Entrepreneurs advised to improve productivity

LAHORE: Management gurus on Friday advised entrepreneurs to improve productivity instead of taking short-term measures of cost-reduction, such as layoff and cutting numbers of suppliers.
“A cost excellence strategy focuses on closing the gaps and eliminating shortcomings; thereby, businessmen can address both the input and output inefficiencies in accordance with the needs of their customers,” said management expert Mubashar Bashir.
He said this strategy provides additional benefits as it promotes transparency, accountability and fast decision-making besides improving the morale of the employees. Cost excellence prevents a reversion to old and unproductive practices.
“Companies with a low cost base tend to generate higher levels of returns for shareholders,” he said, adding that this approach focuses on improving efficiency and effectiveness.
Nabeel Hashmi, a local entrepreneur said measures that reduce the cost immediately should be implemented first. This would create excitement throughout the organisation and convinces the workers that the cost reduction strategy is practical.
Early cost savings would also provide resources to fund other measures in cost excellence efforts, he added.
The successes of the cost excellence program largely depend on the commitment and confidence of the company’s leadership and the top management in the program. This will ensure the success of cost reduction plan and prioritised goals.
Educationist Almas Hyder said in order to sort out exactly how cost reduction opportunities will be identified and quantified, companies can select from a number of well-proven methodologies on the basis of the goals and scope of the program.
Strategist at an apparel unit Adill Butt said: “First, you have to assess the capacity of your organisation and then set targets for change accordingly.”
A bottom-up process is the best way to generate ideas about how to deliver the program’s quantitative and qualitative goals. As part of this effort, managers outline concrete initiatives and programs that will allow them to hit the set targets, Butt said.
He said it is crucial that after program measures have been kicked off, the planners should remain focused on completing these discrete components of the plan. Success of initial components of targets during implementation generates cost savings to fund investments that will make the changes sustainable and build real momentum throughout the entire organisation.