R E C E S S I O N is synonymous with cost cutting measures to survive this difficult period.
ONE tip on how to reduce cost as a CONSUMER
Turn to buying cheaper substitutes. For example, dine at a middle-end restaurant such as Crystal Jade Kitchen instead of a restaurant in a 5 star hotel such as Shang Palace in Shangri-la. In addition, shop and purchase goods only when there is a sale.
ONE tip on how to reduce cost as a PRODUCER/ BUSINESS OWNER
Buy another company which is on the verge of bankruptcy. Therefore, the cost of acquiring this company is relatively low as compared to during good times. This results in a merger. A merged firm reaps the benefits of economies of scale (EOS) which results in cost savings due to expansion in output. An example of EOS is commercial economies where it is cheaper to buy materials in bulk. For example, Ocean Sky International, a textile company, with many production locations in the world, reaps technical economies such as investing in automation during recession. This enables the company to pick up when the economy takes at a turn for the better. Moreover, the company uses a Kanban system which is based on a pull system to pull and use only materials needed for the production when the need arises. This reduces wastage and cost of production.
Nicholas Ang 5W
I particularly like your posting on what businesses can do. I actually wish that you can elaborate more on what automation processes are involved as well as the defining features of the Kanban system. Good linkages to the economies of scale!
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