Page 64 - Canadian Industry Online

CANADIAN INDUSTRY ONLINE - OCTOBER 2015 in the value of our currency in about a year and a half.Having said that, there is a silver lining in here in that all this wild vola- tility in financial markets really doesn’t say much about the real strength of the economy.However, the danger is that these swings overwhelm what busi- nesses can do in the real economy; it may tighten credit lines, it may tighten availability of credit for businesses, it may mean consumers are less reluctant to spend, it may mean companies put their investments on hold again.How should companies ap- proach this new economic outlook?As for Canadian manufacturers and exporters, it is important to focus on the medium to long term, not the short term and to be prepared for ad- justments in customer demand. And again, if there is a reason why com- panies should be holding onto cash, this is it. Focusing on productivity enhancements and investing in new technology is still very important but no business can afford to get out ahead of its customers too much.This really compounds, for manu- facturers anyway, the continued weak- ness in those sectors that are focused on the commodity markets. For in- stance, we’ve seen a major postpone- ment in future oil projects. This is notas big of a concern for today as it will be in 2018 or 2020 when current proj- ects dry up and there’s nothing on the books. That’s where the supply sector feeding into oil sands and feeding into commodity markets, or commodity- based producers are really going to feel the pinch for probably four or five years before things begin to pick up again.This really underlines the impor- tance of maintaining global growth and the importance of our export sec- tor. The key takeaway is that if you don’t have customers buying it is go- ing to be really difficult to sell and to produce and to plan.How should Canadian compa- nies prepare for finding financing in a low Canadian dollar climate?There are two key steps com- panies have to take before they find financing. The first is to manage the risk involved in the investment. Com- panies should understand their cur- rent processes and ensure that if they are investing in a new piece of equip- ment, process, technology or informa- tion system, that it’s actually going to deliver the benefits they expect. This requires using a LEAN perspective to take stock of the processes already in place and those that need to be im- proved.The second step involves the company acknowledging that their64