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26S T he chemical industry is changing dramatically, broaden- ing its goals beyond commodities to specialty products. The term “chemical industry” is used rather generally here to encompass those sectors that employ chemical engineers in significant numbers (e.g., chemical, petrochemical and phar- maceutical). Specialty products require that core chemical engineering skills be applied in a different way than for com- modities. The specific skill set required depends sharpl
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  26S T he chemical industry is changing dramatically, broaden-ing its goals beyond commodities to specialty products.The term “ chemical industry ” is used rather generally here toencompass those sectors that employ chemical engineers insigni fi cant numbers ( e.g. , chemical, petrochemical and phar-maceutical).Specialty products require that core chemicalengineering skills be applied in a different way than for com-modities.The speci fi c skill set required depends sharply onthe maturity of the particular product.At present, chemicalengineering skill sets are focused on effecting marginal im-provements to commodities and mature specialty products.Chemical engineers are less well prepared, especially inmindset, to take a leading role in the development and com-mercialization of new, specialty products.There will also be new challenges for chemical engi-neers stemming from the future need for a more sustain-able development of economies.Chemical engineers willhave to develop large-scale technologies and innovativematerials to allow for a better closure of material cycles.In the last 20 years, the chemical industry has under-gone enormous changes.The fi rst group to recognizethese changes was the industrial executives who redirectedtheir companies, making them more efficient and changingtheir business objectives.The second group was studentsin chemical engineering, who saw the jobs they expectedto be given, replaced by interesting, but very different op-tions.The last to recognize the changes was the professorsof chemical engineering, the keepers of the intellectualarchive.In this changed situation, we chemical engineersneed to consider the future of our profession, especially asit is re fl ected in professional education. RECENT HISTORY OF THE CHEMICAL INDUSTRY To begin, we can bene fi t by reviewing the changes thathave shaken the chemical industry.From 1950 to 1970, theindustry enjoyed logarithmic growth.DuPont was the Mi-crosoft of that period, as the chemical industry changed ev-erything from our clothing to our children ’ s toys.In the peri-od from 1970 to 1990, the industry underwent enormousconsolidation.For example, the number of vinyl chloridemanufacturers dropped by 70%, even though production in-creased by 700%.This period was the golden age of com-puter-aided design.Because of such design, the efficientoperation of larger chemical plants was possible.But since about 1990, the chemical industry has entereda third stage.This stage has seen established mainstays ofthe industry, such as Monsanto, Union Carbide and ICI, dis-appear.The period has also been marked by a dramaticchange in the professional lives of chemical engineers.Afterall, whether this period enforces “ downsizing, ”“ rightsizing, ” or “ redundancy, ” it still means that many engineers will be out ofwork at several points during their careers.While this change in the chemical industry has beendramatic, the change in the educational system has beenalmost indiscernible.This is not necessarily bad;at leastone part of our society should provide some intellectualstability.Professors are by nature conservative, in that theyconserve what they are good at doing.After all, one of theirchief responsibilities is the conservation of society ’ s knowl-edge.To epitomize this feeling, the Colleges at the Univer-sity of Cambridge adopted the saying, “ Slow change isgood ...but no change is better. ” Perhaps this is why theuniversity has existed for nearly 800 years.Still, even professors cannot ignore the changes in thechemical industry.As an indication of these changes, con-sider the 20 most highly valued companies in the U.S.,shown in the table.The rank of the companies is based ontheir market capitalization ( CEP  , Feb.2001, pp.69  –  74).Typically, chemical engineering professors have three re-actions to this data.First, they scan the list for any compa-nies whose shares they do not own, presumably as a mea-sure of their own success as investors.Second, they arguethat the ranking is not exact, that current stock prices affectpositioning.Third, they quibble over the classi fi cation of thecompanies.For example, they argue that Procter & Gambleshould really be classi fi ed as a chemical company.This is not the point.The point is that the in fl uence of thechemical industry on society as a whole has eroded enor-mously.The highest ranked chemical company on the list,ExxonMobil, is there only because of merger;had it stayedas two separate companies, it would be lower.One look at Edward L.Cussler, University of Minnesota David W.Savage, DWSavage Consulting LLC  Anton P.J.Middelberg, University of Cambridge Matthias Kind, Universität Karlsruhe Refocusing  Chemical Engineering  To adapt to changes in the industry,chemicalengineers will require achange in mindset,as wellas an enhanced skillset  the future A N  E VOLUTION IN  C HEMICAL  E NGINEERING I CEP  January   2002  27S this table tells us immediately why we have felt out of themainstream in the last 10 years.  We have been. This change in the chemical industry has had a dramaticeffect on the lives of our graduates.In the U.S., chemicalengineering salaries in in fl ation-corrected terms have beenconstant since 1970.This is in contrast with 1950 to 1970,when salaries in the chemical industry rose signi fi cantly inreal terms.We do not mean to belittle the fact that the start-ing salaries for chemical engineers remain high;indeed,they are the envy of many other professions.We do assertthat constant salaries are a mark of a mature industry.The changes in the chemical industry have also changedchemical engineering careers, as shown in Figure 1.This fi gure contrasts the jobs of students three years after gradu-ation.We chose three years after graduation because wethink the fi rst jobs that students take often prove unsatisfac-tory.Only after a few years do they settle down into a morede fi ned career.As you can see, in 1975 the job market forchemical engineers was dominated by those in the com-modity chemical industry;75% of our gradu-ates went to this industry, to companies likeDuPont, Dow, Exxon and Shell.The remain-ing 25% were roughly split into companiesmaking products such as paint, adhesives,and electronics and into those involved inconsulting.In the category of consulting, wehave put not only those engineers who arefull-time consultants, but also any that don ’ t fi t into commodity or the product classi fi ca-tions:educators, government employees,and so on.The contrast of 1975 to 1995 is striking.The employers manufacturing commoditychemicals now hire less than one quarter ofgraduating chemical engineers.Consultinghas grown dramatically, largely becausemany engineering services are now out-sourced.But the truly dramatic change in1995 data is the increase of those involved inproducts.Over 50% of chemical engineers inNorth America appear to work in industrieswith a product orientation.Not yet visible in Figure 1 are changes inthe profession of chemical engineering thatwill be due to the future needs for a more sustainable devel-opment of economies.It is commonly accepted that the pre-sent and future consumption of material will create moreand more global problems of a different kind ( e.g. , famineand poverty).It also is commonly accepted, that the timeframe for the appearance of these problems is uncertain.De fi nitively, in some areas of our planet, the problems canbe seen already now. WHAT THE CHEMICAL INDUSTRY MAKES NOW Today, chemical engineers are concerned with chemicalproducts, as well as with chemical processes.Before we gofurther, we need to re fl ect on the meaning of “ products. ” After all, companies such as ExxonMobil certainly makeproducts like polypropylene, and these products have enor-mous commercial value.When we describe changes inchemical engineering employment, we have used the cate-gories of “ commodities ” and “ products ” without careful de fi -nition.To make these categories more meaningful, we needto de fi ne them more accurately and describe the differentengineering that they imply.We can do this by answeringthree questions:How much is made?, What equipment isused?, and Which producer makes the most money? Commodity products  1.How much is made? Commodities are normally madein quantities greater than 10,000 tons/yr.2.What equipment is used? Commodities are typically 1975 ProductsCommoditiesCommoditiesConsultingConsulting 1995 Products  Table. The Largest U.S. Companies in 1979 and 1999. *   1979Capitalization,1999Capitalization,RankCompany $ BillionsRankCompany $ Billions  1.IBM37.61.Microsoft601.0 2.AT&T36.62.GE507.2  3.Exxon24.2 3.Cisco355.1 4.General Motors14.54.Wal-Mart307.9  5.Schlumberger11.95.ExxonMobil278.7 6.Amoco11.8 6.Intel275.0  7.Mobil11.7 7.Lucent228.7 8.GE11.58.AT&T226.7  9.Sohio10.8 9.IBM196.6 10.Chevron9.6 10.Citigroup187.5 11.Atlantic Richfield9.3 11.America Online169.5 12.Texaco7.8 12.AIG167.4 13.Eastman Kodak7.8 13.Oracle159.5 14.Phillips Petroleum7.4 14.Home Depot158.2 15.Gulf Oil6.815.Merck157.1 16.Procter & Gamble6.116.MCI Worldcom149.3 17.Getty Oil6.1 17.Procter & Gamble144.2 18.3M5.9 18.Coca-Cola143.9 19.DuPont5.8 19.Dell Computer130.1 20.Dow Chemical5.820.Bristol-Myers Squibb127.3 *Data for this table was excerpted from Prepare for a Different Future by Calvin Cobb ( CEP  , Feb. 2001, pp. 69  –  74).Note: Bolded items indicate the company has a major presence in the chemical industry. Figure 1. Careers in 1975 vs.1995.  28S made in dedicated equipment that is operated continuously.3.Which producer makes the most money? As a gener-al rule, the one with the lowest manufacturing cost will bethe most pro fi table.The choice of 10,000 tons/yr is the rough consensus ofthose in the chemical industry.Many of these commoditychemicals are made from petroleum, and they provide mostof the examples in the current chemical engineering under-graduate curriculum.Although some inorganics are men-tioned, usually in discussions of stoichiometry, the vast bulkare petrochemicals ( e.g. , ethylene and vinyl chloride).Since about 1970, these commodity organics are almostalways made in large chemical plants dedicated to making asingle product.The reason is that the cost of a chemicalplant is roughly proportional to the two-thirds power of its ca-pacity.Although the reasons for this proportionality are com-plex, we can rationalize it by saying that the plant cost is pro-portional to the amount of steel needed, which is roughlyproportional to the equipment ’ s surface area, which is pro-portional to the two-thirds power of the equipment ’ s volume.Thus, if we want to make commodity chemicals, we mustbe prepared for a huge capital investment.This is why thecapital investment per employee is larger in commoditychemicals than in any other industry.It is also why we areforced to operate continuously.We cannot afford to everhave so much expensive equipment sitting idle.Most chemical commodities have been made for decadesusing mature technology.Moreover, the commodities arechemically well de fi ned.For example, there is no differencebetween propylene made by ExxonMobil or by Celanese;there is no difference between urea made by W.R.Grace orby Cargill.These markets are highly competitive.As a result, the large, dedicated chemical plants must berun efficiently to make a pro fi t.This is why process optimiza-tion and computer control have been so important to thecommodity chemical business.Because commodities usemature technology in a huge, but competitive market, wehave limited options for growth.No wonder that small incre-mental advantages discovered with computers has been soimportant. Specialty products  1.How much is made? Most specialties are made inquantities less than 10 tons/yr.2.What equipment is used? Specialty chemicals tend tobe made in standard equipment.3.Which producer makes the most money? The compa-ny that fi rst markets the product tends to get 70% of thetotal sales.The small amounts of specialty products made usuallyimply manufacture in batch processes, not continuous ones.These batch processes often will not run 24 h/d, and rarelyrun all year.Instead, production is usually in “ campaigns ” inwhich the product is made for a few weeks and then storedas inventory.In extreme cases, as in the drug industry, theinventory may never exceed a few hundred grams.When theinventory gets small, another campaign is started.These small amounts are produced in standard equip-ment that is used for several different products.In the phar-maceutical industry, we fi nd the equipment used for asmany as 20 different products.The equipment is often agaggle of stainless steel reactors, stills, extractors, and, im-portantly, holding tanks.These are not optimized for anyone speci fi c product.Instead they are designed for fl exibilityfor many different chemistries.The standard equipment is often operated in ways thatclosely imitate the srcinal product-discovery experiments inthe laboratory.The reactors tend to be large-scale analogsof round-bottom fl asks.Reagents are added to the fl ask andthe reaction is often carried out in liquid solution.Then,other solvents are added, for example, to precipitate the re-action product.The remaining solution is decanted, differentsolvents are added to redissolve the product, and newreagents are metered in to start a different reaction.Thus, inspecialty manufacture, different reactions do not use severaldifferent reactors, but rather one pot.Many engineers react with horror when they fi rst seethese specialty syntheses.They immediately see ways tomake “ process improvements ” like getting faster conversionsor using less carcinogenic solvents.These changes arerarely welcomed because these complex reactions may bedifficult to control.When the process is working, those in pro-duction are always suspicious of any “ improvements. ” Chemical engineers must therefore be involved at theearly stages of product and process de fi nition;improve-ments must be effected before the process is working.How-ever, the chemical engineers thus engaged must recognizethat the basis of competitive advantage is different in spe-cialty product manufacture;speed, not cost, is often thedominant driver of competitive advantage.While this haste invariably leads to waste, inefficiency inmanufacture can be tolerated in a way that would simply notbe acceptable for commodity manufacture.Haste ensures alarger market share is secured.Moreover, specialty chemi-cals have much higher pro fi t margins, hundreds of percentvs.ten percent for commodities.This underlines the needfor speed.The differences between specialties and com-modities mean that engineering skills must be applied in adifferent manner, that additional skills must be provided,and that a different mindset must be adopted.Clearly, theprovision of additional skills mandates removal of some ex-isting content from chemical engineering courses.The po-larization of competitive advantage into either speed or costsuggests that different streams of chemical engineeringmay be required. the future A N  E VOLUTION IN  C HEMICAL  E NGINEERING I CEP  January   2002  29S DIFFERENT PRODUCTS REQUIRE DIFFERENT SKILLS In this situation, we need to ask which chemical engineer-ing skills will be required by the chemical industry in the fu-ture.One way to fi nd out is to use familiar S-curves, like thatshown in Figure 2.In such an S-curve, we plot the societalgain of a product vs.the product maturity.By “ societal gain, ” we mean not only the pro fi ts earned by the company, butalso the improved well-being of the population as a whole.As Figure 2 shows, the amount of gain depends dramat-ically on the product ’ s maturity.When a product is com-pletely immature, we must make an enormous effort foreven a small gain for society.When a product is becomingmature, we can have enormous gain with a relatively smalleffort.When a product becomes more completely mature,the gain is again limited, even though the business oppor-tunities may be substantial.These three different maturitieswere vividly represented by studies on three different prod-ucts:the drug Premarin, the drug Celebrex and materialsfor tissue scaffolding.We begin our comparison with Premarin, which is an ex-tract of pregnant mares ’ urine taken to alleviate the symp-toms of menopause.The process for making Premarin,which is described in patents that expired over 20 yearsago, involves the familiar sequence used for making somany drugs from biological feedstocks.This four-step pro-cess begins with removal of insolubles, usually by fi ltration.It continues with an isolation step, which aims at concentrat-ing the active components of the biological feedstock;thisstep depends on liquid-liquid extraction.The third step, pu-ri fi cation, often involves adsorption, though in the case ofPremarin, this older process uses solvent washing.Finally,the process involves some sort of polishing, like crystalliza-tion, or in this case simply drying.Such a process depends on unit operations that are thecommon knowledge of any quali fi ed chemical engineer.Theproduction of Premarin is not limited by unknown chemicalengineering, and its success depends on the efficient andinexpensive preparation of the extract.The development of the new drug, Celebrex, an anti-arthritis medication, also uses standard chemical engineer-ing techniques, but in ways that stress speed, not efficiency.After all, each day that can be saved in the development, isworth $5 million in sales.The challenge of Celebrex tochemical engineering is fi rst to make enough drugs for clini-cal trials, and second to extend that preparation for com-mercial sales.Moreover, the Food and Drug Administrationinsists that the process used to make the drug for the trialsnot be signi fi cantly altered to make the drug for commercialsales.This means that there is a regulatory caution againstlater chemical engineering development.The third example given in Figure 2 is the developmentof a new material to facilitate the growth of new human tis-sue.Such “ tissue scaffolding ” might be applied to burns toallow the growth of new fl esh.It might permit the growth of anew liver to replace one that is not functioning well.After thenew tissue grows, the tissue scaffolding should slowlyerode, leaving regenerated fl esh.The skills required to de-velop such materials are not yet clear, though they will de-pend on both biochemistry and polymer science. SKILLS AVAILABLE NOW We can now consider what skills are readily available tochemists and chemical engineers on the same criteria.These criteria are conveniently represented by another S-curve, this time, plotting intellectual maturity versus intellec-tual gain.When ideas are new and immature, we need anenormous effort even for a small amount of intellectual gain.When the ideas are developing quickly as they are currentlyfor computer software, we can get a major intellectual gainfor modest effort.As these ideas mature, we will again needa major intellectual effort for modest intellectual gain.The basic ideas of chemical engineering are plotted onthese axes in Figure 3.These ideas include reaction engi-neering and unit operations, ideas that now are mature andso require considerable effort for small gain.These ideasare most appropriate for a generic drug like Premarin andleast appropriate for a new product like tissue scaffolding.The ideas are useful for a new drug like Celebrex to the ex-tent that they permit rapid development.The fact that so many of our chemical engineering ideasrepresent mature products is, of course, a sensible legacyof our srcins in a process industry.It is not bad that this istrue.After all, to serve an industry based on commoditymaterials, we are going to need the detailed understandingthat the subjects shown in Figure 3 represent.For the tradi-tional commodity chemical industry, we are in good shape.But if this industry continues to expand, we chemical engi-neers may be at risk for the future.We currently do not Figure 2. An example of three products of different maturity.GenericPremarinTissueScaffolding    S  o  c   i  e   t  a   l   G  a   i  n Product Maturity Celebrex
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