December 2021 Manufacturing Roundtable Takeaways

December 2021 Manufacturing Virtual Roundtable KEY TAKEAWAYS

Michael Negron , Senior Policy Advisor for Small Business at the White House , joined the fourth installment of the CFO Roundtables Series presented by First American . His team sought to hear directly from manufacturers about the challenges they face and what the government might be able to provide in support of our critical industry .
BIG IDEAS
P Leaders speculated that supply chain challenges , including growing wait times for raw materials and dramatic price increases associated with imports , will contribute to more on-shoring and verticalization of production in 2022 .
P One idea suggested to administration attendees was to begin publishing information on price indexes for raw materials and standard contract terms . The goal of this transparency would be to help small and medium manufacturers combat potentially unfair practices without needing to add headcount or resources .
P Attendees brought up that a complicating element of automation projects is the high portion of soft costs , like installation and construction , involved . One attendee recommended seeking installation period financing to reduce the strain on cash flows in this scenario .
CHALLENGE
Access to capital , or lack thereof , was a theme that came up throughout the discussion . A combination of external forces like increasingly shorter supplier payment periods , longer customer repayment periods , and persisting supply chain delays has put pressure on many manufacturers ’ cash flow .
CHALLENGE
Several CFOs were interested in learning more about what their peers were planning to address the shortage of labor in the industry in the coming year . Throughout the discussion , attendees shared a variety of challenges that ultimately each tied back to this common problem .
SOLUTION
Passing along price increases to customers continues to alleviate costs for some attendees . In other cases , seeking alternative forms of financing , like leasing , can help to ensure that bank lines remain dedicated to Op Ex exclusively . In these arrangements , custom structures can help to match your payback periods to a project ’ s ROI .
SOLUTION
Automation was the most common approach , though solutions varied based on physical plant capacity as well as workforce readiness for executing these complex projects . Attendees agreed that the goal is not to reduce headcount , but rather , to re-train and re-skill the loyal workers they already have .