The current global crisis is inevitably requires businesses to become more efficient, because the demand is now declining. What are the alternatives owned companies in cutting costs amid the global crisis?
Trimming costs should not be done arbitrarily, as has a direct impact on the profitability and competitiveness in the long term. Therefore, the cost cuts are made to be aligned with the strategy and should consider the profitability and competitiveness in the long term.
For example, cuts in R & D, marketing and capital expenditures may be in the short term to reduce the cost. However, its influence can negatively affect profitability in the long run. The following are alternatives other cost-cutting you can do:
In order to run the business more effectively and efficiently, then outsourcing becomes an option that more and more the norm. Outsourcing is generally done for the parts that are not a major operation, but the support of the business such as IT, HR, and others. Why outsource? This is because outsourcing allows companies to focus on what’s become their main operations, so that the business can be run more effectively and efficiently.
Evaluation purchasing cost of product or raw materials that you use now. To reduce cost, try to negotiate the price of the contract now. Especially if you are a buyer has the bargaining power of buyers is high, then you have the potential to gain a more competitive price. Discover also the option of other suppliers who can supply you products / raw materials are cheaper, with the same quality.
The crisis would result in your request declined, so, it’s time to evaluate your transportation costs. With different demand conditions, it may be true that there is a transport route can be optimized and minimize costs. Evaluation can use with a variety of transportation methods, ranging from the Northwest, Minimum Cost, Stepping Stone, until Modified Distribution and others in order to obtain the most cost efficient and effective.
One aspect to note is the service cost to the customer, which may vary from one customer to another customer. Therefore, you also need to handle the service cost to be more optimal.
For example, we supply the products to two retailers who have a lot of branches, namely A and B. Retail A book centrally, allowing all reservations for all branches. While different retail B, ie each branch separate book. In cases like this, of course reservations as retail A more optimal, because the centralized ordering, so it is more efficient and practical, for delivery only once, centralized billing as well.
One option that is often made by the company was downsized, laid off until the lowering of salaries and benefits. However, to be considered is how the competitiveness of companies will be if the economy has recovered? What if the company policies that encourage people important to get out and move on to a competitor? Thus, the company must make adjustments by first doing these considerations.
Finally, look for other outposts where costs can be reduced, ie posts that do not add significantly to the value added in the business. For example, cheaper travel for official travel, less luxurious facilities, snacks on when meetings, reduce unnecessary interior renovations, and so on.
So are some cost-cutting alternative to do business. Cut costs with consideration will allow a business running effectively and efficiently, and stay competitive in the global crisis.