BLF INDUSTRY SURVEY 1995


This problem has been compounded by mature demands, rising costs, recession, over capacity and increasing customer emphasis on value-for-money. This is summarised in figure 1.


Figure 1. PROBLEMS IN THE UK LUBRICANTS INDUSTRY


Failure to compete on 'QUALITY'


Mature Demand


Customer Emphasis on Value-for-Money


Recession


Rising Costs


The consequences of this are:


• Poor returns on capital for some companies. • Declining margins in many parts of the sector • Financial difficulties for certain companies • Decreasing loyalty of customers to suppliers and brands • Difficulties in developing differentiated offers for customers


3.2 MANAGEMENT PRACTICES


The survey examined management priorities and the use of modern management practices in the main business functions of companies. The responses were analysed to identify weaknesses in the use of modern management practices. The main weaknesses facing many companies throughout the sector are summarised below:


GENERAL MANAGEMENT Performance measurement and business control are weak. Managers tend to use a small number of measures on an informal and unstructured basis, and to use evidence which is subjective and devised primarily from internal sources. Major weaknesses include: poor costing techniques; low usage of benchmarking and market research; lack of key control measures (particularly in Sales, Marketing and Product Development); and low use of formal plans in functions with complex objectives (such as Purchasing and Technology Management).


TECHNOLOGY MANAGEMENT


Managers place too much importance on up-dating products instead of gaining access to new ideas and differentiation. Although there is a high emphasis by managers on efficiently managing resources, not enough importance is placed on management practices (such as formal planning, modern costing and proper controls) to achieve these goals .


OPERATIONS


There are major weaknesses in the key management practices which lead to success in production and logistics. Of particular note are: lack of emphasis on integrated supply chain management;


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