In times of the COVID-19 crisis, cost-cutting measures are a sensible and necessary measure for many companies. But where can savings be sensibly made without cutting performance too much at the same time? This is a very important question for the mechanical and plant engineering sectors, among others, as they are highly dependent on an intact ratio of available time and performance in their major projects.
Against this background, it is worth taking a look at how companies can reconcile cost-cutting measures and performance on the basis of their own processes. Even apart from measures such as short-time work and salary deferrals, which hit the headlines in 2020, there are ways to safeguard themselves for the future.
Use project management software for optimisation
Modern project management software helps to reinvent and optimise familiar processes in companies that are engaged in implementing projects with a significant portion of their operations. Running as smoothly as possible is very important, especially in times of crisis, and in the end promotes both financial results and customer or employee satisfaction. Having a project and defect management software in one is particularly valuable here: using the combined solution, problems that arise in the medium to long term as well as in the short term can be quickly identified and addressed.
So even in day-to-day business, there is a certain potential for savings, especially in companies that are already at a high level in terms of digitisation. This effect is even more pronounced in companies that have yet to take the next step into Industry 4.0. For example, with these software solutions, unplanned downtimes in production caused by delays in the supply chain can be integrated into planning earlier. This early warning via interfaces to ERP or MES software is important, as it provides the best opportunity to mitigate impacts or even mitigate them entirely through alternative arrangements. So the pursuit of cost-saving measures is by no means equal to the death of innovation for companies.
For this and the many other advantages of project management software to be adequately exploited, a holistic approach is particularly important. COMAN offers this with its extensive products and compatibility with numerous other programs. The latter ensures that data is forwarded to the project management software and thus only allows the creation of a complete overview in a software solution.
Further savings potential in companies
In addition to day-to-day business, there is also further savings potential in companies in other areas. In the financial area in particular, further liquidity can possibly be released by optimising the use of current assets, for example. In mechanical and plant engineering, current assets are tied up for comparatively long periods due to long project durations. As a result, many companies use loans to cover short-term liabilities, especially in times of crisis. The number and total amount of loans taken out and the associated interest payments could be significantly reduced by lowering the capital commitment period, which would mean less pressure and more financial freedom for companies. One disadvantage of this option is that such a strategy is difficult to plan and implement, particularly in times of crisis when orders are often either delayed or do not materialise at all.
The lack of planning certainty brings us to the final point: planning itself. Ultimately, cost-cutting measures in companies mean both not spending money and allocating the available money sensibly. For the latter task, the future must not be lost from view: those who focus exclusively on eliminating short-term problems will sooner or later lose sight of the big picture. For each project, therefore, careful consideration should be given to how medium- to long-term goals can also be achieved as effectively as possible and which actions are essential for the company's healthy future as a competitive player. The latter should be given high prioritisation when planning spending for 2021 and 2022.
For cost-cutting measures in companies, combine day-to-day business and long-term thinking
Cost-saving measures in companies should always be planned and implemented on several tracks. While you should always be on the lookout for optimization opportunities, especially in day-to-day business, adjusting internal company processes and financial planning also offers great potential for savings. For companies in the mechanical and plant engineering sector, this approach is an opportunity to use project management software and defect management software to optimise potential with regard to their own performance and to prepare for the future in other areas. Both measures ultimately have a positive effect on the financial balance sheet.