 53 13
Stefan de Kruijf
Mobile: +31 (0)6 12 01 14 59
Assistant: +31 20 454 70 20
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