This article outlines a pattern followed in organizing the development of a group of related chemicals, whose commercial acceptance and sales potential finally justified an expansion of plasticizer facilities. D. D. Hecht is manager of the product development department in Celanese’s Chemical Division; S. B. Smith i s director of sales development and B. Barnes, director of market research, both in that department.
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The project discussed has successfully progressed through several phases of a development program. Many ideas, originating either from research laboratories or as requests from the field, bog down when they do not stand the test described here-for example, some products may not show enough profliability to justify expansion. Certain fundamental steps are necessary to the successful development of new chemicals. The w a y these steps are organized and carried out helps to determine the success of a project. The methods described here could be the same as those used by other companies, but the case history has some unique features.
Organizing for Development D. D. HECHT, S. B. SMITH, AND W. B. BARNES Celanese Corp. of America, New York, N. Y.
UMEROUS ideas on new plasticizers and functional fluids N have occurred t o Celanese from time t o time. Finally, a number of these ideas, in one package, showed sufficient potential for consideration of their production in a major plant expansion. Since these new product ideas appear to be a logical development in the light of the company’s past history, a brief look a t the historical background, which was a major factor in bringing Celanese t o the decision t o expand activities in the plasticizer field, will be helpful. The earliest production of phosphate plasticizers in the United States was by the Celluloid Co., a manufacturer of nitrocellulose plastics, which came into the Celanese organization in 1927. This company was absorbed into the parent corporation as a separate Celanese division in 1940. The old Celluloid Co. was formed in 1890 by John Wesley Hyatt of the Hyatt Roller Bearing family. Hyatt’s interest in nitrocellulose plastics stemmed from his entry in a contest t o produce a billiard ball from a synthetic material instead of from ivory. His first experiments were carried out with collodion, a solvent solution of nitrocellulose in ether and alcohol, which was used a t that time for adhesive applications. H e found that he could dry collodion, mix it with camphor, chop it up, and remold it with heat t o form a pliable, moldable material. Starting with this product the Celluloid business soon expanded into other products. One application for nitrocellulose was in stiffening men’s detachable collars and, dickies. This was done by dissolving the nitrocellulose in acetone, impregnating i t in cotton, and forming the material by heat. Xumerous complaints, received from prominent businessmen, stated that ashes from cigars were causing small fires around their necks. I n 1904 the Celluloid Co. began a n intensive search for a fire-retardant fluid to make its products safe. Out of this research came triphenyl phosphate, which reduced the flammability of the celluloid. Because of its large captive requirements, the Celluloid Co. then entered into production of this material. When World War I caused the price of phenol t o soar, cresylic acid, available a t low prices, was studied as a substitute for phenol. The work of W. T. Lindsay, chemical director for the Celluloid Co., definitely established the value of tricresyl phos-
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phate as both a plasticizer and a fire retardant in nitrocellulose and in cellulose acetate compositions. His activities covered not only its use but also its production. This, then, was the product which was ready during World War I t o meet the critical situation caused by the rising price of phenol and the increasing shortage of camphor, used as a plasticizer for nitrocellulose in the Celluloid industry in the la,t,ter part of 1918. With the development of the nitrocellulose lacquer industry starting in 1923 tricresyl phosphate was readily adopted as a n effective plasticizer for these lacquers. This became one of the chief outlets for this material. Since the advent of new plastics such as poly( vinyl chloride), cellulose acetate, and others, the use of tricresyl phosphate as a plasticizer has greatly expanded. I n addition to its flame-retardant property, tricresyl phosphate offered the advantages of being odorless and imparting a high degree of transparency t o these plastics. I n recent years tricresyl phosphate has proved useful as a n additive in t h e petroleum industry. Our history in this type of industry provided a suitable background for future expansion. A series of new products could give us a broader foothold in the plasticizer field. As tricresyl phosphate and other phosphate products continued t o grow t o their present stature in the plastics industry, Celanese decided that an expansion of its facilities and product line might be indicated. At this stage of the development i t was necessary to obtain certain factual data, reflecting the company’s background, t o form the basis for a definite decision by management. Many projects are terminated following this first phase, if all information regarding the company’s background in a given field cannot justify expansion. This project survived and moved into Phase 2. Analysis was the next step
There are still other questions t h a t had t o be answered: 1. Is our sales organization set up t o market such new products? 2. Does the market research information show a substantial growth potential for this group of products? 3. I s our process know-how and basic research information adaptable t o new developments in this field?
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A DEVELOPMENT PROGRAM HAS FOUR PHASES.
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Background for decision The stage at which new ideas are evaluated against the company’s background in production, sales, and research, whether they involve expansion into an established field or entry in a new field: Whatever the case, the company’s background will inevitably influence the direction in which expansions are made.
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Analysis Accumulation of facts to confirm and expand on the original judgment of the project
While the many considerations involved in a project of this type are necessarily carried out by several groups, the product development department must coordinate all the various aspects of marketing the new products. Other departments 7%ithin the chemical division will handle the technological aspects, which include process studies, research, and economic evaluations, and they, individually, u 111 submit recommendations with regard to the expansion. The product development department a t Celanese is concerned only with the commercial aspects of this project. This responsibility is shared by four groups TTithin the department-market research, new chemical development, product application laboratory, and commercial development. I n this second phase, the development groups most responsible for developing and considering information on the project are market research and neTv chemical development. Because of our production history, 1-e had existing facilities to produce plasticizer type chemicals. We did not know the future markets for plasticizers and related chemicals. This question had t o be answered by the market research group, a group of statisticians who are also chemical engineers or chemists and whose primary interest is in how chemicals perform and what other people think of those chemicals. They are not onlv interested in how big the market is but also in how good the market is and how tough the competition is. Ansviers to this type of question about future plasticizer markets were obtained through a door-to-door survey among users in the plastics and related industries. The market research study also included a recommendation, made as realistically as possible, on the future price trends of products already on the market and their sales history. In order to establish the price pattern the competitive raw material picture for the contemplated new products was examined. The report also included a correlation of information obtained from the process engineering group and the sales department. Although it is not the responsibility of the product development department to make actual sales estimates on existing products, it took into consideration those figures presented by the sales department and integrated them with the information developed for the new products being considered. One of the attractive factors in this project is the number of neiv products to be manufactured in the new facilities. February 1956
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Decision Presentation of a recommendation with supporting facts for top management’s decision
9 Follow-through The product development department, instrumental in obtaining approval for a program, must, when the decision is made to go ahead, develop sales to the plant’s rated capacity and investigate additional new products which could lead to a further expansion of the newly built plant.
The new chemical developriicnt group is concerned basically with chemical ideas and new products. I t is concerned with the correlat,ion of chemical structure wit,h possible end uses and with production feasibility. This group, made up of organic chemists and research engineers with some plant experience, evaluates new products and processes, serves in an advisory capacity to the research department and process engineering department,, and acts as the outside contact t,hat,provides these two departments with information regarding prospective customers and competitors. Its first st’ep in a new campaign is a comprehensive literature search on the products under consideration; the group attempts to obtain all pertinent information relating to these new products, keeping in mind any patent problems which might occur. In a project such as this, it collaborated with the research and production departments in the development, of new processes. F r o m the technical and economic evaluation department, t,he new chemical development group obtained information on cost and capital investment versus estimated sales volume. I t set up tentative specifications to help guide the study, a step necessary before any realistic research process or economics can be developed. This development project iTas aided by the prior construction of a semiworks unit capable of producing several million pounds per year of various types of products for 1aborat)ory and field evaluation. Proposed processes for nen- products vere studied in the semiworks unit so that information could be given t o the product developnient d e p a r h e n t on product,ion feaFihilitg X P v-ell as economics. llarliet research then entered the picture again t,o examine competition for the group of new products under consideration. This study included developing information on distribution and pricing and was integrated with the sales information obtained on existing products. T o get information on the oonimercial application of these new products, studies were carried out a t the product applica,tion laboratories. What type of laboratory supplies this information? It is radically different from a conventional research or analytical laboratory. In addition to beakers, condensers, and other glass equipment, there is equipment not normally found in a chemical laboratory-calendering mills, all types and sizes of agitators, tumblers and mixers, raw and painted lumber panels,
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automobile fenders, and a spray booth. There is also large scale laboratory equipment, such as resin kettles capable of handling 5 or 10 gallons of experimental formulations. The staff associated with this laboratory is made up of specialists who have a thorough working knowledge of the commercial application of plasticizers and other products involved. I t s recommendations play an important part in the evaluation of the commercial feasibility of the new products. Among its primary functions is the new application of existing products. On completion of market research, new chemical development functions, and application research studies, it was necessary to develop sales for the new products which were to be produced in existing equipment. Normally, the new products would not be available for commercial development a t this point. Because of the prior existence of a semiworks unit, we were able to turn some of the new products over to the sales development group even before the formal request was made for a new plant. At this stage, product development had completed its analysis of the marketability of the new products. In order to prepare a justification for the expansion, a series of meetings was held with the other departments concerned with the project. The research department reported on its completed process studies; process engineering discussed the capital investment; and the economics group commented on the profitability of the project. The sales department reported sales estimates, and the product development group reported on its particular responsibilities. This information was then compiled and included with a plant layout and design in a formal report to top management. This report indicated the volume of sales we expect these products will attain and included a request for capital expenditure. Management made a favorable decision
Few development projects survive Phase 2 with a favorable report on all counts. The announcement by Celanese of the construction of a new plant a t Point Pleasant, W. Va., will bear out the favorable reaction of management to the recommendations made. Management authorized the capital expenditure t o build the new plant. It was now necessary t o select a plant site from several that were under consideration. A decisive factor was the cost of shipping raw materials and final products. A detailed study of the geographical distribution of the market was made. Plant locations were then compared using this information. The choice soon narrowed down t o two locations-one in New Jersey, the location of the present plant, and the second, the site finally chosen, near Point Pleasant, W. Va., on property owned by Celanese. New Jersey was considered because it was the center of the market area for the present products. However, markets for new products, raw material considerations, and shipping facilities dictated the Point Pleasant, W. Va., plant location. The magnitude of this project can be indicated by the fact that the first unit n-illinvolve a multimillion dollar expenditure and will be built on a 412-acre tract. The total personnel to be employed in operating this first unit will be less than 100, but the capital investment per worker will be substantial. A target date of April 1956 was selected for the inauguration of chemical production operations a t this plant. Follow-through determines the real success
The commercial development group plays the major part in this phase in an attempt to aid in reaching the sales volume set as a goal. This group consists of sales-minded chemists and
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chemical engineers who make field contacts and develop end-use information which can be translated in terms of a sale of the product. The first function of the sales development group was to initiate a public announcement of the new products turned over t o them. The announcement first appeared in the form of a press release, followed closely by advertising in the trade magazines and by mailers. Concurrently, some key accounts, as determined by the product application studies, were contacted to get customer evaluations started for known uses. Technical data sheets and product brochures were prepared in anticipation of results from the advertising efforts in progress. These advertising efforts develop interest in new applications not found before in our application studies, and, in addition, they uncover additional prospects interested in known applications. As the inquiries flowed in on these new products, a set procedure was used to handle the various types. Form letters were prepared t o cover inquiries on known applications and to answer the usual questions on quality and details of application. As the inquiries increased, it has been necessary to expand the variety of form letters required t o answer them. The sampling program was set up administratively to allow for a ready check on the status of each request. As sampling is completed, a follow-up program is instituted to check the application results obtained in the customer’s laboratory. This program consists of sending letters of inquiry which are followed by personal visits, where indicated. The sample follow-up program is our method of screening prospective accounts to determine the intensity of interest and need for technical assistance in developing the customer’s application. I n setting up schedules and performance goals, information from other departments must be integrated with the sales development information. An over-all planning committee was organized t o keep all departments functioning a t a rate necessary to meet the plant inauguration date. For the benefit of management, this is being graphically presented on a chart that is brought up to date every week. The progress on each of the functions in which product development has an interest is recorded on a chart which is reviewed periodically and discussed at all planning committee meetings. This chart indicates the goals for each group involved and the progress made to date. It is evident by noting the points on the chart that some functions must be carried out concurrently, whereas some must wait until other functions are completed. It is by this chart that the organization of the activities of each group is guided. It goes without saying that the sales develop ment certainly cannot engage in a complete sales effort until production quantities are available. Along with the commercial development program that is now under way, market research must continue to refine the estimates and guide the commercial development group in assessing any changes that are taking place in the markets. The application laboratories are intensifying their studies to find new uses for the products, many of which were never commercially available before. This information is passed on to both the commercial development group on new products and sales department on existing products. Let us now assume that the production of this plant is all committed. This does not mean that the products will be sold out a t the time the plant goes on stream, but we have good reason to feel that they will be within a short time thereafter. It is then the product development department’s function t o continue t o act a s the eyes and ears of the division in searching for new products and t o work through the same pattern t o develop markets to expand this new installation. R E c E r v E n for review
November 4, 1955.
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ACCEPTEDJanuary 3 , 1956.
Vol. 48, No. 2
