How Manufacturing Fends Off Credit Squeeze

Don’t be the CFO who says, “I should have zigged when I zagged."

Manufacturers can’t afford to wait any longer. For two years, CFOs and controllers have managed supply-chain disruptions, labor shortages, and surging prices. Typically, these developments could require most manufacturers to raise prices to survive.

In Q4 of 2022, there potentially is a looming recession. The generally accepted definition of a recession of two consecutive quarters with a declining gross national product actually happened this summer. Yet, the National Bureau of Economic Research, which is the official scorekeeper, has not yet made the proclamation.

Normally, a recession means no consumer price hikes and less access to capital. Unfortunately, you can’t spell capitalism or keep a factory running without capital. So, carpe diem.

If manufacturers are feeling the pain today, the next six months are going to leave a mark. To mitigate the pending credit squeeze, here are five things manufacturers need to do today.

  1. Plan Ahead Before It’s Too Late
  2. Access Working Capital Before You Need It
  3. Stretch Price Elasticity
  4. Closely Track Costs, Margins
  5. Turn Data Into Dollars

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