The Light Green Machine Institute
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1 Mar 17: The effect of high operating margins

It matters not the industry, I have noticed all my life that businesses with high operating margins have the latest equipment, the most innovative layouts and the most efficient operations.

From farming to consumer goods to paper to the medical profession to electronics, this always holds true.

So it leaves us with the age old question, which comes first, the chicken or the egg?

Did the best equipment begat high operating margins or did high operating margins begat the best equipment?

It is clear that in our business the grades of paper are made on the older machines which tend to be the most obsolete.  Such grades tend to suffer from the worst maintenance, too.

However, I have seen management teams come along in such situations and with small tweaks and better maintenance practices rise to outshine their peers--and hold that position for years.

So, maybe it is (relatively) high margins and good management that can make a difference?

Thoughts?
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Thanks in advance for your cooperation.
 
with "LGMI Frontiers" in the subject line. 

  
As always, your comments will be appreciated.
 
 


Think light!

Brian Brogdon, Ph.D.
Executive Director

or

Jim Thompson
Founder
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