Amit Sharma B-41

Management in Recessionary Times

Impact of Recession & How Companies can respond to these impacts-An Operations Perspective
During economic downturns, most companies go on the defensive -- cutting back costs, downsizing marketing efforts and commoditizing products and services - just to survive. Great companies do just the opposite. In recessionary times, they position themselves to win -- ramping up promotions, accelerating new product introductions, and keeping a visible profile. By taking advantage of the emerging opportunities, they not only differentiate themselves during the downturn but also position themselves for explosive growth after its turnaround. In recessionary times, great companies aggressively look for the "silver lining in the cloud" and mobilize resources to seize those hidden opportunities. They act, not react. The winners are those who recognize that their future is not determined by external events, but by their response to those events. They stay focused on what they have control over, and respond proactively to those they can't control. Companies negatively impacted by a recession never see the grander purpose such times can offer them. Instead, they perceive only the worst, react out of fear and shrink to a victim mentality. Great companies, on the other hand, see recessions as learning opportunities. They recognize that yesterday's thinking and strategies will not address today's challenges. For these companies, recessions motivate them to get closer to their customers, reassess their direction, and take action in new and creative ways. Their rise to the top is often a byproduct of their beliefs, attitudes and responses to such challenging times Great companies make room for new growth by "de-cluttering" that which is marginal or ineffective. During times of growth and expansion, it's easy to get hooked into over-spending, "overdoing" and over-confidence. Sloppy behaviours, attitudes and habits often creep in and get masked. All too often, companies go unconscious about important basics and become oblivious to "waste." Great companies take advantage of down times to de-clutter "excesses" i.e., any drains on time, money or people resources generating little or no return they scale back to what they do best in order to be at their best. They make room for new growth and profits

Great companies build their resilience muscle to thrive in tough times. In the 21st century, accelerating change, increasing complexity and escalating risks have become the new business reality. To withstand external shocks that can destroy a business, a company must build its resilience capacity. Resilience, first, is a mindset. Resilience thinking transforms uncertainty into confidence, fear into action and adversity into advantage. On an organizational level, resilience comes from a strong culture based on operational flexibility, employee loyalty and team collaboration. Great companies don't just rebound from a one-time crisis or setback. They build the capacity to expect the unexpected and continuously reinvent business models and strategies as circumstances change. They build their resilience muscle. CASE: Tata Autocomp Systems (TACO) Despite the global recession in the auto industry, TACO has managed to survive and grow by focusing on quality, cost and delivery (QCD). The company has created values for its customer by pushing quality through the Six Sigma programme. company has benefited from exposing its middle management to the best practices in the world. At the manufacturing end, the process of rolled through put yield was initiated. This process measures loss of work and re-work. The company has inculcated the JCMS process of manufacturing, which controls material flow, wastage and focuses on problem solving. To be a successful global player, it is important to benchmark global standards, as also to break away from it to become a leader. TACO is dependent on its many joint ventures (JV) to gain tech know-how. Since its inception two-and-a-half years ago, Tata Johnson Controls' (TJC) three-pronged value system has helped add immense value to its parent company, Johnson Control International (JCI). By managing time and streamlining product development, TJC has helped cut costs The engineering division of TJC is 270-employee strong. The cumulative workforce saves 50 per cent cost to TJI, and helps the company save $10 million globally every year. The company has initiated working in shifts to affect time compression, without a corresponding increase in workforce. Apart from this, TJC understands the necessity to respond to the customer's need for a successful product design. To achieve this, the company has initiated Product Design for Six Sigma. This maps the way in which TJC adds value to its consumers. Many common routine activities are carried out by layout engineers. These activities are then developed into niche designs. To resolve this, a common template has been created to avoid the initial duplication of work. Routine tasks are automated, so that engineers can focus on innovation. TJC's business operating system is in sync with over 200 plants globally.