Why Not? An Engineer’s View of Recession.

Every company I visit, the picture is the same. No sales. No customers. Cutting costs and production to survive. People are not willing to buy products and services at the prices they are offered. GDP keeps fluctuating. Government keeps reassuring with false promises. Stock markets dip. Wars and conflicts escalate. Jobs are lost. Companies go bankrupt. With reduced expectation of sales, no new products and services are in the offing. Prime Minister urges for innovation, which is not happening. Overall, it is a gloomy atmosphere in India.

But the consumers stay nimble as always. They are busy re-framing their problems according to their budgets and now coming up with new solutions and new expectations. It doesn’t mean that the consumers are only busy figuring out cheaper ways of doing the same thing. They have different things to do and want to do it differently. The consumers still want to go on holidays, eat out, entertain guests, buy curtains and shoes, beautify home, build new ones, sleep better, stay healthy and bear children — but differently.

This then opens up a whole new world of possibilities for manufacturers, service providers and financial institutions — if only they care to see the consumer a little more closely. This is simply because the existing needs of the society have not vanished – nor would they. These still need to be fulfilled. So, when the economy is down people simply look to different product categories to solve their persistent problems and needs. They do make trade-offs that reflect their conscious and unconscious decisions. The question is: Will a modern woman stop wearing her lipstick? Will Indian families stop saving money? Will they stop buying gold? Will they stop watching the TV? Not likely.

So, here is a world of opportunity. While companies are only focused on cutting back production and costs, the consumers are busy with their own imagination and initiatives to keep them one step ahead of the companies. This makes it all the more important for companies to use their imagination and technology to step in and catch up with the imagination of the consumers. Though this recession will be much different from the last the consumers will come up on top.

And why is it so? Because consumers are now familiar with both the high end and the low end brands. They have a choice of Bata, Kadim, Shreeleathers, Reebok and Nike. They would not feel a bit shy or embarrassed to go for budget shopping and go to anyone who greets them with a choice within their budgets. They are now masters of favorably mixing or toggling between high end and low end brands for their various needs. So companies that rely on lethargy and not love for the consumers might become a thing of the past – a dinosaur.

Economics tell us that “labor follows money.” The same is true of consumers. They would follow budget prices without any hesitation.

So, keeping up with the consumers is not about predicting the next big need or the next big move or great market research. It would mean a deeper understanding of their present needs and how to respond as creatively as possible. This is because consumers are only re-framing their problems – not forgetting them for good. So, companies who understand how people with tight budgets re-frame their problems may not only find new opportunities but also figure out ways to earn respectable profits. Thinking and feeling about people’s needs can uncover ways to get into markets that once seemed inaccessible or even unimaginable. For example, the Re 1/- shampoo sachet — shampoo companies are now ever so busy selling them all over India. And as I know they are expanding the business even in these trying times. They are adding more sachet machines (I am proud that I designed those budget machines) to their facilities. And they are still hungry for more.

Other examples spring to mind. For example, why take the trouble of making grade 53 cement only to sell it at a premium? People can very well do without this. Even the toughest roads are built on grade 42. So, why not make grade 30, for instance, for making dwelling houses. It makes housing affordable.

Why the steel companies don’t think of manufacturing rods of lesser diameters than they presently produce. The builders then get it cheaper and the houses that are built with such rods would become stronger and more robust in both tension and compression. And the consumer would also be happy to buy such houses and not default on house loans to heat up the economy.

Similarly, why not sell cheaper power during night time so that people may run their washing machines to wash their clothes in the late evenings and use air conditioners to get a good night’s sleep only to be more productive the next day. It would also encourage consumers to use more natural light during the day and the the power that is saved by ordinary consumers might be gainfully used by industries to produce goods and services for the market and the power companies profit more from it. This might as well save us the trouble of building extra power plants for the time being, when money is short supply.

Why do we waste material to build something solid when a hollow section would clearly be better (example, rubber liners used in mining industries). And why use costly steel or aluminium as reinforcement for rubber products when humble jute fibres do the trick better (one of my ideas tried out with great success by a rubber company).

Why make the walls of the gear box casing thick and heavy and waste money — clearly it could be made thinner. The customer pays less and the efficiency of the gear box increases greatly (another idea of mine which proved profitable for the company).

Why place sleepers under railway tracks symmetrically? It increases wear and tear of railway tracks, points and crossings and the maintenance cost goes up, which forces consumers to pay more or Government absorbs the cost. So, why not place the sleepers axi-symmetrically? It makes everyone happier. Lesser costs. Lesser risk of accidents.

Why wrap steam pipelines with equal insulation thickness when variable insulation thickness makes the job more efficient and cost effective. It reduces loss and prevents failures.

Why can’t the nozzles of toothpaste tubes be smaller. Less waste. It prevents health problems. Saves the environment. Makes it affordable for most.

In every case, the consumer pays less but companies benefit and survive better. It is clearly a great opportune moment in history for a win-win situation — saving and sustaining the environment, helping consumers to tide over the crisis and surviving better in trying times without destroying the morale of the people by sacking them or closing down industries.

Hence, this recession may just be the right environment for experimenting with small changes that target big needs. Innovation is all about making small changes to make big and lasting social impacts.

Why not open up to immense possibilities around us?

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