Last year brought in difficult times for everyone. From individuals to small, mid size and large global companies’ echoed one sentiment – reduce costs to survive. We saw large scale layoff’s as knee jerk reactions. Not sure why companies saw their people costs as the first level opportunity to tackle and their only scope for survival. Buyers were beating down their suppliers to get the best price against target goals, 10% per annum over their scope of supply or haggling over the increasing the payment terms, not realizing that the suppliers were also going through the same issues on liquidity crunch. Net result, suppliers went bankrupt and along with them the entire industry started collapsing, e.g. automotive industry.
Things have started turning around now and we felt it was time to take the learning’s from these experiences and reactions to prepare a strategic response approach to the situation. Surely we need not wait for the next recession but get started on a systematic process of quick wins, tactical and strategic initiatives that can keep the organizations going strong at all times.
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http://www.infosysblogs.com/supply-chain/2009/12/part_one_strategic_cost_reduct_1.html#more
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December 27, 2009 at 7:01 pm
Yogesh Sumrao
Hi Pradeep,
Agree with you the “Madness” of strategic Cost reduction. This has hampered the industry as a whole.
But don’t you think, most of the people try to save their skin in corporate world. Top management does more interested in saving their skin, in adopting “Strategic Cost Reduction” and people below got to follow the mandate from top as they can not leave the job in recession.
Is their another way to tackle the issue??