Crisis Management: When are layoffs the last resort?
Firing a qualified employee is the most expensive mistake you can make during a crisis. Before you give the competition people you've trained for 4 years, you must find money hidden in the mess on the shop floor and in the warehouse. Numbers don't lie: most plants waste 18.4% of their budget on errors that are not visible to the naked eye.
Start by counting, not by cutting jobs
In March 2024, I went to a plant near Tczew where the board planned to fire 14 people from the assembly line. The reason was simple: production costs rose by 22%, and the margin fell to 3.1%. Instead of signing termination notices, we took stopwatches and spreadsheets. For 3 days, we observed material flow. It turned out that employees spend an average of 84 minutes a day searching for tools and waiting for a forklift. It wasn't the people who were the problem, but the organization of their work.
Eliminating these downtimes allowed us to recover 412 man-hours on a monthly scale without hiring a single new person. Instead of firing 14 employees, we reorganized two stations and changed the schedule of inter-operational deliveries. The result was that productivity jumped by 19.3% in the first 22 days since implementing the changes. The cost of firing and later recruiting new people would have cost the company about 148,000 PLN. We found that money on the floor in two weeks.
Remember that every fired employee is lost knowledge about your machines and processes. When the economy recovers – and it always does – you will have to pay twice as much to find and train someone new. At Baltic Bridge Consulting, we always repeat: we look for losses on the floor, not in people's wallets. If your CNC machines stand for 14% of the shift time because the operator is waiting for a leader's decision, this is where you lose profit, not on that operator's salary.
Firing an employee is a surrender. Real profit is recovered by fixing processes, not by destroying the team.
The warehouse as a piggy bank with frozen cash
Another place where money escapes is the warehouse of finished goods and components. In June 2023, in one of the factories in Starogard Gdański, we discovered inventory worth 1.24M PLN that had lain untouched for 11 months. This was dead cash for which the company paid interest at the bank, while simultaneously planning to reduce employment by 8 people. This is an absurdity we encounter in every second audited plant.
We reduced inventory levels by 27.6% by introducing a simple ordering system based on actual consumption, rather than on the 'feelings' of the purchasing department. The freed-up cash allowed not only all jobs to be maintained but also investment in modernizing one of the packing lines, which shortened the production cycle by another 3.2 hours. Concrete instead of theory – that was enough to get back on track without drastic personnel moves.
Crisis management is primarily financial hygiene. If your inventory levels exceed the demand for 14 days of production, it means you are lending money to the bank for free. At Baltic Bridge Consulting, we analyze the rotation of every index. It often turns out that 14% of products generate 78.4% of storage costs. Eliminating these 'shelfwarmers' is the fastest way to improve the financial liquidity of your company during a crisis.
Dead stock on the shelf is your unpaid dividends and threatened employee salaries.
OEE Analysis – Why are your machines working at half-throttle?
Most production company owners believe their machines work at 80-89.6% efficiency. The truth is painful: the average in Poland is about 54.3%. The rest is micro-downtime, machine setting, failures, and production of rejects. During an audit in July 2024 at a metal industry client, we showed that a machine worth 2.1M PLN stood idle for 2 hours on every shift simply because the changeover process was unprepared.
Shortening changeover time from 114 minutes to 37 minutes gave the company an additional 77 minutes of pure production daily on each machine. On an annual scale, this is the equivalent of an additional plant working for 18 business days. Without buying new machines and without forcing people into overtime. We recover your time and profit, finding such bottlenecks that hide under the mantle of daily routine.
When a crisis comes, every minute of machine downtime costs twice as much. If you don't measure the OEE (Overall Equipment Effectiveness) index in real time, it's as if you were driving a car with a covered dashboard. You don't know if you're running out of fuel or if the engine is overheating. Our audits usually last from 4 to 9 business days and end with a list of specific moves that raise this index by at least 12% in the first quarter.
Communication in a Crisis: How to talk to the crew?
People on the floor are not stupid. They see fewer orders and hear rumors. If you remain silent, the best specialists will start looking for new jobs tomorrow. At Baltic Bridge Consulting, we advise full transparency. In August 2024, we helped a client conduct a meeting with an 87-person crew. Instead of general slogans, we showed them numbers: how much utility costs must drop and how much quality must rise for the company to maintain its current lineup.
The effect was surprising. The employees themselves reported 14 ideas for savings that the board had no clue about. One of the operators proposed changing the way sheet metal is cut, which reduced waste by 4.7%. On a monthly scale, this is a saving of around 9,300 PLN. When people feel they have an impact on saving their jobs, they become your best optimization advisors.
A crisis is a time for shortening the distance. A director who appears on the floor only once a quarter will not build trust. Marek Wiśniewski spends at least 4 hours a day directly at the machines during every project. Only there can real problems be seen. If you want to save the company from layoffs, you must go down to the people and show them a plan. A concrete plan with dates and goals, not corporate stories about mission and vision.
Transparency is the cheapest motivational tool you have in your arsenal.
Recovery plan in 14 days – where to start?
If your company is losing profit, you don't have time for multi-month analyses. You need a plan that works from Monday. The first 48 hours are the zero audit. We must know where the most money is leaking: in defects, in energy, or in internal logistics. In one of the plants in Gdynia, it turned out that leaks in the compressed air system cost the company 4,200 PLN a month. Repair took 3 hours and cost 150 PLN.
In the second week, we implement 'quick wins'. These are changes that do not require investment, only discipline. Changing the break schedule, introducing 5S at key stations, or setting up a score board at the production line. Numbers don't lie – visualising the goal makes teams raise productivity by 7.4% without any additional financial incentives. This is simple work psychology.
The last stage is stabilization. We teach your leaders how to maintain new standards. Without this, after two months everything will return to the old, costly order. Our team at Baltic Bridge Consulting does not leave you with a PDF report. We stay on the floor until the numbers in Excel start to match. The average return on investment (ROI) for optimization projects in 2024 is 4.2 months.
