The term recession refers to the economic phenomenon of a nation’s gross domestic product, or GDP, declining for at least two consecutive quarters of the fiscal year. This represents a time of low profits and zero growth, or more often negative growth, for a lot of businesses and organizations, both big and small. Most organizations, if not all, have to design new business strategies and implement effective measures if they want to minimize recession effects. Controlling recession effects on delivery performance, for example, requires much more than just blind cost cutting and laying off of employees.

Delivery performance depends greatly on how well the entire supply chain is managed, right from the procurement of raw materials up to delivery to retailers or end users. Recession can affect most of the steps in the supply chain, if not all, making it a truly difficult task to keep delivery performance at acceptable levels during periods of recession. But, in fact, keeping delivery performance high can mean the difference between going under and being able to go strong through a period of depression.

Now, on the surface, this might not seem to make any sense. When costs are high and demand is low, as in periods of crisis, wouldn’t it be better to drastically cut back on production and thus on operating expenses? Keeping a delivery system working smoothly is a costly ordeal, after all, both in terms of financial and labor costs. During difficult times, when every penny counts, it seems reasonable to cut back as much as possible and spend as little as possible, doesn’t it?

Such policies may prove effective in the short term, at least in terms of minimizing immediate losses, but in the long term, they may prove more harmful than helpful to a company. Most cutbacks and layoffs compromise a large part of the company’s delivery performance, and this decrease in performance will surely be noticed and disliked by clients and customers. When recession recedes and the economy more or less gets back on track, the poor performance of a company during the recession may end up costing them a lot in terms of customer satisfaction and retention.

On the other hand, if a company tries its best to maintain or even improve its delivery performance during tough times, it further adds to its reputation. Customers and clients will appreciate the company’s devotion to service, and will show this appreciation by staying with the company through and after the crisis period. In this sense, recession periods are times of trial for most companies, during which their actions and performance will either raise or lower their reputation.

How, then, should a company go about controlling recession effects on delivery performance? Essentially, the company should realize that cutting back on costs should not be the be-all, end-all solution. Instead, these cutbacks should be considered with care, in particularly paying attention to their probable effects on delivery performance. The best possible balance between cost efficiency and performance should be striven for.