ILMA Compoundings - April 2020 - 38

BUSINESS HUB

Maintaining
Cost-Effectiveness
By Jim Moul

I

ndependent lubricant manufacturers don't have the luxury of
taking on net losses year after year
or tossing away money on ill-fated
ventures the way some of the bigger
players might be able to. The truth is,
as is the case with almost any smaller
business, remaining cost-effective year
in and year out is the only way to
remain viable in the market. For the
smaller ILMA member companies,
it's not about outpacing or outselling
the major corporations - it's about
remaining in the green lines and
turning a profit by the time the fiscal
year is over.
But what does being cost-effective
really mean? How does a company's
self-assessment process impact cost-effectiveness? And how can lubricant
manufacturers remain cost-effective as
the market evolves over time?

HOW TO WORK ON IN-HOUSE
COST-EFFECTIVENESS
Whether in reference to the lubricants
market or any other industry, one
basic truth is always the same when it
comes to cost-effectiveness in manufacturing: The costs of production
must not exceed the capital generated.
Otherwise, your business is not
making a profit. So, how can lubricant
manufacturers make sure they're saving where they can without sacrificing
quality or production levels?
Automation is one increasingly
common solution. Technology is
constantly creating new ways for
processes and tasks to be done without
human labor, so make sure you're
always considering how your labor
expenses could be better managed.

38

APRIL 2020

| COMPOUNDINGS | ILMA.ORG

And this doesn't just apply to the
factory floor - there are many ways
that automation and technology can
be used in the office to cut down on
various costs. For instance, cutting
paper-based communications and
mail even by half can make a huge
difference in expenses.
Energy cost-savings is another
area in which companies can make
a difference in their bottom lines
without making major adjustments
to production processes or materials.
One possibility is shifting toward a
demand-driven model of production
rather than a capital-based one. This
might mean scaling back production
during slow periods or adjusting staffing levels based on anticipated need.
REVISITING YOUR SELFASSESSMENT PROCESS
Undoubtedly, your business has some
kind of financial self-assessment
process in place to evaluate things like

expenses, profits generated and material costs. But when was the last time
that you evaluated this process itself?
For some businesses, a yearly
financial analysis may simply not be
frequent enough. After all, a lot can
change in a year. Consider whether
your business should be implementing
financial assessments on a quarterly or
perhaps semiannual basis. Or maybe
your particular business model would
benefit from a more long-term analysis, able to see growth or financial
changes over a period of two, three or
five years.
Also consider who should be
involved in the financial analysis
itself. You'll be surprised at the kind
of insights you get when you include
more than the staff accountants in
your assessments. Department heads,
distribution managers and other
employees who may not typically be
privy to this kind of information may


http://www.ILMA.ORG

ILMA Compoundings - April 2020

Table of Contents for the Digital Edition of ILMA Compoundings - April 2020

ILMA Compoundings - April 2020 - Cover1
ILMA Compoundings - April 2020 - Cover2
ILMA Compoundings - April 2020 - 1
ILMA Compoundings - April 2020 - 2
ILMA Compoundings - April 2020 - 3
ILMA Compoundings - April 2020 - 4
ILMA Compoundings - April 2020 - 5
ILMA Compoundings - April 2020 - 6
ILMA Compoundings - April 2020 - 7
ILMA Compoundings - April 2020 - 8
ILMA Compoundings - April 2020 - 9
ILMA Compoundings - April 2020 - 10
ILMA Compoundings - April 2020 - 11
ILMA Compoundings - April 2020 - 12
ILMA Compoundings - April 2020 - 13
ILMA Compoundings - April 2020 - 14
ILMA Compoundings - April 2020 - 15
ILMA Compoundings - April 2020 - 16
ILMA Compoundings - April 2020 - 17
ILMA Compoundings - April 2020 - 18
ILMA Compoundings - April 2020 - 19
ILMA Compoundings - April 2020 - 20
ILMA Compoundings - April 2020 - 21
ILMA Compoundings - April 2020 - 22
ILMA Compoundings - April 2020 - 23
ILMA Compoundings - April 2020 - 24
ILMA Compoundings - April 2020 - 25
ILMA Compoundings - April 2020 - 26
ILMA Compoundings - April 2020 - 27
ILMA Compoundings - April 2020 - 28
ILMA Compoundings - April 2020 - 29
ILMA Compoundings - April 2020 - 30
ILMA Compoundings - April 2020 - 31
ILMA Compoundings - April 2020 - 32
ILMA Compoundings - April 2020 - 33
ILMA Compoundings - April 2020 - 34
ILMA Compoundings - April 2020 - 35
ILMA Compoundings - April 2020 - 36
ILMA Compoundings - April 2020 - 37
ILMA Compoundings - April 2020 - 38
ILMA Compoundings - April 2020 - 39
ILMA Compoundings - April 2020 - 40
ILMA Compoundings - April 2020 - 41
ILMA Compoundings - April 2020 - 42
ILMA Compoundings - April 2020 - 43
ILMA Compoundings - April 2020 - 44
ILMA Compoundings - April 2020 - 45
ILMA Compoundings - April 2020 - 46
ILMA Compoundings - April 2020 - 47
ILMA Compoundings - April 2020 - 48
ILMA Compoundings - April 2020 - 49
ILMA Compoundings - April 2020 - 50
ILMA Compoundings - April 2020 - 51
ILMA Compoundings - April 2020 - 52
ILMA Compoundings - April 2020 - Cover3
ILMA Compoundings - April 2020 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com