Surplus Chemicals, Sustainability and Paradigm Changes

New Life Chemical

 

 

Surplus Chemicals, Sustainability and Paradigm Changes

In Zen And The Art Of Motorcycle Maintenance, Robert Pirsig describes “the old South Indian Monkey Trap”. It is a great metaphor for how our human nature will resist change by clinging to something that will keep us trapped in the status quo, or worse, fatally trapped in our circumstances.  The trap “consists of a hollowed-out coconut, chained to a stake. The coconut has some rice inside which can be grabbed through a small hole”. The monkey’s hand fits through the hole, but his clenched fist, full of rice, can’t fit back out. “The monkey is suddenly trapped.” But not by anything physical. The monkey is trapped by an idea, unable to see that a principle that served him well – “when you see rice, hold on tight!” – has become lethal.  It is his very greed to hold onto the rice that prevents his freedom.

Organizationally this manifests itself with the adage, “we have always done it that way;” and “why fix what isn’t broken.”  As a young man I often heard the story of a company that was the last buggy whip manufacturer ever.  The story came from Theodore Levitt, a Harvard Business School professor.  He wrote about the plight of the buggy whip manufacturer in a Harvard Business Review article, “Marketing Myopia”; hundreds of thousands of reprints have been sold. In the article, Mr. Levitt said that businesses should concentrate on their customers’ needs, not on specific products.  Buggy whip manufacturers should not consider that they make the very best buggy whips of all time, but rather on the idea that they are in the “personal transportation business, providing a stimulant or catalyst to an energy source.”  By changing perspective, instead of being in a dying market and being the last buggy whip manufacturer standing, they may innovate and evolve.  More simply, Black and Decker might consider that they are not in the business of manufacturing and selling drills but rather in “providing holes where customers want them.”  Customers don’t necessarily want a drill, they want a hole.  The difference of perspective spurs innovations such as the handheld, cordless drill, providing a hole in a much more convenient way than a corded drill and eventually to an entire series of battery operated, handheld tools.   It may be food for thought to reconsider your business from a different perspective.  What is your monkey trap and what business are you in, what do your customers need?

New Life Chemical & Equipment, Inc. operates in the surplus chemical business.  The paradigm change that we face exists on both the buying and the selling side of our business transactions.  On the buying side, our suppliers are typically large chemical plants that have a standard operating procedure for off-grade, over-aged or surplus chemicals and often their first reaction is to dispose of this surplus through a chemical waste handler.  It is what they have always done.  This is an automatic response that guarantees not only the loss of the sunk cost and any value of the surplus chemical itself, but also ensures the additional expense of disposal costs.  Our job is to disrupt this cycle and to help the supplier move their product quickly and in an environmentally safe and sustainable manner.  We help manufacturer’s recover a portion of their working capital, their valuable tank or warehouse space, and eliminate disposal costs.  The monkey trap in surplus chemicals has the decision maker clinging to the idea of full market value or full material cost for the product in its prime state; not recognizing the imminent loss and additional costs of disposal or even rework.  A way to think of it is like that half of a sandwich you bring home from the restaurant in the doggie bag. You don’t want to throw it away and be wasteful, so, you bring it home and let it sit in the refrigerator for several days until you feel comfortable throwing it away, having lost its value to anyone.  Except in this case, you don’t have to pay even more money to throw it away like you do a surplus chemical.  Our option provides a sustainable alternative that minimizes disruption to operations and incurring additional costs.

Our next job is to place the surplus chemical back into the market with a buyer, somewhere in the world.  These chemicals are still useful chemistry, perhaps they just don’t fit the manufacturer’s original specification or shelf life that the brand strategy or ISO certification, or even accounting policy requires.  Maybe they are simply surplus, prime chemicals left over from a lost customer, a formulation change or a plant shutdown.  The protection of the brand equity, built up over time, discourages these products from being sold under the manufacturers brand guarantee.  New Life can market the product as a generic chemical and work with the potential buyers to formulate the product into their end use.  This placement does not interfere with the manufacturer’s strategic market since every transaction is unique and not simply plugging a product into a formulation.  Most of our buyers are small to medium sized companies with the flexibility to reformulate to a “one-off,” unique opportunity for cost savings.

New Life Chemical is not just in the surplus chemical business.  We are in the business of helping our suppliers meet their business strategic goals through sustainability initiatives such as waste minimization and eliminating environmental disposal risk and disposal costs.  We are in the business of helping our buyers creatively formulate with generic chemicals available to them at an excellent value.  We give “New Life” to chemicals that otherwise would be disposed of in our environment as un-useful waste.  We have been “green” since before being green was cool!

1 Comment

  1. Well articulated. From one broker to another. -Ron Helmick

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