Economic Recession

Steps for Wastage Reduction and Improving Productivity and Savings:

By Commercial Organizations: –

1. Reduce the expenditure on Advertisement and Publicity.
2. Reduce the cost of production, Increase the Productivity.
3. The gap between the sale price and cost of production should be reduced. Administrative and marketing overheads should be reduced.
4. The organization should concentrate only the product on which it is earning high margins.
5. Advertisement and marketing expenditure for consumer goods should be prohibited. For that quality, Quantity and price specification should be made uniform. This will result into good market only to efficient organizations.
6. Every Expenditure has to undergo some of the following checks:-
   a.  Is this expenditure necessary?
   b.  Is there any less expensive alternative?
   c.  Is there any scope for more productivity with same expenditure?
   d.  Is this expenditure is going to give more enduring benefit?
7. The organizations should try to improve the quality and reduce the price by reducing the cost of production instead of trying to improve the sales by advertisement, free, samples, and marketing expenditure.
8. Improve the productivity and reduce the wastage by comparing its performance with organizations of same industry at National and International levels.
9. Quality should be given top priority. Frequent quality checks should be conducted.
10. Gap between the Budgets and Actuals should be monitored at all micro levels and steps to be taken immediately.
11. The second quality articles should not be sold on the same brand name since it may result into tarnishing the image of the organization. Also it avoids the customers being cheated.
12. Improving the Accountability. No activity should be conducted without making somebody responsible and accountable.
13. Quality and low price, productivity only should increase the reputation, goodwill and profits of the organization.
14. Proper personnel placement should be made to engage right person for right job.
15. Cost Analysis should be done very frequently.
16. Efficient and good performance should be encouraged and recognized.
17. Reduction of wastage and improvement of the productivity should be treated and “Social Responsibility”.
18. Competition for Quality, Performance, Productivity but not for Brand image.
19. Management of the organization should be in the hands of the professionally qualified and trained person but not in the hands of the person depending on their investments.
20. Management should be separated from the investment. Investor may not have management capabilities.
21. Auditing should cover areas of reduction of expenditure, increase in productivity, more effective utilization of resources, areas of more profitability. Auditing should not be a “Post Mortem”.
22. Corporate Loss leads to following losses in addition to loss shareholders:-
    a.  Resources wasted.
    b.  Inefficiency of personnel – low productivity.
    c.  Loss to creditors, financial institutions.
    d.  Loss to customers, Distributors, dealers.
    e.  Image of the organization and Industry as a whole.
    f.  Investors image with regarding the organization.
    g.  Image Internationally.
    h.  Govt.Low Tax Collections.
    i.  Employees’ possibility of losing their jobs.
    j.  Net wealth will be eroded.
    k.  Investor will not come forward to invest again in any organization, industry.

    Industry Should Not Become “IN DUST”