Safe Harbor

Safe Harbor - there are several definitions of what a safe harbor is. In the maritime industry, a safe harbor would be someplace ships seek refuge from storms or from danger such as pirates. SIDEBAR: Who would ever have thought that piracy on the seven seas would be an issue in the new millennium? In the business and financial world, safe harbor refers to a company or person being protected from liability issues resulting from making financial estimates and projections - as long as they are made in "good faith" and not from cooking the books.

In the metal casting and foundry industry, there is no safe harbor. You can not rest upon your laurels because in this new world economy, past performance is absolutely and positively no indication or gauge of future performance. What you did yesterday or 75 years ago for that matter has absolutely no bearing on what is going to happen today or tomorrow. Every time your feet hit the floor, it's a new day. I worked with a financial controller at a large, now defunct foundry, that always said "what have you done for me today" - meaning what you did yesterday is of little consequence. He is and was absolutely right. A resume only shows what endeavors you have succeeded in the past and is certainly go gauge of future performance - just an indication of potential. When I entered the foundry industry almost fifteen years ago, I knew manufacturing - but metalcasting is an entirely different animal full of it's on undulations, terminology, and methodology. Thus, I was a ship upon the ocean with no safe harbor to seek shelter within.

Today, I kept a keen eye on a foundry liquidation online auction - the foundry I formerly hung my hard hat at and strapped my metatarsals on at - Texas Foundries in Lufkin Texas. TF had been around for 75 years. Today marked the brutal close and slamming of the history book upon that chapter of metal casting. The auction was literally a fire sale - everything must go - down to the bare walls regardless of price. Holding furnaces, DISA's, melters, power stations, transformers and everything else went for pennies on the dollar. Not long ago, these were prized industrial tools that took millions of dollars to procure and install with capital requests. Capital is a very limited economic resource as we all know. Why did this happen - doesn't being in business for 75 years guarantee that you will be around for the next 75 years? Obviously not - there is no safe harbor. There are a multitude of reasons why TF is no longer around and I am not about to go into those as there is no one answer or conclusion that can be drawn. The autopsy hasn't been performed yet.

Right now, the world wide metal casting industry is weathering a huge storm in the form of a recession and there is no safe harbor. I recall earlier bad times at TF when we would look into the parking lot and wonder why employee xyz was at work because of reduced hours and work weeks. I've been there and weathered storms. However, there are certain things that metal casters can do and should be doing to weather the rough seas. Belt tightening and holding on to the cash are good starts, because cash is king and cash flow CF0 are everything. BUT, these are extraordinary measures that do not provide a safe harbor - when you are holding on for dear life and you are up to your neck in alligators while trying to drain the swamp - you have to let go and toss some dirt if you are ever going to drain the swamp. Proactive - being proactive is called for during the height of the storm. Sometimes during a financial storm you have to spend money.

Being proactive for a metalcaster during a storm means beating the bushes for new customers and continually expanding and transforming your industry segment into new markets and opportunities. There are metalcasters out there right now that are doing extraordinary well during this recession. The reason these metalcasters are still making a profit is that they did not seek a non-existent safe harbor, but had the tools and mindset in place to take advantage of the recession. The wrong time to implement lean manufacturing is during lean times. The horse is already out of the barn and halfway to town. Today's business environment demands rapid responsiveness to fluctuating market conditions.

One of the tools metalcasters need to examine is their ERP/MRP system. Does utilizing Synchro32 as your computer software platform guarantee you a safe harbor - absolutely NOT! A tool such as Synchro32 is only as good as the person using it. However, if your facility is still scratching estimates on the back of a piece of paper and doing scheduling by verbal commands, then there is something amiss and there is a huge opportunity for improvement with no major capital expenditures! A tool such as Synchro32 can enable your facility to monitor your operations, optimize your performance, and to rapidly respond to the market conditions. The maxim should be - the more quotes and estimates that you can accurately respond to - then you should be receiving a portion of these back in the form of business for your facility.

Synchro32 understands metalcasting - period

What have you done for your facility today?