Five great things an EMS program manager can do in a recession.

I’ve said repeatedly that program management is the most difficult job in electronics manufacturing services. Reason: Program managers are on the front lines of the fray and often have responsibility for both customer satisfaction and account profitability. When times are good, they must find resources to support customer upside demand. When times are bad, they often are blamed when accounts miss forecasts, slow pay, end up with obsolete inventory liability or disengage. In some cases, program managers legitimately carry a share of the blame for a poorly performing account. This month, we look at ways to make the best of a challenging business environment. If you are doing all these things, congratulations. If not, it is a great time to start.

1. Dust off the contracts. Ideally, the contract is a living document used to govern commitments from the customer and EMS provider. The best contracts provide strong frameworks for payment terms, inventory liability and reconciliation, termination liability, workmanship standards, product acceptance terms and dispute resolution. In reality, sometimes this useful tool sits in a drawer and is only pulled out at project termination. Customers take advantage of this in economic downturns by stretching their payables, pushing out inventory reconciliations, rejecting a higher quantity of goods and attempting to terminate on their preferred terms.
When a contract gathers dust, it will be harder to enforce because the customer has grown used to doing business on its own terms. However, enforced or not, a contract provides at least a basic framework to begin negotiations on changes in terms that are more mutually agreeable than those a customer is choosing to dictate on its own. PMs who choose to negotiate changes in terms, versus accepting customer behavior changes as inevitable, generally get better terms. The reality is customers who push the envelope dictating new terms find a certain percentage of their suppliers don’t push back. They then negotiate with those who do. Don’t be part of the crowd that assumes negotiation is not possible.

If you’ve never gotten a contract signed, these are times that illustrate why it really is worth the time and effort to negotiate contracts. Your current customers may be past the point where a contract is obtainable, but don’t continue the mistake with new customers.

2. Get everything in writing and organize it well. Most PMs understand the value of documenting key decisions in writing. In a business downturn, this discipline is more important than ever. While some customer representatives are ethical in both good times and bad, others can develop a survivor mentality that helps them justify bad behavior as acceptable if it helps achieve their employer’s goals. In short, the Golden Rule becomes, “If you are stupid enough to allow your company to be taken advantage of, it is your fault, not mine.” This behavior can be exacerbated when customer team members or their management change, because new team members may not feel bound by predecessors’ commitments. In the end, your documentation of events may be your company’s only defense in recovering monies the customer legitimately owes. Keep good notes on discussions in meetings and phone calls, and distribute a copy of key points, agreements and action items to all participants after the meeting or call. Organize this documentation by customer and work with IT to ensure it is appropriately backed up. Getting things in writing is meaningless if the notes can’t be found when needed as a reference. Remember the adage, “There are two kinds of people in the world: those who lose data and those who will lose data.” Be part of the group who has a backup and knows how to retrieve it.

3. Develop a roadmap for each account. Accounts seldom go bad all at once. Instead, they develop liabilities and bad behavior over time. When viewed over time, it can be difficult to recognize a vulnerable or failing account until it is too late to course correct. Account business plans help address that issue by providing benchmarks of account status. A good account plan lists relationships in the account, known competitors and their account share, short- and long-term goals for the account, performance metrics and trends, potential new opportunities and potential risks.

The value of having this information in writing and reviewing it quarterly is that it is very obvious when account dynamics start to change. For example, if the customer’s key team for the account is changing, it is a signal to start building relationships with new team members. If account revenue is slipping, it is a signal to determine the root cause. Back in my corporate EMS days, I once found business was moving to a dual-sourced competitor that my company was outperforming in quality, simply because the competitor was charging penalties if revenue dropped below forecast and my company was not. When we began charging as well, the business moved back because we were the better-performing supplier. Watching risk trends over time may also drive proactive resolutions that solve issues before they grow or age beyond the point that they are easily resolved.

4. Hold quarterly review meetings. Besides meeting your customer’s project status update goals, quarterly review meetings are a tool for building relationships and assessing account viability face-to-face. They also provide a venue to discuss new capabilities, explore larger business opportunities and discuss sensitive account issues with a larger team than you may be talking to on a day-to-day basis. Regularly scheduled and well-planned meetings ensure key issues are being formally discussed in a timely manner. The meeting also can be a timeline trigger for reaching agreements on issues that require higher levels of management involvement.

5. Update your resumé and your network. This last point is particularly true if you haven’t been good at items 1 to 4, but in this economy even great PMs can find themselves looking for a job unexpectedly. EMS companies fail, consolidate or have large layoffs driven by business loss. When that happens, employees who can be hurt the most are those who were fully committed to the job and worked at a single employer for a long period of time, because they are often the least prepared to market themselves in a highly competitive job market. The biggest value of keeping an up-to-date résumé is that it makes it easy to track your most relevant accomplishments. Track record is ultimately what new employers will look for, and those who maintain current résumés usually have a good itemized list of results to share. It is also a good sanity-check on your performance. If you don’t feel you have good accomplishments to list, perhaps that is a wakeup call to volunteer for a challenging project or become more proactive managing existing projects. While no one is indispensible, those who pull more than their weight tend to have more job security than those who simply fulfill minimum requirements.

The value of having a large network is that it can both keep you abreast of broader industry trends and provide options should you be unexpectedly unemployed. Signing up to LinkedIn the day after you get a pink slip and then contacting people you didn’t feel were worth keeping in touch with for years isn’t the way to get the best referrals into new opportunities. In this type of environment, résumés sent to competitors may simply sit in a large pile in HR. Referrals to a hiring manager are often a key step in moving from HR to an actual interview process, and when two equal candidates are considered, the one with references known to someone at the hiring company may have the edge. A good network broadens the pool of potential references.
This is the time when PMs can distinguish themselves. Be the standard by which others measure their performance.

Susan Mucha is  president of Powell-Mucha Consulting Inc.; (smucha@powell-muchaconsulting.com.) Her book, Find It. Book It. Grow It. A Robust Process for Account Acquisition in Electronics Manufacturing Services, is available through barnesandnoble.com, amazon.com, IPC and SMTA.

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