Rs 16 in 8 months is a 22% RISE IN COSTS.
This is the headlines in today’s newspapers summarizing the recent rise in fuel prices in India. At the present price of Rs 89+, it’s a 22 % rise in 8 months in spite of COVID 19 pandemic and reduced incomes. Can this rise in cost matched by an equivalent increase in selling prices for the products or in the salary level one receives? If the answer is Yes, you are amongst the lucky few. Majority answer would be a BIG No.
Can Enterprises or individual consumers do something about this? Protests or dharanas do not reverse the increased prices. In fact, a public figure has added fuel to the fire (pun intended) demanding further increase in fuel prices to fund future public projects!!!
Suggesting 7 ways to meet this cost increase and minimize the adverse impact on Business.
- Rationalize the need – Analyze why and where fuel is consumed. Is it for Travelling, Movement of goods, heating, drying, process need etc and rationalize the need. Avoid them if possible. For e.g Instead of taking the Car to the Gym, why not walk to the gym if its only 1 km away and get warmed up or join a Gym which is walkable. Saves warm up time, fuel cost, parking fees & the wear and tear of vehicle.
- Improve the efficiency – Once rationalized and its confirmed that need is unavoidable, make equipment and process more efficient. A thorough cleaning, timely maintenance, operator training can help you reduce consumption considerably.
- Change the variables that governs consumption and Optimize them. If the need can be met using a less consuming resource, change over. e.g Instead of a 2000cc vehicle, use a 1500 cc vehicle or the route may be changed to reduce consumption. why not change to a less crowded time
- Reduce Cost by Maximizing utilization – Make most of the consumption by maximizing utilization. May be many tasks are combined to reduce unit cost.
- Look for alternatives – Gas could be an alternative fuel, same as electric vehicle.
- Minimize Stock – Don’t react and stock in panic as this shall further increase prices. Instead, buy with minimum buffer so that overall demand is reduced. Let the pump stock and when it overflows there, let the refinery stock. If it overflows there, prices shall head south.
- Become self-sufficient as much as possible – Grow your vegetables, fruits, do online banking, bill payments, Ironing, cook, bake, grill, do small maintenance to save costs in other areas as it all goes in /out of one pocket.
Good Luck in your efforts. As Taiichi Ohno, the Japanese Guru said “Costs do not exist to be calculated, Costs exists to be reduced “. Yes, lets act to reduce the cost and mitigate the risks instead of calculating.