Cost cutting

Everybody loves to hate cost cutting!

Whether you like it or not, cost cutting would become necessary when things don’t go that well. When you cut a cake and blow out those candles, the good indication is that you are growing. And when you start cutting costs and become hesitant to blow your money away, then again you are growing, but growing older.

Do not be under the impression that cost cutting is meant only for poor. It is there across the board. The degree at which and the areas where cost cutting happens just varies, that’s the only difference. Recent survey indicates that people in the US are going to spend less on tourism and travel. They would spend more on groceries this summer. There is no need of any such study in India, I suppose. To know whether the people have been cutting less and less of Apples and Onions irrespective of the weather, whether it is summer or winter!

Yes, only rich people travel by air. But does that mean all these airlines are becoming rich? No. Airlines are trying hard to bring the cost down to cope up with the ever increasing aviation fuel prices. I found in an article something interesting. Sometime back, American Airlines decided to reduce one olive from every salad served on board. It not only saved the cost of that olive but that many grams less load on the aircraft had contributed significantly in the reduction of fuel consumption ! Such innovative ideas do not exist now, as where are those free salads on board!! As per the article, the day is not far when airlines would start charging extra for using the toilets on board. So, if you get rich suddenly and if at all you decide to take a flight, whether they charge extra or not, please use the rest room at the airport before boarding the flight. It might reduce quarter litre of urine from your body which would mean less load on the aircraft and eventually result in reducing the consumption of fuel by a few millilitres.

It may be true that children add cost to the family. Not anymore.  Not in some places. People use child labour to cut costs at will. Samsung has recently suspended business with a service provider in China, based on the allegations that the service provider has used child labour. In India I am not sure what all will stop, if somebody is serious, the number of children might come down !

There is a joke about training somebody on cost cutting measures. Father decides to teach his son as how to reduce wastage. He employs an expert who had done masters in cost reduction from a Harvard like school. As the lecture starts, the master switches off the light as it is just a verbal lecture and no need of any light. Lecture goes on and when the master completes his task, he is about to switch on the light, the disciple screams “Just hold on master,  let me wear my clothes.  I had just removed them as there was no need of wearing them in the dark”! So you may hire somebody, who is theoretically sound in cutting costs. But if he indiscriminately starts reducing budgets on marketing and innovation, the chances are high that people in the company may undress him, may not undress themselves per se. It’s worth noting here what Peter Drucker has said  -"Business has only two functions -- marketing and innovation. All the rest are costs”.

Don’t be Penny wise and Pound foolish, people say. Good point. However if you start seeing a Pound as small as a Penny, then you don’t need to be wise at all I suppose. Just foolishly spend that “Penny-like" Pound and work towards earning a bigger Pound!!