HIGH FIVE

"Better training and effective people management enables huge cost savings"

Shekhar Bajaj, chairman, Bajaj Electricals on five ways to manage costs during a downturn

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Published a month ago on Jul 04, 2020 Read
Soumik Kar

Focus on the employee: Employees are the most important assets of an organisation. Better training and effective people management helps in retaining efficient people. This not only results in better productivity, but also enables huge cost savings for the company.

Purchase in bulk: During any downturn, most manufacturers grapple with overcapacity. So, by reducing the number of vendors, each one has more quantity to offer and you can get bulk discounts. Besides being more cost effective, it also become easier to manage the vendor list.

Reduce the number of SKUs (Stock Keeping Units): By reducing the number of items to offer, it is easier to manage SKUs and vendors available. The reduction in inventory will lead to lower costs.

Invest in specialisation: In the manufacturing value-chain, there are specialists to perform various activities to whom you can outsource your requirements. Implementing such measures helps reduce your head count and fixed costs. This not only ensures better quality of products but is also more cost efficient when compared to employing your own person for any given role.

Ensure sustainability: Embrace cost-cutting as not a one-time activity but one that will hold the company in good-stead all-through. In the long run, this approach will optimise competitiveness.

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