be able to alter automatically the course of the computation, dependent upon intermediate results. A significant advance in the reduction of card handling was the IBM card programmed calculator (1949), which consisted of standard accounting machines only slightly modified to permit a tabulator, a reproducer, and electronic calculating punch to be interconnected. CPC, as it was designated, utilized card programming rather than wire programming, and results were printed on the tabulator without intermediate card punching. However, the ability of a machine to control computational flow had to await development of the stored program concept. I n 1945, the first all electronic computer was constructed at the University of Pennsylvania’s Morse School of Electrical Engineering. This machine was called ENIAC (electronic numerical integrator and computer). Subsequently, an intensive amount of university research was devoted to electronic computers. This culminated in their commercial availability about 1951, starting with Univac, and followed in rapid succession b3 IBM 701, 702, 704, and 705, ERA 1103, and others. At the present time, a wide range of computers is available, so that for most technical problems in the chemical industry, the feasibility of carrying out a data processing study is not limited by machine capacity but, rather, by the time required to obtain the data, perform the mathematical analysis, and write the instructions for the machine in a suitable coding system.
I
Development of Computer Applications
When computer applications first utilized machines beyond the range of desk calculators, the problems were the relatively small ones heretofore solved with desk machines. Some spectacular successes were obtained in these pioneering efforts, resulting in over-optimism and inevitable disappointments in regard to the capabilities of computers. For example, intrinsic machine speed was often cited as a n index of over-all performance, without recognizing that for many problems the time required to formulate the problem and do the coding greatly exceeded the computation time. However, as experience was gained as larger and more versatile machines became available, the scope and variety of problems rapidly increased. At the present time, the range of problems which utilize computers for their solution covers every phase of technical and business activity. These are too numerous to list, although a detailed description is available [Williams, T. J., Johnson, R. C., Rose, A., J . Assoc. Computing Machines 4, 393 (1957)l. The broad categories include : Data-processing activities common to all business enterprises, such as inventory control, sales forecasting, transportation scheduling, economic analysis. Research and development; for example, thermodynamic and kinetic computations relating to new processes and to new products. Plant design, plant operations, quality
control of raw materiaIs, intermediate, and finished products. I n the petroleum industry, exploration and production of crude oil and gas. Information retrieval. There is a wide range of activity in computer usage among petroleum and chemical companies. Some have spent millions. Others have done virtually nothing u p to the present time. Even where there is considerable activity among similar companies, for example, among the major petroleum companies, there is no uniformity in type of application. I n some cases, refining is emphasized, in others, production of oil is emphasized, and in still others, management problems are the main interest. The number of electronic computers in use and on order among the chemical companies is difficult to state precisely. At the end of 1957, the number of machines in the so-called medium size and large size categories exceeded 100. However, in approximately half of the installations, computers are used for both accounting and scientific work. The incredibly fast development of computer applications has created a number of problems such as machine administration and communications which must be solved before the full benefits of computer usage can be realized. These difficulties are being overcome, and better machines are being developed. Consequently, in the next decade utilization of electronic digital computers will expand significantly activity of interest to the chemical industry. RECEIVED for review March, 5, 1958 ACCEPTED JUIY29, 1958
J. W. REDDING
Standard Oil Co. (Indiana), Whiting, Ind.
Electronic Data Processing and Management in the Chemical and Petroleum Industry Electronic “brains” cannot substitute for management in decision making. Instead, they provide a firm, precise background on which management can base intuitive solutions to complex operating problems E m C m o N I C data processing systems for handling business data have been in use for more than six years. During this time several hundred installations have been made. Because the effect of these systems on business management and organization has been something less than spectacular, and certainly not revolutionary, some recent publications indicate a growing feeling of frustration on the part of some members of top management. This does not indicate a need for a
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reappraisal of electronic data processing. Based upon past and current experience in the continually rising standard of living and the changing composition of our work force, the trend to automation in the office as well as in the factory must continue. However, in emphasizing the potential of electronic data processing equipment, there has been a tendency to gloss over the substantial effort that must be spent in planning and development before these machines can be used
INDUSTRIAL AND ENGINEERING CHEMISTRY
to solve business problems. Development here refers to the necessity for accurately and precisely defining the problem. There is also a need to place the electronic data processing system in its proper perspective, not only in relation to business data processing systems as such, but also the objectives of such systems. Management Functions
At the risk of oversimplification, management may be described as the
‘
function of setting standards, measuring performance, comparing with the standard, and then taking whatever action is necessary to give the desired direction to the activity. Obviously, the concept of “feedback” is as important in good management as it is in process control. Similarly, as a process requires a control system to regulate operation of the equipment, management uses a system which possesses many of the elements of process control. Instead of collecting process data such as temperatures, pressures, or flows, the business system collects such data as hours worked, rates of pay, and finished products produced and sold. These data then are transmitted to some point where they are worked on and converted into records-inventories of information. Further processing produces reports which management uses to evaluate performance and to make decisions giving direction to the business activity. Simply stated, a business system is the mechanics by which clerical functions are performed. I t includes machines, forms and forms flow, and the sequence of operations. Because management must work through systems, this term has become synonymous with managemente Consequently, good systems means good management. Thus, as the Process control system enables manufacturing equipment to achieve its Processing objectives, the business system its organizational purpose. Clerical operations involved in a business data handling system are Possible applications of data Processing machinesThese Potential applications may be divided into two general categories: volume data processing of single applications, and integrated data processing of several interrelated applications. Included in these categories are such applications as large industrial payrolls, large customer billings, inventory stock level control, and accounting. These also seem to be the most common entry into the data processing field, primarily because they represent a substantial labor cost, and the systems requirements are clearly defined.
An electronic computer-the
chemical engineer’s research assistant
handling of exceptions are needed as well as clarification of the terms Even more important than stand dization of procedures and defining of exceptions is the fact that data processing and lower-level decisions go hand in hand. These are the day-to-day decisions required in the routine operation of the business and are generally quantitative in nature. Even though the speed of an electronic system, for example, provides an economical method of handling large volumes of business da vision must be made to incor such lower-level decision make data handling system if it is From a machine point of view, such decision making should present no great problem as any judgments involved usually are nothing more than shortCut calculations and the decisions the result of a comparison. A typical application involving this type of decision making is an inventory stock level control procedure. Because the judgments involved are not complex and the decisions are not difficult, they become mechanical and routine. Unfortunately, even though criteria for handling inventory requirements seem to be well defined to the ware-
decisions are made. .This need has slowed u p the installation of many otherwise simple clerical tasks and routines. I n higher management levels the problems associated with management control are still less clearly defined. Generally, decisions made by upper management are of a periodic and often nonrepetitive nature. Often there is no one best solution to a given problem so that a choice must be made between several good possible solutions-the actual decision involving human business acumen and judgment. Although electronic data processing equipment can prepare alternate solutions to be considered by management, underlying patterns of business operations and relationships must be more clearly established. Even in the area of “rnanagement by exception,’’ what constitutes an exception is frequently not clearor even to whom it should be reported. This is important, as the feedback of exceptions are the real controls of the business system. Until the present limitations in the knowledge of management science (as opposed to the art) are overcome, the potential of electronic data processing equipment cannot be fully exploited by business management. However, even
Precise Operations However, even with such well-understood applications as these, there is a need for stricter data handling disciplines such as extensive formalization and standardization of procedures, especially in those instances where the system has been essentially manual. Special emphasis must be placed upon the preparation and handling of data a t the point of origin or entry into the data handling system. Even in these simple systems more precisely defined
,
something less than Flearly defined. vel decisions are in-
tiveness, risk, and cost of various decision alternatives for the intuitive olution to complex operating problems. RECEIVED for review April 25, 1958 July 29, 1958 ACCEPTED VOL. 50, NO. 11
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NOVEMBER 1958
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