You’ve probably heard the curse, “May you live in interesting times.” Given the unpredictable tariff situation, times are a bit too interesting. That also reminds me of another saying about accepting the things we cannot change and finding courage to change the things we can. To focus on the things within the control of small- and medium-sized contract manufacturers and job shops, we connected with Cara Walton, a director at Wipfli. With more than 7,300 manufacturing, retail, and distribution clients and over 250 industry-focused professionals, Wipfli ranks among the top 25 advisory and accounting firms in the nation. I met Walton during AMT’s MTForecast Conference last year, where she presented an economic forecast coupled with some job shop industry trends. She ended her presentation with a section titled “Where to Focus?” With the need to focus on things we can control more important than ever, I followed up with Walton. She advises shop owners and managers to focus on three areas: sales and marketing, operational efficiency, and leadership. Sales & Marketing From a sales perspective, start by knowing your forecast using three key pillars. The first pillar is historical sales data, such as work done for a customer over time, in a specific industry or at a specific plant. What story does a manufacturer’s own historical sales data tell? The second pillar is your customer’s forecast in terms of what they’re telling you they need this year. How does the customer forecast compare to your historical sales data? Dive deep into existing customers. Focus on the quality of earnings. If the customer or part is low-margin, tumultuous times might call for renegotiating terms or determining if the business is still the right business for the manufacturer. Review the reasons for keeping certain customers and growing your share, as your easiest growth could come from them. The third is to review forecasts from outside benchmarking and market intelligence services. Here, consider services from AMT such as its Benchmarking Surveys and Reports, events such as the annual MTForecast Conference, and AMT’s quarterly economic updates (see Events schedule). Wipfli conducts a quarterly Manufacturing Pulse Study* as well an annual benchmarking study, which covers the economic outlook in major manufacturing segments, financial performance, and business KPIs. Wipfli also conducts market studies and market analyses to assist manufacturers in understanding forecasts by end market. With a forecast firmly in hand, you can start scenario planning. “Plan for what you don’t know by creating possible scenarios,” says Walton. “For example, if your sales are weighted heavily toward the automotive market, what happens if 30% of the battery electric vehicle-related revenue disappears from the market? What happens if your biggest customer decides to focus more on supplier transparency because of challenges in the supply chain? If they want to cut your share of the business from 75% to only 50% or 33% of their business, what would you do?” Reflecting on the disruptions of COVID-19, Walton is certain of one thing. “While I don’t know exactly what will happen, history tells us more major disruptions are sure to happen. Business owners must take this impending unknown seriously,” she says. Cost of Doing Business If demand and revenue have slowed down or you’re not attracting the right customers, it may be a good time to look inward and start asking questions about your operations such as: How are you planning your capacity? What is the utilization rate of your machines or overall efficiency of your facility? Are you creating a culture of continuous improvement in slow times? Are you maintaining improvement in busy times? Are you tracking key performance indicators (KPIs) and other metrics, such as operational efficiency, hit rate, turnover, or cost of goods sold? “You have to look at the input costs to your business both as a discrete dollar value and a percentage of revenue to better understand where your costs may be bubbling up, but you must also look at what you can control within the four walls of your facility to improve efficiency,” says Walton. Another caution is the tendency to eliminate investments when times are challenging. “For instance, machine monitoring doesn’t have to be that expensive, and you need to know your true utilization rate to improve,” says Walton. “Displays where you look at different metrics might be a couple of iPads in different areas, so you can see metrics on different sets of machines.” Software is another relatively low-cost way to invest. Also, examine employment. Don’t immediately put the brakes on investment when business is uncertain. First, focus on what your current resources are delivering and evaluate their workload allocation to determine if a strategic hire may be necessary. A cost-benefit analysis on hiring someone may reveal that it’s worth the outlay. Internal Leadership Whether it’s a tariff announcement or pandemic warning, it is critical for leadership to maintain a sense of calm throughout chaos and uncertainty. “It could be about tariffs, a defense department program, bankruptcies, or plant openings and closings,” says Walton. “What’s important is that you lead and manage your people and business. Show your team how you will focus on what you can control until you know the real implications of change and what, if anything, you could do to react to it. It’s easy to get caught up in the noise of a negative message or daunting narrative, but your job as a manufacturing leader is to make parts profitably, lead with a sense of knowledge and purpose, and set a tone of calm in your business,” says Walton. Setting a tone of calm when things are tumultuous comes from training and experience. For manufacturing leadership training, Walton recommends Thayer Leadership. For written resources, consider Tradition Meets Transformation; the book provides manufacturing case studies about managing challenging situations as well as information about training second- and third-generation leaders. For the latest economic forecast tailored to manufacturing technology, plan to attend AMT’s 2025 MTForecast Conference, Oct. 15-17, 2025, in Schaumburg, Ill. For the latest Harbor IQ Manufacturing Pulse Study or for manufacturing business consulting, contact Cara Walton at Cara.Walton@wipfli.com. She is based in Detroit and consults with domestic and international clients, particularly in Canada. *In May 2024, Wipfli acquired certain assets of Harbour Results, Inc. and added its benchmarking, strategic development, operations improvement and assessment services to the firm’s existing capabilities.
In a volatile market, manufacturers can steady their course by strengthening customer outreach, streamlining operations, and leading with clarity through unpredictable conditions.
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