DJ Products, Inc.

For just about all of us, 2008 has turned out to be a tough year. According to statistics posted on Manufacturing & Technology eJournal, three straight months of no growth have plummeted the manufacturing index to 26-year lows; and it hasn’t reached bottom yet. 

“It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the gulf hurricane, and the lagging impact from higher oil prices,” Norbert Ore, chair of the Institute for Supply Management’s Business Survey Committee, told eJournal.

Adding insult to injury, contractions in the global economy have caused export orders to decrease after 70 consecutive months of growth. Manufacturers who were running at 78.6% capacity last April were operating at just 75.2% capacity by December.

While tough times are expected to continue into the first half of 2009, all is not doom and gloom. The sun should start to peek out within a few months. Manufacturers are already realizing a small boon from decreased commodity prices and lower fuel prices. They are guardedly optimistic that the manufacturing climate will begin to ease during the second half of 2009, particularly as credit improves. As the dollar strengthens, export orders are expected to return to normal strength. Adding another item to the plus column, Ore noted, “While 2008 has been a challenging year overall, we are apparently seeing a rapid halt to the inflationary cycle of the past several years as it relates to manufacturing inputs.”

ISM predicts a 1.1% net decrease in manufacturing revenue for 2009 which would actually be an improvement over the 2.2% decrease reported in 2008. While little to no growth is expected in most manufacturing sectors over the next year, most will stop losing ground. ISM actually expects small gains in some areas, including petroleum and coal products, electrical equipment, appliances and components, printing and related activities, food and beverage products, tobacco products, apparel and leather products and chemicals.

Manufacturers and other businesses are expected to hold their ground by decreasing capital expenditures, reducing inventories and downsizing workforces to decrease labor and benefit costs.

Next time: What it will take to succeed in 2009.

Manufacturers are shutting factories and slashing jobs in an effort to stop the hemorrhaging from the global economic recession. A recession “always hits manufacturing first and hardest,” said Hank Cox, spokesman for the 10,000 member National Association of Manufacturers. “We’re going into a valley” that looks like it’s going to be “long and deep.”

Economic experts compare this recession to the 2000-2003 slowdown during which manufacturing lost 3 million jobs and never really got them back. Greater initial job loss is expected this time around, but there is hope that as the economy improves a greater number of jobs will be reinstated and that the net job loss will be less than in 2003. Until things turn around, though, everyone will have to work a little harder to pick up the slack.

Increasing the efficiency of your workforce can help business owners trim operating costs. Implementing personnel programs to decrease absenteeism has shown good results but doesn’t address the root cause of the problem. Poor working conditions that place unnatural strain on workers’ bodies take both a physical and mental toll on your workforce. Implementing an ergonomic program in your workplace can not only boost employee morale but eliminate costly musculoskeletal injuries and their associated costs.

Ergonomically-designed powered carts and movers relieve workers of the physical strain and discomfort caused by manual performance of pushing, pulling and lifting tasks. Making an investment in your employees’ health and safety improves morale. And where morale is high, worker efficiency has been proven to increase. But these are the indirect benefits of implementing an ergonomics program in your workplace. Direct benefits include an immediate and permanent decrease in expensive musculoskeletal injuries — particularly back injuries — and the high medical, insurance, disability and workers’ compensation costs they entail.

Workplace injury and illness cost U.S. businesses $171 billion a year. Approximately 13.2 million workers every year are injured in the workplace, resulting in $60 billion in workers’ compensation claims annually. According to OSHA estimates, back injuries account for 1 in 5 disabling injuries. Back injuries alone cost American businesses more than $12 million in lost workdays and $1 billion in compensation costs each year. The lost workday cost of a single back injury is estimated at $26,000.

Implementing an ergonomic program in your workplace can dramatically and immediately impact worker efficiency and your bottom line. Most businesses recoup their investment in ergonomic equipment within the first year. For more information on how ergonomic carts and movers can improve efficiency in your workplace, contact the knowledgeable experts at DJ Products today.

The nation’s 300 largest employers reported in a 2007 survey by research firm CCH Inc. that absenteeism costs their businesses more than a quarter million dollars annually in direct payroll costs. Add in lost revenue from lower productivity and unscheduled absences can have a significant negative impact on a business’ bottom line. In these recessionary times, absenteeism can make already slim profits disappear.

Only a third of all work absences are due to illness, said Susan Frear, director of education for the Dallas office of the Society for Human Resource Management. “The rest of the absences are related to having to be someplace else or they just don’t feel like coming in. So a lot has to do with the culture of the place.”

Changes in management style or corporate procedures can make a significant difference in absenteeism rates. “Take a hard look at the climate,” suggests Barb Ashbaugh, owner of Ashbaugh’s Trade Secret, a performance management company. Authoritarian managers “who make employees feel it’s their way or the highway” cause higher levels of absenteeism, Ashbaugh noted. Companies that count “occurrences” instead of individual days absent encourage employees to sneak in a couple of extra days off, warned Nancy Glube, an Atlanta human resources executive.

Retail giant J.C. Penney Co. is trying a new approach that shows promise for both large and small businesses. With 1,500 workers calling in “sick” and another 1,200 out on disability each day, Penney executives were concerned about the impact of growing absenteeism rates on the company’s profit margin. This fall they began project PowerLine. When an employee is absent for 3 days, the PowerLine team swings into action. They communicate with the employee to determine the nature of the absence and whether the employee qualifies for health insurance, workers’ compensation or short-term disability benefits. The team notifies store and department managers and insurance carriers and sends the employee the appropriate forms to complete. Daily absenteeism rates have dropped dramatically.

What has made the PowerLine program so successful in such a short time is the constant follow-up that continues until the employee returns to work. “I’ve found that when someone goes out on disability, that person undergoes a significant event in their life,” said Penney’s benefit manager Jim Cuva, “and if no one checks on them to see how they’re doing, they could stay out longer than necessary.” The PowerLine program is Penney’s way of “letting them know we care.”

Employees who know they’re valued work harder, are more productive and are absent less frequently. Making the effort to create a positive work environment can positively impact your bottom line. On Monday, we’ll talk about how implementing ergonomic practices in your workplace can improve worker morale, decrease worker injury and boost your bottom line.