Downsizing seems to be the mantra to face the economic downturn for most Indian companies. But here is a company that stands as an example that with good managerial skill and innovation any crisis can be withstood. Bajaj Auto has decided to follow a few out-of-the-book measures like extending credit to dealers, reducing payment cycle to vendors, lowering inventory and keeping a constant eye on the supply-demand balance.
Bajaj has maintained a 6% growth year-on-year like clockwork, even in this year. But in the April to September quarter, the sales have actually declined by 1.5%. The usual surge in the demand during festive season has not been witnessed.
To face all this, Bajaj has already started losing weight on its production line by controlling the inventory. Production targets are revised every week based on the supply demand equilibrium. Furthermore the company has also brought down the payment cycle from a 40-day cycle to a 15-day one. Being a financially sound company, they have also started extending loans to their dealers. Now they are bracing up for the post-festive season when the sales usually goes down.