Bloggenvolk- ACS Chicago Meeting Minus Gaussling

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Sadly, regrettably, and with heavy heart Th’ Gaussling must disclose that he was asked to cancel his trip to the ACS meeting in Chicago. The clarion call of duty has sounded for all hands on deck.  Mister midshipman Gaussling will take heed and report to battle stations.  Ours is not to wonder why.

It is probably a good thing. I always spend way too much money on books at these meetings anyway.   There is always the Gordon Conference ….

Perhaps other bloggenvolk can meet in Chicago.  I think it is important for people to socialize.

Untied Airlines

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Having flown a recent round trip on Untied Airlines- I’ve scrambled the letters in the name so they shall remain anonymous \;-), I’d like to post a few comments about the experience. This recitation of grievances only covers the latest experience with air travel. 

Untied airline, with it’s eternal financial and labor crises, seems to be economizing by restricting customer contact with its sparse staff.  These poor sods who work for UA seem to be in a constant crisis mode. To be fair, the Untied staff seemed chipper and even displayed moments of good humor.  But fundamentally this company is a dinosaur limping along by artificial means.

The few staff who work behind the now ubiquitous self check-in stations rarely look up to see who might need help.  By requiring customers to select limited options from the computer check-in stations, you freeze out degrees of freedom in the customer interaction process and make life simpler for the airline.

Untied is now requiring that customers pay to use the curbside Sky Cap check-in services at Denver International, one of it’s bigger hubs.  So the guys humpin’ luggage out in the weather and breathing car exhaust are taking credit cards and quizzing folks on who touched their bags.  I thought that curbside check-in sped things up for the airline and its use was to be encouraged. Now it’s a nickel & dime profit center.

Saturday March 17, we were waiting for Untied flight XYZ from John Wayne to Denver.  An hour before departure another flight of Denver customers moved en mass from another gate to ours.  The ensuing delay and confusion was painful to watch and I won’t bore anyone with the details. It was pathetic.

Another beef with Untied.  The pilots switch on the seatbelt sign at the slightest indication of turbulence.  So if you had designs on a trip to the lav in your ticked section, just forget it. Other Airlines like Frontier seem to have a more realistic threshold for this.

Isn’t First Class seating in what you might call the “crumple zone”? 

Here is my fantasy- I’ll invite airline executives to our home for a dinner party.  As they arrive, they’ll wait in line for entry with their shoes off.  I’ll randomly pull guests out of line for an undignified search but refrain from answering questions. Once inside, they’ll sit in the foyer until called to the “dinner table”.  The dinner table will actually be several rows of chairs with TV trays, all tightly packed together in a closet. Tiny bags of processed foodstuffs will be issued. After some delay, the scraps will be picked up, making sure to knock a few elbows in the process. After more delay, the exectuves will be asked to exit, single file.  I’ll be standing at the door to issue a smarmy farewell. 

Air travel used to be fun and exciting. I looked forward to it. Now it is just a series of indignities and minor outrages.  Pity. I get to the stratosphere so infrequently that it should really be fun when I get there.

Cash is King

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It is tough being a small company or start-up.  You have perpetual cash flow concerns and maintaining a big enough plug of working capital is always difficult. Add to this the fact that larger companies tend not to take you seriously on either the buy or sell side. 

Selling to a company that is much larger is often challenging.  They are often skeptical of your ability to deliver; they want to throw their weight around by dumping outrageous terms and conditions on the table; and they may want you to “invest in the relationship” with freebies like holding inventory, unpaid R&D, free R&D samples, or a dozen other things. 

One of the common purchasing tricks is to ask for wide range of volume pricing. That is, ask for the pricing of 1, 10, 100, and 1000 kg of a product.  What they will do is to look at the largest volume price as a sort of floor or asymptote price and then begin to ask for lower quantities at that price.  They know that you can offer the material at the low unit price one way or another, so why not ask for smaller quantities there as well?  This can be a very effective leverage when negotiating price with a vendor, that is, the knowledge of their fall-back pricing. 

As the manufacturer you are well aware that the economy of scale only works if you actually manufacture at scale.  Many manufacturers of specialty chemicals may not actually keep certain products in inventory. If their sales history is spotty or if it is relatively obscure, there is no way to predict demand.  So, dumping capital into finished goods that sell poorly is a bad decision most of the time.  When you do not carry a product in inventory, that is, you only make it on demand, your hands are tied in price negotiations.  You just can’t rationally offer 10 kg at 1000 kg pricing.

Another difficulty is invoicing.  It is almost always the case that the vendor will have to pay for raw material in advance, hopefully with commercial credit terms like 30 days net.  And no matter what, payroll has to be met.  So the manufacturer has to commit resources up front for a given sale. Only when the product goes on the truck can the vendor issue an invoice.  This is all reasonable and expected.

It is possible to go to your banker with a purchase order in hand and apply for a short term loan to fund the manufacturing costs.  It is important to get to know your banker well. If they have confidence in you they can help you out during tough times.

Typically, payment is due 30 days after the product ships.  Some companies will insist on starting the clock when the shipment arrives. For shipments in the states, this isn’t such a problem. But for shipments involving boats it can present cash flow problems given the month-long transit time.  Incidentally, companies that use the SAP accounting system will have requirements that will be as fixed and unchangeable as the very ground you stand on. 

It will usually transpire that the manufacturer will have to pay for raw materials and payroll well in advance of payment.  This is normal.  One of the ways you get into trouble is when raw mats show up too early or too late. Raw mats that show up too early will require payment sooner and raw mats that show up too late will delay manufacture.  Timing is important. 

Another kind of financial trouble you can encounter is from late payment or even nonpayment from a customer. Late payment gives rise to all kinds of trouble for any company, but especially for small, capital-deficient companies.  Receivables accountants maintain an aging chart for invoices.  After 30 days, the receivables person will begin to get nervous and get on the phone to roust the customer for payment. After 60 days, people are getting jumpy about payment and after 90 days there may be calls to the customers president or controller. 

When a company has a cash flow problem, they will direct whatever cash they have into their most critical expenses in order to keep the place running.  Your invoice may not be at the top of the list.  When you encounter this problem with a customer, it is important to keep your cool and try to get whatever they can afford to send. Chances are good that they are already twittered about it so threats and heavy handedness may be a waste of time.  But often it is the squeaky wheel that gets the grease (or lucre) in these circumstances. So it is always worth talking to the customer about payment.

This whole business of pricing, invoicing, and getting paid is deadly serious and the inability to do it well will shut a company down quickly.  We technical people often discount the accounting end of our business, perhaps believing that it is the domain of lesser skilled persons.  Successful companies, however, know that a good accounting group and clear policies are crucial for stable operation.

Start-up companies, however, may not pour resources into accounting systems as generously as they should.  Often, it is the founders who do the accounting themselves in the early days.  Eventually, the founders realize that they need book keepers and accountants to manage all of the cash flow issues.

Purchasing- The Dark Side of Business

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All sales people have to deal with purchasing people in some way or other.  In the B2B chemical business, where you never really meet the ultimate end user, sales people can be found to populate two levels.  Non-technical and technical.  Non-technical sales people are, in my experience, relatively scarce in the chemical field.  Yes, you do find people with degrees in business doing chemical sales, but without any technical savvy they are at a distinct disadvantage.  Most of the people in chemical sales tend to be technical types of one stripe or another- engineers, technicians, or chemists.

What has always struck me about business is the dramatic differences in culture and operating policies between companies in a given market.  Some companies make it nearly impossible for sales people to contact employees and other companies seem indifferent.  I have noticed that pharma companies are particularly stringent about employees meeting with sales people.  Of course, this may just be an artifact of my sampling experience.

There is a reason, of course, for a company to make it difficult for sales people to contact its staff.  They want their purchasing “professionals” to be present and/or in control during such encounters.  This is not unreasonable.  Some large pharma houses for instance have contracted other companies to do their purchasing for them.  This being the case, uncontained or off-line purchasing may be redundant, uneconomical, or a breach of contract. 

But the other reason for discouraging staff from meeting with sales people is this- purchasing people are skilled in the art of procurement.  They are familiar with company policies regarding suppliers and negotiation.  And, not insignificantly, they tend to be a bit more refractory to the enchanting ways of sales folk. 

A well run purchasing department is a type of profit center.  Not only are they required to get the cheapest and most stable supplier, but they are also tasked with extracting other concessions as well. Other concessions may include custom shipping & packaging details; custom specifications; an agreement to maintain inventory; special price/volume arrangements; or long term pricing agreements. A good purchasing manager is worth their weight in gold.  Over their career a good procurement staff can save a company vast sums of money and secure strateginc reserves of raw materials for competitive advantage. 

I joke about purchasing as the “dark side” because a good purchasing person can be a really tough sell.  They make sales people work hard for their money but in the end everyone is better off because it makes businesses more resilient and competitive.  They raise the bar and, painful as it may be, in the end we all benefit from excellence in business.

An Authentic Life

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So, if you live in a major metropolitan area like LA, how do you go about having adventure? Where are the untrodden corners that a person can explore? How does a person go about living an authentic life?  In such places, a person is absolutely surropunded by structure- streets, neighborhoods, commerical districts, underground infrastructure, zoning, civil law, criminal law, home owners associations, etc. You can’t dig a hole without doing a utility check. The airspace overhead is a codified layercake governed by the Federal Aviation Regulations.  Every aspect of life is structured. 

Even recreation is highly engineered in every way. I’m presently at DisneyLand. Every sound, texture, taste, smell, and view has been thoughtfully engineered for some specified effect. DisneyLand is a confederation of attractions held together by the glue of merchandising. In fact, virtually every form of recreation in SoCal (except the beach) has been contrived to give some kind of virtual experience. 

The effect of show business can be seen and heard in many ways here.  You can hear it in the way people speak, the cadences and the mannerisms are part of the Hollywood schtick.  It has permeated all of the surrounding space.  Show business remains what it was a hundred years ago, but with the raster scan of electronic immediacy.  It is still the rattling of a stick in a bucket of swill. The promise of titillating wonders and thrills. I’m hooked.

Whereupon Gaussling spoke in allegory

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After a deep but unrestful slumber, I awoke to find myself in a dark wood. I cannot account for exactly how I came to be in this gloomy place. It is a hard thing to grasp even now.  As I look back to that dark encampment, my heart quickens at the knowledge of what is to follow.  

After many hours of climbing through the dense thicket, I chanced upon a path that lead through the gloom to a valley whose hilltops glistened in the morning sunlight.  As I trod over a small hillock to the opening of the valley, I spotted a jackal some distance ahead in the path before me.  I stopped to rest for a while and ponder the situation. As I rested, the fearful animal disappeared into the tall grass of the glade.  Having lost some of my weariness, I again took to the sinuous path in the direction of the now rising sun.

The day wore on and the shadows retreated to their origin under the noonday sun. I began to notice large, flat field stones along the path.  As I continued my journey, they became greater in number and were festooned with a great many lichen encrusted runes. The stones were partially buried and had evidently been organized at some time in the distant past.  I am familiar with many styles of writing and symbols, but these marks were decidedly odd. Not only were they unfamiliar, but they were chisled by a hand accustomed to a wholly different way of using language.  I found one particularly large stone with a great many markings on it.  As I looked at the marks, I stepped around it to view the runes from different directions, trying to ascertain some form of structure and syntax.

What could these stones represent? After some time, I began to note that certain markings were found elsewhere, though in different combinations. Perhaps through inattention I wandered from the path for some distance into the glade.  Finally, shaken from the enchantment of these stones I tried to regain my bearings. I struck off in the direction of a nearby col in the mountains, hoping to intercept the path by sundown. 

As I broke a trail through the high grass a moving shape caught my attention.  It was on the left side of my view and may have only been a bird taking flight from a shrub. I had nearly forgotten about the curious animal I spotted earlier in the day, so the movement startled me.  Was it a shy visitor or a predator? Trying to take my mind off this unpleasant topic, my mind returned to the runes. What could they be saying?

[With apologies to Dante Alighieri- Th’ Gaussling]

Flying Links

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While I try not to operate this blog like a directory, on occasion there are links so compelling that I just have to do it.  The blog Growabrain always has great links and that was my entry point into these links. 

Apparently, someone much braver than I flew their airplane through a hole or gap in a mountain ridge. Check it out. Must be a homebuilt and must have been a calm day.  A bit of wind shear on either side of this could have ruined his/her entire day. 

In another video, a Swiss pilot flys a jet fighter through the Swiss Alps.  Pretty impressive. At about the 3 minute mark he flys up the Matterhorn.  Amazing.  This is quite skillful flying.  Any hiccup in the powerplant and you’re on the ground straight away in flaming, crumpled aluminum.

Finally, if you are not compelled to strap a single engine delta wing fighter to your backside after viewing this one, then quite possibly you are dead. Consult your physician.

Bloggenvolk Chicago ACS Meeting

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A group photo at the Chicago ACS meeting.  That would be fun and blessedly easy.  If bloggenvolk want to linger and talk, they could do that. (If you haven’t been to the Art Institute, I heartily advise a visit.)  It’ll be Chicago in March, so that means outdoors may be nasty.  We just need someone to shoot the photo and post it somewhere on the web. 

What about monday noon, at the convention center, in the entrance near that rotating product literature carosel they always have? Any takers?? C’mon.  Be a sport! I’ll be wearing a badge that says “Gaussling”. 

Cold War II

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In case you were sleeping, the Bush administration has looked up from its reassembly of Humpty Dumpty in the middle east and noticed, in apparent dismay, that relations with Russia and South America have fallen apart.  Golly Batman, how could it have happened?

That fountain of truth, Pravda, has been faithfully grinding out their grievances in regard to US insolence around the world.  Now that Russia has extinguished most of its free press, they can focus on a more coherent message.

Perhaps someone can set me straight.  The Soviet Union implodes in the early 1990’s. Arguably the most notable political event of the latter 20th century. Russia experiments with market economics. Yeltsin leaves. KGB veteran Vlad Putin takes power. Some oligarchs go to prison. Bad time in Chechnya. Journalists are assassinated. Dissassembly of what went for a free press happens.  Polonium murder of Litvenenko.  Putin initiates dispeptic criticism of US policy in general, and US plans for missile placement in former eastern bloc real estate in particular.  US awakened from desert trance to find that Russia is pissed.

Perhaps if the Dobson krewe in Colorado Springs were more interested in Russian politics they might have directed Cheney to pay more attention.  Wow. Did I say that? That was really cynical.