Libra Laboratory escapes industry problems through cost reduction
Published In:
El Observador Date Published:
10th April 2003 Author:
With savings between 20 and 30 per cent in different operative expenses, Libra Laboratory managed to improve its economic performance at a time that saw general consumption fall within the pharmaceutical industry. The company finance manager, Daniel García Badala, sums up how they achieved these results:
What motivated you to get in contact with ERA?
“I came across ERA through the press. As soon as I read that they offer to reduce costs I became interested. Nowadays the margins are limited and there are certain market difficulties in increasing sales so I was very interested in reducing costs and didn’t hesitate in contacting them.
Another attraction for us was the ‘no savings, no
fee' way in which they charge. So it didn’t represent any financial risk to us as it is based on real and effective
savings."
What made you decide to contract ERA?
“I must confess that my initial doubt, before I heard their proposal, was whether it was going to be possible to actually implement their suggestions in our company. Often, I have found, that even though recommendations represent benefits to not only the company but also to the employees there is opposition to change.
“I
also found that they came highly recommended in Uruguay.
Other companies" satisfaction with their results helped me to
make up my mind. Again, the most significant thing for me was that
they don’t charge any fees if they do not find any savings."
Which categories were analysed in your firm?
“ERA focused on operative costs without participating in our core business. They analysed costs in the areas that we did not have experience in or simply lacked the time to analyse.
“We did not choose the areas in which ERA worked, we let them determine which categories they believed it was possible to find savings.
“They proposed a large categories list to analyse, finding significant savings with the majority of these cost categories.
“Whether they found a saving or not, the final decision before we moved ahead with implementation was ultimately with
us."
Did it take you much time?
“No. They met with me on two occasions and from there with each of the personnel responsible for each analysed category. All the work was done in their offices. On my request, we agreed to have weekly monitoring meetings to maximize the savings
opportunities."
What was the result?
“In certain operative cost areas very good. Moreover in other areas that we did not think that it was possible to achieve greater savings they found opportunities and different strategies were implemented. We had significant savings in categories such as import and export expenses, insurance, freight and telephone among
others."
Were you satisfied with the overall results achieved?
“Totally. Moreover, we had savings of between 20 and 30 per cent - figures that we never thought possible to achieve.
“All the numbers that resulted after implementing ERA’s recommendations were encouraging. Furthermore, they were with us right through the implementation process and even when we had to speak with the
suppliers."
What would you say to an organisation who would be interested in hiring ERA´s services?
“I would suggest that they contact ERA to listen to their proposal. There’s no risk thanks to their ‘no savings, no
fee' policy. And it is important for any organisation to discover new savings possibilities.
“I have recommended ERA to several industry colleagues who are also now their clients.
“ERA´s work helped us to face a difficult year and achieve an effective impact on our results that we hope to double in future
years."
