ILMA Compoundings June 2018 - 23

It is necessary to watch the
dealer demands when analyzing
changes and predicting what
might change in the future.
How to Approach an Analysis
of the Market
Joe Zirnhelt is the chief operating officer and strategist at
Power Systems Research. His company focuses mostly on
global vehicle and power equipment industries, for which
it supplies market research, data development, analysis
and forecasting. The analysis provided by Power Systems
Research is used for market and product planning as well as
forecasting and tracking product usage and trends. Zirnhelt provided some insight into ways to monitor the dry
lubricant market for changes and trends based on methods
his company uses in other industries.
Power Systems Research has been using data gleaned from
phone interviews with generator set dealers since 2002. The
data collected can be analyzed based on types of generator
set and types of fuel, and on how much or little inventory a
dealer may have on hand. This information is important for
tracking trends and market changes, Zirnhelt said.
"The view from the dealer may be totally different from
the view from the factory where the product is manufactured," he said. "The dealer sales might be slowing, but the
factory may still be supplying product and looking good.
Each end of the supply chain may be a different story. The
dealer view gives you a perspective closer to the end of the
supply chain, the current user demand."
It is necessary to watch the dealer demands when analyzing changes and predicting what might change in the future,
Zirnhelt added.
The information Power Systems Research collects is based
on a set of questions and a sample size that remains the same
from quarter to quarter. Each quarter when the survey is
performed by Power Systems Research, respondents answer
five key questions:
1. How have last quarter's sales changed?
2. Have inventories increased or decreased?
3. What do you project for next quarter?
4. Why do you expect sales to go up, down or be steady?
5. What changes have you noticed in your customer group?

Power Systems Research then uses the data from the five
questions to analyze trends. For example, the fifth question
about changes noticed in customer groups helps Zirnhelt
identify customer trends and analyze how they might impact
the industry in the future.
The same type of analysis used for analyzing power generation dealers can be used to investigate the future of traditional
lubricant sales and possible changes brought about by dry
lubricants. Zirnhelt suggests using an "ongoing slot analysis"
to study input from end users and dealers through the supply
chain. In summary, find suppliers and dealers of a given dry
lubricant, then trace the product's movement through the
supply chain and see what is happening to it.
Data from the analysis can help current manufacturers
stay ahead of changes in the industry and find where
there might be changing demands for dry lubricants and
traditional lubricants. Power Systems Research studied the
hybrid and electric on-highway market for such changes to
help project what those changes will mean for traditional
lubricants using the same method for analysis. The same
principles used in an assessment of hybrid and electric
changes broadly apply when looking at any change that can
be an opportunity or threat to the industry, Zirnhelt said.

Helping to Smooth the
Path Forward
ILMA members know their products and the markets they
support. They manufacture, distribute and sell known
commodities that are proven in the market. However, the
examples and analysis explored above show there are other
opportunities worth exploring. It might seem like guesswork
at times, yet if methodical data collection and analysis are
used, then ILMA members may find trends and opportunities in dry lubricant markets that are profitable. Most
member companies have already seen or felt such changes
to their markets with the anticipation of electric and hybrid
cars. With an investment in analysis and innovation, perhaps
ILMA members can help smooth the path to a profitable
industry in the future.
Markel is a technical and freelance writer. He can be reached at
josh.markel@jpatrickwriting.com.

ILMA Compoundings June 2018

Table of Contents for the Digital Edition of ILMA Compoundings June 2018