Traditional business strategy leads us to believe the only way out in troubled times is by reducing the workforce. During hard times businesses need to see immediate results to avoid problems. While experts claim cost reduction, business sustainability, and process improvements reduce layoffs, all of these solutions are expensive and take too long to implement. Companies won’t notice the results because they will be filing bankruptcy before these techniques become effective.
Cost reduction attempts to increase profits by reducing costs elsewhere, primarily from quality control and production quality. Businesses find ways to get cheaper supplies of lesser quality, selling smaller products for more money, and eliminating important quality control steps in an effort to lower labor costs. Reducing expenses is a viable option, however; businesses are too concerned with regaining profits that they forget the importance of creating durable products. Reducing inventories, using cheaper parts, and limiting production creates headaches for consumers who have to wait for the products to arrive.
Companies can decrease costs associated with the hiring of new employees by keeping retention rates high. Current employees who are satisfied with their current position are less likely to leave midway during their careers. Studies indicate happy employees are more productive workers, have lower absenteeism rates, and add value to the organization. Employees who feel connected to their managers and bosses are less likely to leave and more likely to contribute positive suggestions to the business strategy, reducing operational expenses.
Businesses can significantly reduce labor expenses by engaging in business process improvements, which is a systematic approach to managing business operations. The mechanism ensures companies remain focused and concentrated on their business strategy. Processes are steps in the manufacturing or production environment, executed in a specific order known as the work flow. Companies streamline and automate processes by eliminating unprofitable tasks, merging activities, and increasing efficiency.
Optimizing processes reduces the amount of labor needed to complete the manufacturing process. Additionally, it enables businesses to monitor employee performance levels, provide clear job descriptions, and increase employee accountability. Businesses optimize processes by soliciting and listening to employee feedback, using business process management software to evaluate and implement the ideas.
Companies can ensure a sustainable future and profit from the “Green” movement by reducing their dependence on natural resources. Participating in recycling programs and using recycled office supplies saves the environment while increasing profitability. It takes 50 percent fewer resources to produce recycled office supplies, which are the same quality as new products. Companies leverage their sustainability efforts by receiving state and federal tax breaks by reducing their emissions.
The zero waste initiative is an offspring of the sustainability movement, which states that companies can increase profits by maximizing resource efficiency. In a zero waste scenario, companies reuse the waste they produce during the manufacturing process. Companies minimize their waste by monitoring their inventories, ensuring every product is used before its expiration date. Zero waste companies avoid ordering in bulk and reuse packaging materials whenever possible. Large corporations such as Xerox re-engineered their business strategy to include zero waste initiatives. However, it took several years for them to achieve returns on their investment.
You don’t have to be a Six Sigma Black Belt to understand that there is not an easy fix for our workforce. Corporations and Americans in general, utilize the band-aid approach, a cheap solution that masks the symptoms without doing anything to solve the underlying problems. All of these programs offer businesses a miracle “quick fix,” only for the problem to relapse after a few weeks. There needs to be a permanent solution that addresses business strategy issues from the bottom up by modifying business strategy.
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