As the purchasing manager for Greenwood, Inc., a lot of my job involves important activities such as helping ensure that we have the right product at the right time on the shelf to serve our customers. However, an even more essential responsibility of mine is to find ways to reduce and control costs without sacrificing quality. This is not only essential for our long-term survival as a company, but also for the survival of our dealers, our partners. In the long run, if we save money you save money.
For most companies, cutting costs in a down economy means across-the-board slashing that "spreads the pain" of reductions across many areas. Even though that may sound like the best approach for getting fast results, it is a mistake - one that could leave your company not just smaller, but weaker.
Instead, companies that need to reduce costs should treat the challenge as an opportunity to recognize and strengthen their key capabilities, while shedding those activities that do not truly reflect the business's strengths, core competencies, or long-term goals. Ultimately, focus on what you do best and toss out the rest. You will never be all things to all people.
This more strategic method will make your company more resilient as tough times continue and more agile as recovery begins.