Currently everbody is talking about cost reduction. But what does that mean and what kind of impact will this have for the future development of a company. If we talk about to reduce cost normally what comes in mind are things like: licenced components, workforce, development tools, operations, fewer features or platform architectures.
on the other hand when we talk about to increase revenue, most of the time we have in mind words like: time to market, access to market, product portfolio, company positioning, multiple product opportunities, synergistic product sales, cross selling, new service offering or enhance operations. Its the question of >is the glass half full or half empty<. No doubt, to save cost these days is neccessary but until what point does that go.
Take logistic costs for example. Today the suppliers along the whole supply chains are checking every coin twice. Less orders and as consequence the inner stock becomes reduced to a minimum. But what happens when all of the sudden you receive a big order?? or even worst after the hugh order there is again nothing after in the order pipeline. To bring it to the point, to have a difference of 200 % between the a full loaded operation and today`s situation. Flexibiliy is in my opinion the solution to this up`s and down`s in operation. The company which is able to be highly flexible will have customer when the economy goes up at the end. All other companies might save cost to their total bankrupcy. Simply because the secret is though a highly felxible production you will garuatee delivery reliability. And that is what besides quality really counts.