ILMA Compoundings - March 2021 - 18

OFFICE FUNCTIONS, FROM THE HOME

When the pandemic arrived, companies that had already
revolutionized their workplaces through technology found it
simpler to activate their remote-work policies. Chrysan leveraged its existing cloud-based enterprise resource planning
system to manage such operations as production planning,
financials and purchasing to extend work-from-home
policies to five days a week.
Chrysan also kept a " very, very close eye on expenses, "
said Gerhard, freezing spending in areas including training,
travel and team-building events. A hiring freeze imposed
early in the pandemic was lifted after six months.
As many companies discovered, sound pre-pandemic
practices created a solid platform for pandemic response.
Chrysan's existing practice of sharing company performance
and challenges with all team members monthly paid off
when that same system was used to share pandemic updates.
" The pandemic effect was more about making sure people
were doing the right thing and not putting themselves and
others at risk, " said Gerhard. " It's pretty much motherhood
and apple pie, but we really have a team of dedicated people. "
Knowing there would be a light at the end of the tunnel,
Master Fluid Solutions seized the downtime to upskill its
grounded sales and supply chain teams, Denton said. Strategic decisions were made to provide training in such areas
as pipeline management, product applications, negotiation
and project management. The downtime also afforded
opportunities to perform cleanup on data systems, to help
streamline future decision-making.

CONTINGENCY PLANNING

Lubricant manufacturers are experts at anticipating and
managing risk, even when they can't predict the details.
No one could have foreseen a yearlong pandemic, but the
extended crisis provided time to reflect on the inevitably of
the next upheaval - whatever it might be.
" Maybe we've all become a little paranoid, in a good way,
that we need to think like that, " said Gerhard.
Effective risk planning relies on a quality management
system that scrutinizes the full range of resources, including
customers, supply base and employees, in the effort to probe
for risks. Strategically oriented contingency planning and
communications were key to sustaining Chrysan operations
and avoiding shutdowns and restarts, said Gerhard. Staff
focused on risk-based assessments of suppliers, asking the
what-ifs of possible shutdowns.
The pandemic " certainly highlighted " the importance
of agility in crisis-response planning, said Denton. As she
focused on a strategic initiative to globally integrate Master
Fluid Solutions' teams, the effort included a review of risks
- whether in raw materials, supplies or secondary sources
- on a weekly and, at times, daily basis.

MARCH 2021

| COMPOUNDINGS | ILMA.ORG

" By pretty much every
account, global industrial
production is projected to
be fairly robust and bounce
back, which drives activity. "

Ben Scharff, managing
director, Grace Matthews
Master Fluid Solutions' culture of collaboration and fair
dealings also played a role in crisis management. The company leveraged its longstanding relationships with suppliers
and customers to source materials and combat the impact of
the virus, said Denton.

M&A

The pandemic forced companies to reorder traditional business priorities. That included the due diligence demanded
in mergers and acquisitions (M&A), said Ben Scharff,
managing director of M&A advising firm Grace Matthews.
With information scattered across systems, 21st century
due diligence takes longer than ever, and in 2020, merger
deals fell through in multiple sectors because the companies
involved simply didn't have time to complete them. They
were, instead, forced to pivot to survival mode to protect
people, balances and supply chains.
In M&A, COVID-19 also added a new layer of uncertainty to a process that hates uncertainty. Unprecedented
circumstances challenged traditional norms of gauging
year-over-year underperformance and overperformance.
Companies that dipped but quickly returned to preCOVID-19 levels of benchmarks aren't likely to be devalued
by potential buyers, but companies that have been slow to
recover - perhaps because, like lubricants, their fates are
sometimes knotted with struggling industries such as automotive and aerospace - could face devaluation pressures.

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ILMA Compoundings - March 2021

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