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Protection by preparation; manufacturers can't predict the future--especially these days--but they can keep their bases covered with proper planning.

Article Excerpt
As the status of the United States' economic future remains unclear, a trend is emerging in American business: Companies are reevaluating their financial strategies to not only become more efficient but to simply stay afloat in an increasingly competitive environment.

For manufacturers, this is no different. In Northeast Ohio, 17.7 percent of all nonfarm jobs are in the manufacturing sector, compared to 128 percent in the rest of the country, according to a 2002 survey by the Center for Regional Economic Issues at the Weatherhead School of Management at Case Western Reserve University. In other words, the area continues to be very reliant on manufacturers for jobs and products.

For this reason, it is important for local manufacturers to prepare for an economic future that could determine their company's and their region's chances of success

"The price tag of making mistakes is going up," says Richard Fleischman, professor of accountancy at John Carroll University. In a slow economy, manufacturers need to recognize that competition will increase, and they need to plan accordingly.

"It's clearly the case that manufacturers are going to have to have a greater concern with their risk management," he says.

KEEPING OVERHEAD UNDER CONTROL

One factor that manufacturers need to consider is overhead costs, which can be considerable for many businesses It is valuable for any company to study how it allocates its over head expenditures to see if they are efficient, Fleischman says.

The easiest cost saving ideas may not always be the best, such as when manufacturers look outside the country for cheap labor, he says. This can hurt the local economy by taking...