Companies Are Getting Creative to Cut Costs

A recent article in Supply Chain Brain underscored what so many companies have experienced lately:

In the midst of a brutal recession, companies think of little else than cutting costs. According to a new report by Archstone Consulting, however, they haven't been thinking enough. The firm's annual Cost Management Survey finds that 57 percent of respondents “have not yet identified sufficient savings opportunities to meet the cost-reduction targets necessitated by the dramatic economic decline in 2009." Last year's survey uncovered "a high rate of success” among organizations looking to cut costs, with an emphasis on achieving incremental savings, Archstone says. Now, with the economic crisis growing more dire, companies are deploying more complex initiatives, such as logistics redesign, shared services and asset rationalization.

Cost-cutting trends like these have been emerging across the country, if not the world, as oraganizations attempt to decrease operating costs. For example, universities are pooling their IT infrastructures, retailers are teaming up for promotions and advertising, and manufacturers are starting to collaborate in their distribution.

We detailed the many benefts of inter-company collaboration last year, specifically referring to the strategy as a way for businesses to shield themselves from market conditions. That advice is proving to be very prescient in light of our lingering economic doldrums.

You can take another look at that piece here: Surviving the Highs and Lows of Transportation