by Rob O’Byrne today on Radio MTR Melbourne and 2SM Sydney.
As talk of another GFC builds, perhaps initiated in Europe, many Australian businesses who survived the first GFC may simply not survive the next. Added to that, Prime Minister Gillard’s carbon tax plans may just be the final straw for many local businesses, as it will merely raise their cost base even further and so that those who are already struggling can no longer compete.
Author, Speaker and Supply Chain Expert Rob O’Byrne said “Only the Smart businesses will survive any future down turn, because they know the secrets to cutting costs quickly.” Sadly this will inevitably mean more local businesses closing and going offshore. Australia is destined to become a consumer rather than a producer in the future.
Recent detailed research of 831 companies in Australia and overseas shows clearly that the old cost / service thinking is absolutely wrong. Only those organisations that dramatically streamline their business operate at much lower cost. Even half the cost of their competitors! The key to surviving any future recession will be to dominate the market in terms of customer service and do so at much lower costs. A double whammy.
- Consumer price pressure will increase
- Higher cost businesses will not survive down turn
- Smarter businesses will be the more profitable businesses
- Only 2% of businesses operate at World Class cost and service
- Those with high costs will be the first to fall
O’Byrne is concerned that many of the almost 2 million small businesses in Australia, that are already finding it hard to stay afloat due to their higher unit cost base (higher than larger businesses) may really struggle once the Carbon tax hits. Not because they will be paying the carbon tax directly, but because many of their suppliers will be, and will pass that cost through to them.
Author, Speaker and Supply Chain Expert Rob O’Byrne consults to hundreds of leading organisations in Australia and around the World and has recently published the first of a series of books titled ‘Supply Chain Secrets’ to highlight how Australian businesses can become more competitive. His clients include many of the top 100 businesses in Australia.