On Company Growth

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As a chemical company grows, organizational changes occur that alter the manner in which things are done. Some changes are beneficial while others are detrimental. A beneficial change is one in which the process of order fulfillment improves in efficiency. Order fulfillment is the core activity of any manufacturing business. Improvements that do not affect order fulfillment may be little more than decoration.

A detrimental change is one in which order fulfillment is negatively affected. Any change that reduces the speed or increases the cost of order fulfillment is a detrimental change.  Some detrimental changes are unavoidable. Improvements in infrastructure due to growth may lead to detrimental changes. Increased overhead expense due to new warehousing, increased regulatory compliance costs due to crossing a volume threshold, upgrading the pots and pans, or any number of other “improvements” may lead to negative change. 

Equipment upgrades can easily lead to unexpected organizational changes. New equipment leads to new procedures and new failure modes.  A new piece of equipment integrated into a system can lead to modes of failure and risks that were unanticipated. New equipment can lead to new manpower requirements and new demands on infrastructure. Suddenly, a new piece of equipment can cause the reorganization of activity around it. Machines may be limited in flexibility, but people can change their work habits to accomodate the device.

On a day-to-day level, a company may not sense that it has undergone growth, but in fact it has. The acquisition of new equipment can change the manner in which a company operates over the long term.  This is especially true if it increases the capacity of the plant. Equipment upgrades that increase throughput will lead to increased sales and, hopefully, increase profit. Soon, more cash is available for more upgrades.

Where a company can go wrong is the failure to tend to the institutional changes that have to occur with increased growth.  A company that grows in the plant but not in the front office (the overhead suite) is one that finds itself slipping behind the power curve.  Suddenly, increased volume leads to increased chaos. Unless institutional changes are made, the system may become dangerously unstable despite rising receipts. 

Japanese Trading Companies

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Selling goods to Asia can be challenging for westerners. End users of chemicals in Asia often use trading companies to do their buying.  Selling to an Asian consumer of chemicals via the usual tools of marketing- cold calls, advertising, etc.- is complicated by the fact that the buyer may not be the end user. A call to an end user, if you can find their identity, may be politely declined. Instead, you might be referred to the allied trading company or just shown the door.

Th’ Gaussling is not an expert in this area of business. But I have more than a passing interest. Under the egg on my face are plenty of black and blue marks from my latest lesson. I should be receiving a certificate for 2 credit hours from the correspondence school of hard knocks.

Outwardly, chemical trading companies often look like end-users of chemical products. If you visit their websites, they’ll promote the manufacturing capacity of their customers and the impressive list of fine chemical products. In reality, they are located in a cramped office suite with fax machines and a server that projects the image onto the internet.  Their activity is limited to buying, selling and arranging logistics. Trading companies are part of the social custom of strategic alliances in Japanese business. They may buy and resell with a markup. They may provide contract buying services. There are numerous ways to do the deed.

For a factory, this arrangement allows managers to focus on manufacturing. Since trading companies only get paid if they hand over their deliverables, there is always a productive stress on the procurement people to look after their cadre of customers. 

One big problem from the vendors perspective is negotiation.  Negotiating with an end-user through an intermediary trading company is complex and time consuming. It’s best to do this face to face. Negotiation over the internet is not the best method. Trust is an issue and one gains trust by direct meetings.

The discussion of technical issues may also proceed through the trading company. This is can be a nightmare. I have wasted far too many precious heartbeats trying to noodle information from the end user through the mouthpiece of the trader. But from their side, this amounts to providing needed service to the customer.

It is difficult for western suppliers to penetrate the mind of customers in the east and discover how to market their wares in that part of the world. The trick for western business development people is to invest time and effort in understanding Asian trading practices.  Pick up some books on the topic. Go to trade shows and talk to Asian exhibitors. Read the trade publications.  Develop personal relationships.  Price wins the day, but trust is part of the calculation.

Comet Holmes

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If your sky is dark enough, it’s worth stepping outside in the next couple weeks to look for Comet Holmes in the constellation Perseus. The comet is somewhat west of Mirfak, the alpha star in Perseus.  Download some kind of reasonable star chart or better yet, dig up some of that money you have buried in the back yard and spring for a copy of Sky and Telescope at the super market- It’s not gonna kill ya. As for Th’ Gaussling, I’m fond of the Norton Star Atlas.

According to the charts, if you make a line between Mirfak and the lambda star, the comet is nearly in the middle of that line as of this date. It’s hard to miss.  It is a fuzzy circular blob lacking a visible tail. It has a striking surface brightness that sets it apart.  Binoculars are a must for the full effect, though is a naked eye object.

For you green horns who are new to constellation work, before you go outside, actually look at your charts.  Find Perseus (between the Pleiades and Cassiopeia) and then find some easy reference stars to make your own pointer stars that will form a line that extends to the approximate location of the object of interest. If you can get two lines that cross at the region of interest, so much the better.  I used the gamma and delta stars in the “W” of Cassiopeia as pointer stars to find Mirfak.

For late linkers to this post, you’re probably out of luck. Check the date.

LunaBank. Off-shore banking on the moon.

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If you knew Th’ Gaussling very well, you would be quite surprised at his increasing skepticism with our approach to manned spaceflight.  I am an aerospace enthusiast. The most thrilling and terrifying moments of my life have occured at 7000 ft MSL with a Cessna strapped to my ass.  It is distressing to go public (well, under my pseudonym) with criticism of our manned space flight effort.

My first question is, what are we getting out of the ISS?  We’re racking up a lot of flight hours and the aerospace contractors are doing good business. The purpose of the ISS seems to be “Learning How to Build an ISS” if you watch NASA TV.  Where are the dividends to society? I’m sure they are there. Where is the tech transfer?

I know that research is being done on the ISS. But, how productive is it?  How close are we technically to going to Mars? The assessment of criteria for a Mars mission is supposed to be one of the work products of the ISS. Has anyone articulated how the big picture is looking? 

Apparently, a trip to Mars will involve a lot of gardening.

Hmmm. I can just hear it-

“Hey Bob! Where d’ya s’pose them sonsabitches at Kennedy put that g*ddamned shovel? ”

“Simmer down, Annie. For the third time, it’s behind the weed-eater next to the inertial navigation unit. Shee-yit!”

Given the commercial interests in building manned-flight rated hardware, are we really being honest with ourselves on the question of man-vs-robot? In other words, could we spend less and learn more from robotic space hardware?

Friends connected to NASA tell me that monies that were once available for activities not directly related to manned spaceflight are drying up. NASA is preparing for a return trip to the moon. We’re going to the moon again, but without any fanfare or sense of purpose. The public is largely disengaged and uncompelled. The public is disengaged because no one has heard the purpose articulated.

A country that has interest in an ongoing moon station will have to come up with more than just stunt or prestige value.  Huge inputs of national treasure will be committed to the enterprise.  Commercial interests should be folded in to produce goods and services in order to recover costs in some fashion.  The return of material products from the moon will have a very large transportation cost per kilogram.

The production of intellectual property, information, broadcasting services, or remote sensing will likely be the most attractive commercial products. Actually, the moon would be a good place for a Bank. Imagine a Swiss-style bank with safe deposit boxes located on the moon.  How much more secure a location for small treasures and damning evidence could there be? 

Similar ideas have been put into practice, starting with pirate radio of all things.  The Principality of Sealand was started as a micro-nation on a retired gun platform off the east coast of England. The plan initially was to have a remote location for pirate radio broadcasts.  Today, Sealand is the location of a secure data sanctuary called Havenco. The idea of a remote, encrypted data sanctuary was the theme of the book Cryptonomicon.

Naturally, other nations have voiced disapproval of the data sanctuary concept, citing potential for money laundering and other criminal activity. Havenco may find itself cutoff from the telecommunication network that keeps it alive.

The moon would be a great site for off-shore banking activity. Nobody owns the moon. It is outside the boundaries of all the jurisdictions on earth.  Funds could be electronically transferred to a remotely operated bank on the moon.  Hell, you could leave the doors unlocked and forget the vault.  At minimum, all you need to do is land a computer, a dish for data transfer, and some solar panels for power.  Once a year a service visit can be made by LunaBank people to service the equipment and swap deposit boxes. 

Aphorism #114. If you want to make money, you have to serve the people or institutions who have the money.

Eventually, though, there may well be jurisdictions on the moon. One day, the moon will be partitioned, so the last thing a LunaBanker wants is to suddenly be a part of the Soviet Union Russia or China on the moon. Or nearly any nationality, for that matter. The Swiss may be preferable, owing to their favorable history with this kind of business.

This scheme is very simplistic.  It will require more thought than that presented here and the criminal potential will have to be prevented. The question of what minimally constitutes a “Bank” and its relation to nationality naturally arises in this discussion. No doubt, there is more to it than my simple scribblings. But the point of this essay is that we as a spacefaring society need to start discussing this kind of activity and not just leave it to a cloister of specialists.

Mandarin Moon

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Apparently, the Chinese have decided to shelve plans for a manned moon landing by 2020.  According to XinhuaNet, there are no plans for activity beyond the landing of a rover and the return of samples by 2017.  Officials state that the technology for a manned program is still out of reach and that the risk and expense are too high for a 2020 landing. 

This is an interesting development.  I think there was some real interst in China for putting taikonauts on the moon.  No doubt, the infrastructure and development needed for such an effort became apparent. There is considerable prestige for any nation that manages to return the crew safely from a moon landing. But the pragmatic characters in the governing party surely recognize that the Giant Leap for Mankind has already been done and that resources are better spent on other “firsts”.

Other than operating a kind of Lunar Ice Station Zebra where a few lonely scientists would bivouac in metal pressure cans out in the hard vacuum and cosmic rays, I can’t think of a compelling reason for anyone to reside there for too long. For the value proposition, it’s hard to come up with any known mineral wealth up (over?) there that would justify the cost of transport. Generally, only pharmaceuticals have the extreme $/kg that might cover the expenses.  Mumbai, Newark, and Shanghai are much closer.  But who knows, maybe they’ll find a big vein of rhodium (US$6375/toz) on the surface.

Planetary scientists and atronomers would make good use of a lunar research station. But funding it would almost certainly require the shutdown of many other kinds of research here on the Good Earth. But what else would we do there? Take pictures? Wave the flag?

Going to a moon station would be like going to jail.  You would be confined to a cramped pressure vessel for the duration and Death could visit in new ways and old. What if you get a toothache? Would NASA have to mobilize a rescue?

What real military leverage would any country get from a moon base other than defending the moon? If you could afford a military moon base, you could also afford a fleet of nuclear submarines that could hammer any patch of real estate on earth you desire, and maybe bounce the rubble a few times.

I suppose there is planetary tourism.  A couple of weeks in the ISS will cost the plutocrat down the street a cool US$20 million.  Imagine what One Small Step on the moon would cost. Maybe Richard Branson is working on a package deal- rountrip space fare (coach seats, Virgin Galactic) and a week in the fabulous Sheraton Green Cheese resort for US$50 million. Some restrictions apply.

The Scariest Stuff- Pu and Phosgene

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Has anyone else noticed how people behave when they describe plutonium?  Invariably, it is described as the most 1) toxic, 2) hazardous, 3) dangerous material on earth. It seems that no matter the context, these adjectives or strings of other adjectives are used in the preamble. (See! I just did it.)  It is though plutonium really is thought of as a manifestation of the dark forces thrusting upward from the underworld. Certainly the name and applications infer some malevolent attributes.

I think this curious attitude to a chemical element exists because most people have no other reference point. In reality, plutonium is a dense radioactive metal, grey in color and sensitive to water and oxygen. It is/was produced by the reduction of plutonium  cation with metallic calcium. Like a number of other metals you can’t handle it in the open or without protective garb and inert atmosphere.

I have never heard a credible comparison of it’s chemical vs radiological hazards.  Is it chemically toxic, or does the radiological hazard drive the issue.  My guess is that the radioctivity dominates.

Its radioactivity (Pu-239) and chemical reactivity render it useless for much of anything outside of fission-related uses. It’s not even a good paperweight. You wouldn’t want to have a criticality accident on your desk when you spilled coffee on it. Think of the paperwork. Blue flash and heat pulse …

The same curious treatment is afforded phosgene.  Any mention of this substance outside of a chemistry journal invariably recalls the early uses in trench warfare.  The one time I used it as a post-doc, the purchase order for one mole of phosgene in toluene came back to me in the perspiring hand of the Dean of the College. He called me to his office and wanted to know precisely what kind of harm was I inviting to the University. Literally, he wondered what the neighbors would think.

This university was in a wealthy and exclusive neighborhood of a large city in Tejas. What would the neighboring plutocrats think of having research done with a WW-I war gas in their neighborhood? What if *gulp* there was a release?  That’s a fair question.

I was requested and required to write a letter describing the proper emergency response to a spill and what procedures I would put in place to prevent a mishap. This was not a memo of understanding, but rather it was CYA for the Dean in the case of an accident. He could wave the letter around in the inevitable investigation after an incident. He would pass it to my one remaining hand so I could read it publically from my hospital bed for maximum effect.

Oh yes, at near-threshold levels, phosgene has a fragrance very similar to lilac.

Hummers Hummin’ Along

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According to the Detroit News, GM has announced that they are going to spend $73 million on the Hummer H3T pickup manufacturing line.  The first units are scheduled to arrive at dealerships sometime 3Q08.  The new model is supposed to be somewhere between the Silverado and the Colorado in size.

It’s a curious thing as we approach US$100/bbl oil that GM is plowing forward with upgrades to its Shreveport pickup truck operations. Could it be that they see enough remaining price elasticity with fuels that their pickup production upgrades will pay off? It is notable that GM is introducing a Hummer pickup and not a mini-Hummer.  Economy isn’t in the equation.

To produce an economy Hummer would be to invite questions (and ridicule) about the merit of such vehicles to begin with. It is like diet fudge. What’s the point?

I think GM is taking a purely market-pull approach with this brand. The brand has value and they will offer the Hummer product line until the demand falls away.  GM hasn’t given up on large vehicles because the public hasn’t given up on them.

Bad Jokes

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Captain Kirk-  Bones, why did the chicken cross the road?

Bones- Damn it, Jim! I’m a doctor, not an ornithologist!

How many nuclear engineers does it take to replace a light bulb?

Fifty. One to replace the bulb and fortynine to figure out what to do with the old one.

The Nanny State. Gaussling’s 5th Epistle to the Bohemians.

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“We live in an age of miracle and wonder” is the refrain from Paul Simon’s album Graceland. All around us and through us are engineered materials devised for their specific physical and chemical properties. Time-released magic bullet drugs that inhibit specific enzymes. Flavorants, colorants, rheology modifiers, and manufactured food substances are engineered and marketed to satisfy our lizard brain’s willingness to shell out cash-for-calories and stimulate our limbic system’s emotive triggers. 

It is nearly impossible to avoid contact with manufactured goods that aren’t modified by chemistry. A century and a half of tinkering with substances at the nanometer scale has given us the ability to optimise the composition and performance of products that make our lives easier and safer.  Microprocessors and Lycra, Hastelloy and Lipitor. The chemical industry has evolved to produce the raw materials and finished goods needed for the performance we have come to expect.

However, history provides a record of the problems associated with the exuberant but uncritical acceptance of this flood of manufactured goods.  From radium poisoning of watch dial painters to chromium VI to asbestos, there is a long list of negligence and environmental insult. The trail blazing of chemical industry leaves behind it a chronicle of tragedy as well as benefits.

The result of the checkered past of industry is a growing (some would say “metastisizing”) intertwined web of state, federal, and international regulatory oversight and requirements. And with it- perhaps as a result of it- has come institutional risk aversion. 

In general way, risk aversion is a type of survival trait and is probably hardwired into our brains. It is hard to blame people for being wary or fearful of risks, especially those they do not understand. But on the other hand, risk aversion is also a type of inertia. It is a fulcrum from which metaphysical rather than physical justifications are leveraged.  

At what point does concern for safety become excessive and how does one go about commenting on it? In a sense, it is similar to being critical of a religion. Similar to interpreting religion, we interpret that safety is important, but we do not often have a clear path mapped out for us through the maze of details and choices.

It is possible for organizations to be dominated by confident voices that are risk averse. Meeting facilitators will piously intone that “safety first” is our policy.  Detailed SOP’s will issue, dragging out the most elementary actions into numerous steps.  There is great merit to SOP’s, but enlightened and proactive management of hazardous operations personel is more important.

Organizations can find themselves spiraling into micromanagement of even the smallest details for fear that a regulatory or liability hammer will fall at any moment. Indeed, if one studies the regulations in detail, it is easy to fall into this habit. Risk aversion isn’t just a personality issue, it is statutory.

Statutory risk aversion is the domain of the Nanny State. The name “Nanny State” refers to the sum total of regulated actions and conditions in our lives as well as the set of penalties.  Though perhaps well intended, the Nanny State seeks to zero out risk, even for the less risk averse.

The Nanny State makes the startup of new chemical technology companies prohibitively expensive.  Nobody advocates the idea that we should be free to pollute and risk the lives of workers and communities.  But even for the most skillful and well intended, there are too many regulatory landmines to dodge: air, water, and waste permits; local zoning; OSHA; EPA (TSCA); fire codes; insurance inspections; MSDS’s in multiple languages; ITAR; and DEA. All have reporting requirements, statutes, and paper trails to maintain.

The plant is the domain of the chemical disaster. The inner offices are the domain of the administrative disaster.  Executives fear being out of regulatory compliance almost as much as an exploding 1000 gallon Pfaudler reactor (alright, I exaggerated … slightly).

In my view, the USA is becoming ossified in Nanny State paralysis in much the same way the EU has.  The combination of technological risk aversion along with the popular sport of outsourcing by our nations corps of MBA wizards only serves to accelerate the de-industrialization of the USA and the EU.

In Memoriam. Professor Albert I. Meyers.

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[Note: An announcement is posted in this blog on 27 January, 2008 concerning a gathering at CSU on 22 Feb., 2008.]

This morning I learned of the passing of one the great pioneers of asymmetric organic synthesis- Dr. Albert I. Meyers, University Distinguished Professor of Chemistry at Colorado State University, on mole day, October 23, 2007.  I do not know the cause of death this moment, but he did suffer from heart problems for quite some time.

Professor Meyers got his PhD at New York University under Ritter in 1957 and later did a post-doc with E.J. Corey. He wrote a book on heterocyclic chemistry and got the highest synthetic chemistry honor of all- a named reaction; The Meyers Aldehyde Synthesis.

Meyers was best known for his developmental work with stereodirecting, chiral auxiliaries. The Meyers group developed asymmetric C-C bond forming reactions with oxazolines, formamidines, and bicyclic lactams. Enantiomeric carboxylic acids, amines, cyclopentenones, etc, were prepared by his group. Numerous natural products, including Maytansine, were the result of methods development from this group.

While asymmetric catalysis would eventually capture more attention later on, the early work with chiral auxiliaries helped to develop a more solid understanding of the mechanics of asymmetric induction or chiral transfer as some put it. The specialized vocabulary of stereochemistry was the norm within the group. Napkins at the local drinking establishments were often covered with scribbled drawings of diastereomeric transition states and arrow pushing over chemical structures.  AIM in particular had a knack for 3-D chalk sketches of chiral alkaloids.

The Meyers group at Colorado State in Ft. Collins was typically rather large and quite international. There was a time in the 1980’s and 1990’s when a special magic permeated the department. This was the era of Jack Norton, Louis Hegedus, John Stille, and Al Meyers- heavy hitters all and located at a northern Colorado Ag school.  It was a time of organometallic chemistry and asymmetric synthesis.  For the student, it was an exciting time and place to be doing chemistry. I count myself as extremely fortunate to have been there.

His love for his mistress- chemistry (as he put it)- was all consuming.  AIM had a sort of panache that generated enthusiam among the group. AIM loved the science and the people of chemistry.  Lunch with AIM was story time. He was very convivial and would regale his audience with amusing anecdotes of his travels and brushes with some of the larger-than-life characters in our field.

The Meyers group was a colorful lot. Multiple languages and strident voices could be heard in the lab against the tapping of chalk on the blackboard. AIM loved nothing more than to be engaged in a blackboard discussion with his sharpest students trying to noodle out some mechanistic or stereochemical problem.

He was a great guy and we’ll all miss him.