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Chapter 8 Process technology 231
the particular needs of the customer. Prices tended to be
related to the weight of chemical used, however. Thus, for
example, the current average market price was approximately
£1,050 per kg. There were, of course, wide variations
depending on order size, etc.
‘At the moment I am mainly interested in getting the right
quantity and quality of Lerentyl each month and although
Production has never let me down yet, I’m worried that
unless we get a reliable new unit quickly, it soon will. The
AFU machine could be on line in a few weeks, giving better
quality too. Furthermore, if demand does increase (but I’m
not saying it will), the AFU will give us the extra capacity.
I will admit that we are not trying to increase our share
of the preservative market as yet. We see our priority as
establishing our other products first. When that’s achieved,
we will go back to concentrating on the preservative side
of things.’
The chief chemist
The Chief Chemist was an old friend of John Rhodes
and together they had been largely responsible for every
product innovation. At the moment, the major part of his
budget was devoted to modifying basic Lerentyl so that it
could be used for more acidic food products such as fruit.
This was not proving easy and as yet nothing had come
of the research, although the Chief Chemist remained
optimistic.
‘If we succeed in modifying Lerentyl the market
opportunities will be doubled overnight and we will need
the extra capacity. I know we would be taking a risk by
going for the AFU machine, but our company has grown
by gambling on our research findings, and we must continue
to show faith. Also the AFU technology is the way all
similar technologies will be in the future. We have to start
learning how to exploit it sooner or later.’
The production manager
The Lerentyl Department was virtually self-contained as a
production unit. In fact, it was physically separate, located
in a building a few yards detached from the rest of the plant.
Production requirements for Lerentyl were currently at a
steady rate of 190 kg per month. The six technicians who
staffed the machines were the only technicians in Rochem
who did all their own minor repairs and full quality control.
The reason for this was largely historical since, when the
firm started, the product was experimental and qualified
technicians were needed to operate the plant. Four of the
six had been with the firm almost from its beginning.
‘It’s all right for Dave and Eric [Marketing Manager and
Chief Chemist] to talk about a big expansion of Lerentyl
sales; they don’t have to cope with all the problems if it
doesn’t happen. The fixed costs of the AFU unit are nearly
three times those of the Chemling. Just think what that will
do to my budget at low volumes of output. As I understand
it, there is absolutely no evidence to show a large upswing
in Lerentyl. No, the whole idea [of the AFU plant] is just too
risky. Not only is there the risk. I don’t think it is generally
understood what the consequences of the AFU would
mean. We would need twice the variety of spares for a
start. But what really worries me is the staff’s reaction. As
fully qualified technicians they regard themselves as the
elite of the firm; so they should, they are paid practically
the same as I am! If we get the AFU plant, all their most
interesting work, like the testing and the maintenance,
will disappear or be greatly reduced. They will finish up as
highly paid process workers.’
The accountant
The company had financed nearly all its recent capital
investment from its own retained profits, but would be taking
out short-term loans the following year for the first time
for several years.
‘At the moment, I don’t think it wise to invest extra
capital we can’t afford in an attempt to give us extra
capacity we don’t need. This year will be an expensive one
for the company. We are already committed to considerably
increased expenditure on promotion of our other
products and capital investment in other parts of the firm,
and Dr Rhodes is not in favour of excessive funding from
outside the firm. I accept that there might eventually be an
upsurge in Lerentyl demand but, if it does come, it probably
won’t be this year and it will be far bigger than the
AFU can cope with anyway, so we might as well have three
Chemling plants at that time.’
Questions
1 How do the two alternative process technologies
(Chemling and AFU) differ in terms of their scale
and automation? What are the implications of this
for Rochem?
2 Remind yourself of the distinction between
feasibility, acceptability and vulnerability discussed
in Chapter 4. Evaluate both technologies using
these criteria.
3 What would you recommend the company should do?