Know How a Chemical Industry Can Improve Profit Margin through Cost Management?

1. SUSTAINABLE COST MANAGEMENT IN THE CHEMICAL INDUSTRY: A HOLISTIC APPROACH

2. The chemical industry is one of the largest industries in the world; they are the starting point for a lot of thing that we use and that are around us. The chemical industry converts raw materials into hundreds of different products some of which are food additives, plastic, PVC, pharmaceuticals, industrial chemicals, adhesives, cosmetics, printing inks fragrances, feed additives, paints, soaps, and pesticides. 

3. Operating Labour 1 For the chemical industry, the following are the cost elements: Plant Overhead 2 Maintenance Costs 3 Taxes 4 Insurance 5

4. Depriciation 6 Working Capital 7 Administration Cost Cont... 8 Research Cost 9 Selling Cost 10

5. While it sounds callous to suggest any solution that will lead to people losing their jobs, reducing or adjusting workforce could be a very effecting way to manage cost for chemical companies. In the manufacturing sector of which the chemical industry is a member, labour wages usually takes the largest chunk of the cost of production. Therefore, some money can be saved when production is analysed and workforce is adjusted accordingly. 1. LABOUR SAVINGS

6. This can be used by the chemical companies to reduce cost of labour, taxes and transportation. It is a decision to perform functions with the internal resources of a company, which helps chemical companies save the costs outsourcing requires. In addition to in- sourcing being effective for reducing and managing cost, it helps chemical companies boost their competitiveness and helps them control vital company information or trade secrets. 2. IN-SOURCING

7. Chemical companies have to do a time- to-time analyses of performance and the cost elements in the chemical industry. Knowing the amount of money spent on each cost element and how each of them affects production and profits could help chemical companies know the necessary adjustments and reductions. Each cost elements could be used to manage cost but care must be taken to prevent an adverse effect on productivity and profit.  3. UNDERSTAND THE COST ELEMENTS

8. Sometimes chemical companies keep spending money on production areas that are no longer productive or that have become less productive. Through advanced technology and new ways of production, some production activities become quiet useless and funding meant for them can be saved. 4. IDENTIFY INPRODUCTIVE EXPENSES

9. ABOUT US We combine economic success, social responsibility and environmental protection. Through science and innovation, we support our customers in nearly every industry in meeting the current and future needs of society. We combine economic success, social responsibility and environmental protection. Through science and innovation, we support our customers in nearly every industry in meeting the current and future needs of society. TATVA CHINTAN aims to strengthen its position as one of the world’s leading specialty chemical company. C O M P A N Y . C O M

10. CONTACT US 502/17, G.I.D.C, Ankleshwar 393 002, India +91-2646-253593, 238991 shekhar@tatvachintan.com