Monthly Archives: April 2008

On Chemical Negotiation

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I always amazes me how little negotiation goes on in chemical B2B transactions. Buyers ask for the price of an obscure chemical and that may be the last you hear from them. Only rarely do I see pushback. Either a purchase order arrives or it doesn’t.  I’m not referring to trainloads of soda ash or other mass quantities of commodity chemicals. I’m talking in the one to 100 of kg range. People naturally take prices as fixed in concrete.

This is especially unfortunate or even tragic for materials that are very unusual. Items that have a low volume or minimal competition are products whose price has not been made rational through the forces of the market place. Competition has not forced the price to an optimum level.

Price is determined by what the market will bear. If there is limited exposure of a product to the market, then a rational price probably has not been reached and someone is leaving money on the table. Prices are initially based on some reasonable multiple of costs. The demand picture and the sellers anxiety to move product determine the real price point.

Much has been written about negotiation. I have no new concepts to add except a reminder that the best deals can come from multiple iterations of offer/counter-offer. Only by going into cycles of offer/counter-offer can you find out exactly what is possible to get from the bargaining.

Some companies, like SAF for example, are notoriously rigid in their approach to sales. I have found that they do fix their prices in blast resistant concrete. SAF is uber-aggressive in the marketplace because they are after total global domination. But not all companies are like this. Many are pleased to make a deal to get some material out of inventory.

What is troublesome for manufacturers of new or obscure products is that the initial price may frighten off a buyer. If the buyer recoils in horror from a price without any attempt to negotiate, then they lose the benefit of that product and the seller loses the sale and perhaps the entire market future of the material. I have seen this happen many times.

What makes this a difficult issue for the seller is that you don’t want to seem too anxious to drop your price. That just telegraphs to the buyer that they should expect a better price. The seller should have a front price that they want and a fallback price that they can live with. It is better to have the fallback price than nothing.  The skill comes in the smooth application of salesmanship.

A good sales person watches the prospective buyer carefully for flight impulse and silently swoops in like a vampire for the seduction and the lusty bite. 

Hip-motized by Doctrine

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It is interesting how people can adhere to abstract doctrines while reality rages all around them.  In particular, I am thinking of a recent “conversation” with an economist friend. A fundamentalist libertarian, he steadfastly refuses any hint of pragmatism in favor of his utopian idealology promoted by certain Austrian economists.

To the economist, anthing that smells like collectivism of any sort is deemed an automatic throwback to the failed ideals of Marx. It’s all about the individual and his property. Nevermind that any anthropologist will observe that people spontaneously form groups and associations to lessen risks and burdens associated with survival. 

Harm comes to people and society when those with a power position advocate for abstract doctrines over the welfare of citizens.  Notions of political structure, reproductive issues, qualification for acceptance into an after-life, or slavery are all sacred abstractions on which people have taken stands and many have killed or been killed for.

How many people have needlessly died because of the squeemishness of celebate men with the idea of condoms? How much destruction was released in Southeast Asia due to the opposed idealogies of Marxism and Capitalism?

Today, Americans face continued endurance of a broken health care system because certain vocal idealogues profess doubts over “Socialized Medicine”? American health care is already socialized to some extent. But in a way that favors the flow of cash to the coffers of corporate medical providers and insurers. Why do you think Warren Buffett is so enthusiastic about owning insurance companies?  You get paid up front. Surely there are other health care models out there that we can emulate.

Sustainable Chemistry and YOU

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A new chemical journal was distributed at the recent ACS meeting. It is called ChemSusChem and is a European effort published by Wiley-VCH Verlag GmbH & Co. The theme is chemistry and sustainability. Librarians and Deans will surely groan when they hear a new chemical journal is available. I don’t know what an institutional subscription costs, but they all seem to be very expensive.

More than a few of us are convinced that we are presently watching a slow motion movie of the de-industrialization of the European Union. Many will scoff at the appearance of another greenish journal, especially from the EU. Indeed, the EU does seem hell-bent on outsourcing its basic industry to other parts of the planet with lower overhead costs. But cost doesn’t seem to be the only driver.

The EU has become a confederation of nanny states, all seemingly pre-occupied with the extermination of risk (and the US is on the way as well).  Some of it is legitimate, I believe, but to a significant extent some of the EU fussing with environmental issues is due to an inability to come to terms with ppm-level risk. Thus REACH.

The effect of REACH may be that this de-industrialization is accelerated. I am now involved in trying to understand REACH and how it affects exports to the EU.  For smaller companies who do not have the administrative structure to accomodate a new shelf of complex regulations, this is a genuine burden. Not just in terms of direct labor to manage it, but also the associated liability of non-compliance.

So, back to sustainable chemistry. The basic idea of sustainability provides for minimizing ecological insult and maximizing the long term availability of natural resources. It is hard to argue with the merits of this. But I would take it a step further.  Sustainable chemistry can easily accomodate advantageous economics if it is executed right.

Advantageous how?

Turns out that the principles of sustainability run in parallel with many good operating practices in process development.  High space yields, good atom efficiency, minimum energy inputs, solvent recycling, hazard abatement, etc. All of these ideals add up to maximum economic benefit.  It is just a form of frugality.

The people who can implement sustainable chemical processing are R&D and process chemists and engineers.  By adding more frugal methodologies to our toolkits, we can put sustainability into practice. The direct benefit would be better process economics. The larger benefit is a better competitive posture for industry that has chosen to remain in the EU or North America.

Sustainable principles applied to process chemistry can be a “next wave” of innovation that can lead to a re-think by business leaders in the eternal chess game of industry.  A tidy bit of “sustainable chemistry” has already been published. We chemists should filter through this to see what may be applicable.

Of course, if our academic friends have been busy beavering away writing patents on it, then it will be a much harder sell to management.  But that is another post.

 

Filthy Lucre

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As usual, Th’ Gaussling’s most interesting observations of the ACS meeting are of a proprietary nature and will have to go with me to the grave. Our student and professorly friends can expound openly on what lights their fires. The lusty satisfaction of compelling oratory in the darkened halls of convention centers is part of the reward for the cardinals of the academy.  Members of the merchant class have to be satisfied with better dining.

People who are involved in personnel issues often speak of an employees “deliverables” as their work product. For those lucky enough to be in the academy, the work product includes teaching young minds, conducting research, and participating in the dissemination of the results in the form of papers and conferences.

For we chemists who did the deal with the devil in exchange for filthy lucre, our performance is rated somewhat differently.  Our performance metric only includes some understanding of science. Once it is possible to begin understanding a thing, the task of transforming a process or material property into an item of value begins. An industrial scientist’s deliverables includes many tasks that guide the company toward its goal of profitability and reward for the shareholders.

The part of the brain that sees a stick on the forest floor that resembles a tool is the same part of the brain that scans a molecule and sees latent functionality. The extraction of value from a composition or a process is a complex anthropological activity. Product development is anthropological because it involves the use of tools and organizational structure to provide products or services that are exchanged between groups.  

An industrial science group has to isolate value in some material property and contrive to bring some product or service into being.  But to get it to market, the science tribe has to cooperate with those with other skills. Organizations often resemble a confederation of tribes who cooperate with complex rituals and methods of exchange.

 

 

 

 

Fire Fountain

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Fire & Water Fountain

This is a fountain at Pat O’Brien’s on Bourbon Street in New Orleans. The more you drink the more appealing is the notion of having one in your back yard. This snapshot was taken with a hand held digital camera with no flash. It’s a wonder that it is as clear as it is.

Beignets and VooDoo

If you go to the French Quarter, you have to visit Cafe Du Mond for Beignets and Coffee. I’m sure they have banned trans fats …. \;-)

I have to say that despite the bawdy novelty of Bourbon Street, my main impression of the place is that it’s pretty unhealthy.  Not so much for the tourists, but for the folks who work there. It’s amusing to visit for a few days, but as a lifestyle it is quite corrosive.

 

Olympic Boycott. Lunacy of the Week.

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The talk of an olympic boycott by the US president in the opening ceremony in China is ridiculous.  It would surely have zero effect on Chinese policy toward Tibet.  It is naive beyond description to think that those sitting in power will reverse policy in such matters. To reverse a policy regarding sovereignty that has been defended with violence is to admit a shocking error in judgement and to accept responsibility for a wrong that is possibly criminal.  Autocratic governments never do this. Ever.

China has supported considerable US debt and continues to do so. We’re going to publically humiliate our bankers? We’re going to poke a finger in the eyes of those who have been supporting America’s deficit spending and military adventurism in the sandy spots of the world? I don’t think so. 

Buying fewer goods made in China is one good response. Put the money in the bank. Feed the pig.

NOLA ACS Meeting. Tuesday

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Tuesdays meetings included an awards symposium extravaganza in the organic division. F. Dean Toste was the recipient of the Elias J. Corey Award for Original Contribution in Organic Synthesis by a Young Investigator. Illuminati of the likes of Trost, Sarpong, and Grubbs gave their talks in honor of the awardee. Toste’s talk was on his work in the area of Au(I) catalysis. These gold (I) catalysts show an extraordinary propensity for coordination of alkynes and facilitating nucleophilic addition to the triple bond.

The reactivity of Au(I) is attributed to relativistic effects causing contraction of the 6s orbital and destabilization of the 5d orbitals. The result is a large aptitude for pi->M coordination and relatively low M->pi* backbonding.

Relative to Pt and Rh, gold is cheap. 

NOLA ACS Meeting. Monday.

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The talk by Frederic Stanley Kipping Awardee T. Don Tilley was worth the time to see. This UC Berkeley chemistry prof has accumulated a substantial list of results on in the organometallic chemistry arena, much of it with the use of silanes.

The ACS Awardee in Organometallic Chemistry, G. Parkin of Columbia University, was equally interesting. Parkin described his work with kinetic isotope effects and had some caveats for those attempting to draw mechanistic conclusions from such studies. The reaction temperature used in the study can give a positive effect, no effect, or a negative effect. Hmmm.

George Whitesides (GW) gave a talk entitled “Questions about questions about the origins of life”.  It was actually a kind of homily summarizing his summaries. Ok. Let’s see if I can do better than that.  GW has been ruminating on the origins of life and has come to the conclusion that neither the physicists or the biologists are equipped to solve the problem. 

The first matter that he paraded before the audience was this- is it enough to say that the world is bifurcated into two domains- alive and not alive? Is it binary or continuous? GW thinks it is continuous.  It just occured to me that prions may be a good present day exception to the assertion that it is binary. But what really matters is the question of whether life was continuous or binary during the peribiotic period while life was forming.

GW suggested that it is important for us to find examples of chemical fossils.  These would be chemical compositions left intact from that era. The problem of the origin of life cannot be answered by simple extrapolation backward from present biology because the peribiotic conditions in which life arose have not been present for several billion years. We are far from understanding the chemical and redox makeup of the peribiotic world.

The origin of life arose from reaction networks that afforded molecular species that could self amplify or self replicate in an anoxic, reductive environment.

The question of the mechanistic origins of life is vastly different from the question of the mechanistic evolution of life.

Both are chemical phenomena and a mechanistic picture of both will ultimately be assembled by chemists of one sort or other.

NOLA ACS Meeting. Sunday.

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Spent a good deal of  time in the INORG section talks. The Cotton Symposium talks have brought many friends and alumni of the Cotton Experience. Tobin Marks kicked off the symposium this morning with his usual overwhelming flood of results. Listening to a Marks talk is like trying to sip from a fire hose.  What always impresses me about the talks by Marks, Bergman, et al., is the large amount of kinetic and thermodynamic data presented to support the proposed mechanisms. 

The talk on the functional mobility of ribosomes by Yonath was just amazing. The Yonath group has been able to use heteropolymetallates to aid in the understanding of the conformational changes in the mechanism of transfer RNA mobility across the ribosome. 

My background did not include kinetic studies and I have always regretted this. The path to understanding is with kinetics and thermodynamics experiments, not just a simple report of yields and conditions. Once before they bury me, I want to do this.

The Kipping Symposium Honoring T. Don Tilly offered some interesting talks as well. Gelest  had a sponsoring role in this symposium.