UK Manufacturers use Interim Managers to Beat the Monkey

UK manufacturers are turning to interim management providers like Aster Interim to help them free up cash and improve liquidity during the current recession. Many manufacturing companies are reducing their headcount to cut costs, but a number of others are using interim managers to make their business processes 'leaner' and maximise margins on existing sales.

Global Market Pressure

The UK manufacturing sector has long been under pressure from global market forces and the recent figures published by the UK Government would seem to bear this out.

Gross Domestic Product (GDP) contracted by 1.9% in the first quarter of 2009. Output from the production industries fell by 5.3% compared with a fall of 4.5% in the previous quarter.

These statistics were driven by manufacturing output which fell by 5.5%, leading many manufacturing companies to ask their staff to accept shorter working hours, pay cuts and even redundancy. This is clear evidence that UK manufacturers are really suffering in one of the worst recessions, if not the worst on record.

Beating the Cash Monkey

Companies are currently looking for ways to beat the ‘cash monkey’. This is a metaphorical term for the lack of liquidity many companies are suffering from at present, as a result of reduced sales, bad debts, increasing inventories and rising costs.

All companies know that cash is king and the finances of the indigenous manufacturing sector cannot be helped at present with the further difficulty of getting loans and extensions to credit facilities. As a result, SMEs and multi-national OEMS alike need to find other ways to free up cash in their businesses to improve liquidity.

Using Interim Managers

There are two ways to make money from manufacturing: making more with the same resource or making the same with less resource.

Many companies have chosen exclusively the second option and cut their cloth accordingly by reducing their headcount, but a number of other manufacturing companies are choosing interim management providers to help them through the worst of the recession.

The need to increase efficiencies and reduce costs has led to a fillip for interim management providers like Aster Interim. In particular, those interim managers with experience in change management, business turnaround and using continuous improvement techniques such as lean and six sigma are finding their services very much in demand at present.

This recession has catapulted interim managers with these skills to the forefront of the recruitment sector. Companies are on a drive to make their business processes ‘leaner’ and maximise margins on existing sales. Every effort is being made to ensure any amount of inefficiency is identified and eliminated.

Lean Business Techniques

By working ‘smarter and not harder’ many organisations are hoping to last out the recession and come back leaner and fitter when the economic tide turns. Lean business techniques are being employed companywide from design through to distribution. Perhaps those organisations with the foresight to improve their business models now rather than doing more of the same will be the organisations able to steal the march on their competitors when the good times return. Interim management can be self-financing if the chosen manager succeeds in achieving the set objectives.

Interim Management Assignments

UK manufacturers are looking for interim managers who can complete assignments such as: factory re-layout to minimise waste, process mapping to reduce non valued added activities, leaning out supply chains to bring about improvements to lead-times and cash outlays and working to make more business processes more repeatable and capable.

Perhaps interim management maybe one solution to removing the cash monkey from the UK manufacturing sector.

Visit the Aster Interim website: www.aster-interim.co.uk

Contact Details

Paul Wilson
1 The Lane
Mursley
Milton Keynes
Buckinghamshire
United Kingdom
MK17 0RY

Tel: +44 (0)1296 720281

enquiries@aster-interim.co.uk

What is the best way to approach a new interim assignment?

Everyone has their own approach to a new role but here are a few tips how to ensure you get off to a flying start.

10 Useful Tips and Suggestions

Ensure you receive clear, concise, tangible objectives

Ensure you fully understand the scope of the role and your responsibilities

Take time out to chat with your peers and subordinates alike to get an understanding of the main issues and who the movers and shapers are within the organisation

Use the Management by Wandering Round principle espoused by US business guru Tom Peters - go and see for yourself ‘where the action is’, don’t just rely and what you have been told, make your own judgements

Ensure you work the hours appropriate to the task in hand. Interim Management is rarely a 9-5 occupation

Formalise some useful KPIs and decide how they will be measured, keep them simple

Generate a plan of the activities that need to be carried out, formalise this and make it visible to the stakeholders

Ensure you write a one page weekly report summarising your activities, performance against KPIs and future tasks and actions. Your client needs to know they are getting value for money and you are making a difference

Ensure you get regular and critical feedback from the Stakeholders on their ‘perceptions’ of how the assignment is going

Finally, do not stretch out the assignment beyond the scope of the project boundaries unless requested to do so by the stakeholders

Markets showing signs of Recovery

As summer approaches I am seeing genuine optimism amongst our interim managers and clients alike that certain market sectors are starting on the long road to recovery.

However, most of our interim management placements at present are still in the areas of business improvement, change management and business turnaround which would indicate organisations are still prepared to spend money when a leaner, fitter business is the result.

Where interim placements were common a short time ago to cover for scenarios such as maternity, staff sabbaticals and executive terminations, in our experience, organisations are preferring to re-organise internally instead by battening down the hatches in order to save funds in these uncertain times.

We have provided short lists of candidates to a number of clients in recent weeks only for the client to re-evaluate their plans at the eleventh hour and withdraw the assignment favouring instead a ‘make do and mend’ strategy.

I would suggest that this trend may continue for at least the next 12 months before more standard disciplines and scenarios re-emerge once again within the interim portfolio.

In truth I believe this may well have a positive Darwinian ‘natural selection’ type effect on the interim pool of talent because in my opinion it was starting to get saturated with interim managers from too few disciplines causing supply to outstrip demand ultimately driving down the day rates.

This recession may also lead to other changes in the provision of recruitment solutions for many private and public organisations.

Human Resource Directors are starting to see that swathes of employment laws and costs relating to permanent staff do not apply to interim managers meaning that the use of interim managers has suddenly become a lot more appealing.

I believe the balance of 2009 will test us all to the limit but at the end of it we will have a leaner and more structured recruitment industry where both permanent and interim management solutions are available in equal measure.