PlantSuccess Newsletter
Volume I,
Issue 16
11/28/01
Dear Subscriber:
Perhaps this year in particular, we are more aware of our
blessings and anxious to spend traditional family-oriented holidays with our
families. I was able to do that and hope you were as well. Of course, many of
our conversations focused on current events and the aftermath of 9-11. The more
important discussions were on the future, the opportunities that lie ahead and
what we must do to take advantage of them. We need to take the same approach
with our businesses.
For months and despite indications to the contrary,
spokesmen for all segments of the federal government have avoided use of the
dreaded “R” word. This changed Monday when the National Bureau of Economic
Research (NBER), the arbiter of when recessions begin and end, officially
declared that a recession began in March 2001 -- marking the end of a ten-year
expansion. No executive in the chemicals industry was surprised by this
revelation.
If this announcement is the bad news, the good news is that
the beginning of this recession is already eight months behind us and we will
see the end sooner. Many economists are forecasting an economic recovery early
in 2002. If so, the current recession would be close in length to the average of
the ten recessions since the end of World War II -- 11 months.
The stock performance of several industries, most notably
lodging, travel and airlines has suffered severely since the terrorist attacks.
By comparison, the share price of companies in the commodity chemicals segment,
led by PlantSuccess contributors Lyondell, DuPont and Dow, has at least
fared well over the past two months.
All companies are taking advantage of the slower economy and
the demands of Wall Street to cut costs by reducing the size of the workforce
and shedding unprofitable lines of business. Now is the time to implement
information technologies that make plant operations more effective. The
PlantSuccess newsletter and conference will continue to feature appropriate
tools and techniques and the companies making the commitments and reaping the
rewards.
Recently, we reported on the commitment by Rohm and Haas
Texas Inc, a leading provider of specialty chemicals, to implement operational
effectiveness software, from Verticore Technologies Inc, at its Deer Park
facility. Company president, Bob Brinly said, “We are counting on the Verticore
Productivity Solution to deliver more than $15 million in fixed cost reduction
over the next 12-months while providing the resources necessary to allow our
people to operate more effectively.” (For details …)
This announcement was followed by one from Peter
Huntsman, President and CEO of Huntsman Corporation, that his company “has
completed more than half of a major cost optimization initiative to take a
minimum of $125 million in fixed and overhead costs from Huntsman's North
American businesses by year-end.”
Huntsman is the world’s largest privately-held chemical
company and this is a significant accomplishment under any circumstances.
Huntsman concludes, "I am confident that we will emerge from this economic
downturn stronger, more focused and better able to run a profitable business in
an increasingly competitive environment." (For
details …)
The process manufacturing market has many opportunities for
creative, aggressive and collaborative solutions like these. Look for more from
PlantSuccess.
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Current Links
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Strategic Advantage: Planning, Budgeting and
Forecasting
New Accenture-sponsored research from the Cranfield School of Management in the United Kingdom,
"Delivering Value Through Strategic Planning and Budgeting" finds
that:
1.
An estimated 90 percent of companies consider their
traditional budgeting and planning process inadequate.
2.
Companies are poised and able to introduce technologically
advanced new approaches to budgeting.
3.
There is clear evidence of a link between a company's
budgeting process and its share price.
A survey of 40 companies in Europe, Japan, and the United
States by McKinsey, another leading consulting company, showed that many
executives think that knowledge management begins and ends with building
sophisticated information technology systems. This detailed report covers the
key issues of a subject that has been discussed for years. A focus on creating
a knowledge culture may be the missing link.
Predictions from Nobel Laureates
Next month marks the 100th anniversary of the
Nobel Prize; one-third of the 700 awards have been made to US citizens.
President George W Bush marked the event with a reception at the White House;
John Chambers, CEO of Cisco Systems Inc, marked the event with a first-time
survey entitled Education, Innovation & The Internet: Nobel Laureates Look
to the Future.
Nearly one-third of all Laureates participated in the
survey; their views and predictions are interesting and encouraging as they point to the power of the Internet to help speed
innovation, expand knowledge, education and excellence in human behavior.
Management
Style and Substance
Mike Emery, Rhodia plant manager, recommends an article from
The Star-Ledger as being appropriate to our readers regardless of position
within their company. I agree. There is no shortage of pundits or their books
on effective management. This is an easy and worthwhile read. Thanks, Mike.
This Newsletter generates a substantial number of visits to
our website, we welcome the interest and the access to previous issues of the
Newsletter which are available there. If you'd like to share this newsletter
with a colleague, just forward a copy. Subscriptions and cancellations can be
made by sending a request to Carl.Howk@PlantSuccess.com
Full links to Volume
I, Issue 16 Newsletter articles:
1.
http://www.verticore.com/2001_09_04.html
2.
http://www.huntsman.com/ShowPage.cfm?PageID=816&News_ID=649
3.
http://www.accenture.com/xd/xd.asp?it=enWeb&xd=services\finance\fpm_thought_planning.xml
4.
http://www.mckinseyquarterly.com/article_page.asp?L2=21&L3=37&tk=446384:991:21&ar=991&pagenum=1
5.
http://newsroom.cisco.com/dlls/corp_112001.html
6.
http://www.nj.com/business/ledger/index.ssf?/business/ledger/151db04.html