Total Table of Content
A04L01 Looking for a Job
A04L02 My
First Job
A04L03 My
First Position
A04L04 A
Change In Position
A04L05 A
New Position
A04L06 Words
A04L07 A
Career Change
A04L08 I
Was Witness
A04L09 It Takes Time To Create
A04L10 My First Acquisition Committe
A04L11 Assistant to the President
A04L12 Social Hour
A04L13 Test Results
A04L14 Come In and Shut the Door
A04L15 A Different Atmosphere
A04L16 Simple Requests
A04L17 The First Method
A04L18 The Veep
A04L19 Report Writer
A04L20 Citron
A04L21 Personnel Manager
A04L22 Acquisitions
A04L23 IBM
A04L24 APCO
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Content
After I rested from my drive home from
Ft Carson I looked for work. I found two part time jobs for spending
money and went to the MSU placement office when I had free time which
was usually on Friday afternoon about 1. The three companies that I
had interviews with before I went into the service were not accepting
applications when I returned and I did not see anything at the
placement office that interested me. The third week in June I worked
longer than usual and did not get to the placement office until 4 and
there was a small card on the bulletin board saying that Leonard
Refineries wanted chemist.
For some reason it interested me and I
took the card to the receptionist. She said he had been there all
week and no one had signed up for an interview and had left about an
hour before. She said let me call him and see if he is back at his
office. He was and when she told him there was a qualified individual
asking about his opening. He said can he meet me in Alma at six? She
asked me if I could, I said there was enough time for me to do
so. She relayed where I was to meet him, I thanked her and left. I
drove home as fast as I could showered, changed into my suit and left
to meet the manager of the refineries at the best restaurant in Alma.
I arrived a little before six. He met
me at the door, asked some questions as we walked to a table. While
we were eating he asked me if I would like to learn about the oil
business. I said yes. Then he began to think out loud as where he
wanted me to start. He thought I should start at Alma and then move
to Mt Pleasant after two weeks. I said I would prefer to start at Mt
Pleasant, he said can you start on Monday and I said yes. The pay was
very good $4,500 a year, it was almost double the pay of any of the
other openings I had looked at.
So on Saturday I called my two part
time jobs and told them I had a full time job. I drove to Mt Pleasant
and to the library to read the newspapers for an apartment. The
college was on vacation so I found several and went to the one that
sounded the best. At ten I made a deposit and received a key,
returned home, gathered my belongings and returned to Mt Pleasant and
settled in. Only a five minute drive to the refinery. I could hardly
believe my good fortune.
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My first day on the job, the refinery
manager asked me to learn the yields clerk's job. It will be the
fastest way for me to learn about the refinery and he needed someone
to fill in when the clerk went on vacation the following week.
He
was correct, it was the fastest way to learn about the refinery and I
never forgot, but that was not the most important thing I
learned.
During coffee break time, once in the morning and once in
the afternoon and during the idle time after finishing the yields, I
would go to the lunch room and listen to the production people
talk.
After learning some of their vocabulary, I asked questions.
Upon their learning that I was interested in what they were doing
they were glad to tell me their story. If they were in their offices
they had work to do, if they were in the lunch room I was free to
join them and I could go into the map room at any time.
From the
doorway into the map room I could see a floor to ceiling 6 ft wide
map of lower MI. From Gaylord south the map appeared to be gray. I
read the legend, white headed pins were dry holes, black were shut in
wells which meant that some oil was found, but not enough to pump or
they were old wells that stopped producing, green pins were oil
wells, blue pins were gas wells, and red pins were both. White pins
were every where, then some black, I had to look for the other
colors.
But the graph on the opposite wall was more important. It
was a plot of company owned well production from '36 to the present.
It rose rapidly to '47 and declined steadily after. Below each year
was the number of new wells brought in. From '55 to '60 zero.
About four years later CFP bought
controlling interest in our company and merged it with a Canadian
production company that they had bought previously and changed the
name to Total Petroleum North America. The literal interpretation was
'company French petroleum', but no one used the French name, only
CFP. They were the seventh largest oil company in the world at that
time. CFP had their brand name Total all around the world except for
North America and the new company was to be the vehicle for their
expansion in North America.
The production people were hopeful
that the change would help them because if something did not change
they knew they would be out of work. Ten years later they were.
The
production people were very disappointed to learn that the Canadian
company's record was no better than theirs and that they would not
get any help from CFP. CFP took on a new meaning 'Can't Find
Petroleum'. CFP's proven reserves kept increasing each year, but
their production was declining.
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At the end of the first two weeks the
refinery manager moved me to the control lab as a process control
chemist. The tasks of a process control chemist are very routine.
Each morning all of the samples that needed to be tested were waiting
for me on a lab bench in the room where I did most of my work. The
previous chemists had created a three ring binder with the details of
all the tests.
I watched the chemist who was leaving to be the
product control chemist do the tests that I would do. He showed me
where all the equipment and glassware were stored. At the end of the
day he asked if I had any questions, no. The next day I was on my
own.
Many of the tests had long wait times and there was nothing
to do until the process was complete. The previous chemists had a
schedule that took advantage of the wait time by multi tasking. Their
schedule took about six and a half hours to complete all of the
tests.
Before the end of my second week I thought I could shorten
the time needed and began to change the schedule. By the end of my
third month I could complete all of the tests in three and half
hours.
To fill in the remaining time I read books such as
Operations Research, The Geology of an Oil field, Statistical
Analysis, etc. My reading would have a major impact on my career.
My
room was next to the office of the director of the control lab. The
wall between the two rooms had glass windows so he could see what I
was doing, but he never said anything to me. He knew all of my work
was done because the reports were on his desk.
When I could not
find a book to read, I would walk to the control rooms of the two
units. Each control room had three operators. Each had assigned
duties that they carried out every two hours. The duties did not take
very long to do so they had a lot of spare time in which to talk. I
learned a lot about the refinery during those talks.
About six
months later the the refinery manager began giving me special
projects, one project required the solution of two matrices. It took
me four hours a day for two weeks with a desk top calculator. After I
turned in my report someone said why didn't you use the computer? The
refinery manager made the arrangements so I could use the computer to
check my results. It took the computer less than two minutes and most
of that time was print time. I was happy to see the result which was
nearly the same as mine.
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The product control chemist was asked
to be the director of the control lab in Alma, he accepted and then I
was asked to be the product control chemist which I accepted. I
didn't have as much free time as a product control chemist. Several
months later I was asked to be the director of the control lab in
Alma which I accepted, again I did not have much free time.
Several months later the annual board
of directors meeting was postponed for some reason. It didn't effect
me so I didn't give it much consideration, but when I returned to my
office about 10, there was a note on my desk telling me to call the
president's secretary. I did so. She asked me if I could take someone
on a refinery tour, I said yes and she asked me if I could come to
her office to pick him up and she would fill me in.
One of the board members from France
had brought his college age son and didn't tell anyone until they
arrived so no arrangements had been made for the son. All of our
drivers were transporting the VIP's and management to the board
meeting which left no one to transport the son. She told me that she
would make arrangements for someone to pick him up at the lab for
lunch.
He was knowledgeable about refineries
which made the tour enjoyable because he understood what I was saying
so I did not have explain the terms I used. He displayed surprise
when the men greeted me by name and I responded in kind. When the
tour was complete he asked to see the inside of a control room, which
was not normally done. But considering who he was I did. Again the
men greeted me by name and they answered his questions without
hesitation. When they could not answer his question they would nod
their heads toward me and I would answer his question.
As we walked back to the lab he said
the atmosphere was so informal, so much different than France. We
returned to the lab and I put on my white lab coat and gave him one.
I said we do this just in case. I then gave him a tour of our three
labs. After which we returned to my office and he continued to ask
questions.
When noon came no driver came so we
went to the parking lot to see if he was there, no luck. We returned
to my office, I called the secretary's office, no answer. I called
the switch board and the operator told me that everyone had left for
lunch. So there I was with a VIP's son with very little money and no
credit card and no way get any money because it was common practice
for all refinery employees not to bring valuables into the refinery.
So I asked him if he had any money, no
his father handled all of their finances. I was left with only one
other option, I asked if he would like to go home with me and have
lunch. He said yes without hesitation. I called my wife and told her
I was bringing a guest. I told him lunch would not be fancy we were
having peanut butter and jelly sandwiches and tomato soup. He said he
was hungry.
When we arrived, the children ran to
greet me 'daddy daddy'. The son hesitated to get out of the car
because our collie dog was standing next to the door. I told the
children that I had a quest and we went around the car. I told the
dog we had a friend and he move away from the door. When he got out
the children greeted him, shook his hand, and told him their names
and ages. I told the dog we had a visitor and he came over and sat
down in front of him and lifted his paw. He shook the dog's paw and
petted his head. When he stopped the dog moved away, the children
took his hands and led him into our home and introduced him to my
wife who was feeding the youngest who was in a high chair.
Then the children led him in to the
play room to show him their newest books and games. Shortly, my wife
said lunch is ready. The children took him to a chair and one sat on
each side of him. My wife set a large platter of peanut butter and
jelly sandwiches cut into triangles in front of him and said help
yourself. He took two. The children took one at a time and ate them
with gusto, they were their favorite sandwich. My wife told him he
did not have to eat any more than he wanted because any left would be
eaten at snack time.
Next came large bowels of soup, again
their favorite. They emptied their bowels very quickly, so did he.
Then my wife brought home canned peaches, the next best thing to
fresh. When the children finished theirs, 'mommy can we have
another'. So she got another jar and gave each another half peach, he
asked if he could have two more. Following lunch we left with the
usual fan fare. I took him to the secretary's office and said good
by. He thanked me for an enjoyable morning.
Can you imagine how
fast the grape vine spread the word about how I fed the son of one of
the richest men in France peanut butter and jelly sandwiches! By the
next day it was all over Alma.
A week later I receive a letter
written in French. I took it the president's secretary who majored in
French in college. She read it for me. He apologized for writing in
French, but he did not write well in English. Your children were
beautiful and well behaved. But what he enjoyed the most was having
lunch with an American family that behaved without any pretenses. He
returned two more times and each time he made a point of finding me
and saying hello.
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Several months later I was asked to be
the customer service chemist. During the two years that I was a
customer service chemist I had a lot of free time. I can recall only
two customer service requests. I did not have very many, but I know I
had more than two. One request was a problem with a snowmobile and
the other was for help with a pipeline leak at a bulk plant. I worked
on two additional oil leaks. I conducted refinery tours and odor
tests and wrote a thirty page report on storage losses. To keep me
busy the Labs manager found projects for me to do and offered my
services to anyone with a problem.
The snowmobile customer service
request exposed a crook and after the vice president of marketing
read my report his actions gave me an unintended benefit. The home
office marketing department made all arrangements. If the driving
distance was one hour or less, a company car would be assigned to me.
If longer they would arrange a company plane to fly me to the nearest
air port and the marketing representative would meet me at the air
port. That is what happened in this case.
The rep drove to the jobbers office and
picked him up and then drove to a small snowmobile sales and service.
As soon as we entered the owner began to bad mouth our product. He
kept on talking as he led us into the service area. He stopped at one
end of long work table. The jobber moved to his left and the rep to
his right.
The parts of the engine were laid out
on the table and on the far end was the fuel tank. I did not examine
the parts, I walked directly to the fuel tank, removed the cap, took
a flash light from my pocket. As I expected the mechanic had drained
the tank before he removed it, but I could see some fuel left in the
tank. I removed a sample bottle from its transport case, removed the
cap, took a funnel from another bench, placed it in the mouth of the
bottle, and told the mechanic to lift and tilt the tank so I could
have what was left. He complied. There was more than enough for a
test. As he set the tank on the table, I told him to hand me a rag.
He complied. There was some fuel and grease on the fuel tank cap and
I wanted to remove it from my hand. I handed the rag back to him and
told him to wipe his hands. Again he complied. I put the sample
bottle back in its transport case and as I fastened the cover I asked
the mechanic 'How many mills had been removed from the head.' Again
he complied, five.
I turned my face to look at the jobber and when
our eyes met I knew he understood. Everyone in the room except for
the rep understood.
I can not remember what happened after
I made eye contact. The only thing I can remember was that very
quickly we were driving back to the jobbers office. The rep went with
him into his office, said a brief good bye, and returned to his car.
I could see that he was talking to himself and as he entered the car
he said, 'That was odd'. When we were back on the road he told me
that the jobber had thanked him for our fast response to his
problem.
I asked 'What was odd?' 'When I told the jobber I would
bring him a formal report he told me not to bother.'
He paused and then said what happened?
What did you see? I told him the following. From the time I got my
drivers license until the end of my second year of college my brother
and I raced our stock cars. We had an old Buick that would pass
anything on the road except a gas station. Then we bought '50 Olds 88
which was an exceptional car, with only 135 horse power no other stock
car could beat us until the '52 models came out. But modified cars
could beat us.
During some races the modified cars
would be a head of us, but then they would suddenly slow down and we
would pass them before we reached the finish line. I saw what had
happened to those engines when my brother helped over haul them.
When
they milled off the heads to gain more power they would use a blend
of gasoline and ether. They followed a blend that other racers used,
but they did not have any way to test the blend for its octane rating
and they did not understand that gasoline from different stations
would not give them the same octane rating when blended.
When we blend gasoline in the refinery
we knew about what the rating of any blend would be from experience,
but the rating would never be above, it would always be below and
then we would adjust.
If the octane rating was below what the
modified engine needed it would 'blow the engine' as the racers would
say. The instant I saw the engine parts on the table I knew what had
happened. The owner had modified the engine to gain advantage in a
race.
The rep was silent for a time and then said 'You are telling
me that he was trying to get the jobber to pay for what he did and
was blaming it on our fuel. 'You got it.' 'Why that crook.'
When the vice president of marketing
saw my report he knew what was missing from the marketing policy. He
called the company attorney and arranged a meeting date. He and five
marketing mangers and the attorney met and in less than an hour they
had their first version. An hour later they had a new addition to the
marketing policy. After making copies he arranged a meeting with the
marketing managers plus all of the marketing representatives.
He
began the meeting by stating the reason for the meeting and then a
marketing manager walked everyone through the policy and emphasized
the new section. Another manager used my report as an example of what
they may encounter. Then another manager answered questions. The
meeting did not take very long, they had a social hour and everyone
left.
I did not learn about the change in the
marketing policy until three years later. I agree with what the vice
president did, the only thing that I would have done different is
that I would have removed my name before making copies so the people
reading the report would not have their attention divided between the
message of the report and my name and what I had done.
That name
recognition lead to an unintended benefit for me. Now almost all of
the marketing people knew my name. When added to the refinery and
office grapevine almost everyone in the company knew my name.
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If you understand the words I am going
to use, fine, but focus on my struggle to find words that would allow
the manager of the labs to understand what I was trying to tell him.
Remember, I had four and half days plus a week end to think of words
to use.
The manager of the labs said he had a project for me. He
began with a five minute talk during which he used 15 words that I
had never heard. He concluded with 'Lets talk tomorrow'. He left the
office and did not return. The labs secretary pointed to a dictionary
on her desk. She had placed a red dot in the margin next to the most
frequently unfamiliar words he used. It was of little help because it
would take me six months to memorize them.
When I returned from lunch there was a
note on my desk asking me to octane rate many different blends of the
six gasoline streams.
'Paul I do not want to do this.' 'Why'
'Because there are to many permutations.' 'Let me think about it.
Lets talk tomorrow.'
'Can you give me an example?' 'Write the
first six letters of the alphabet and space them out. Place A under B
and put B next to it under C, and continue to the end, then put A
under C with B next to it and continue to the end. Then put A under D
with B next to it.' I didn't have to say any more he completed the
triangle and added them up. '15' 'But you asked for blends every 10%
that means I would have to make 150 octane ratings and that does not
include the combinations of three at a time, four at a time, and five
a time.' Let me think about it and lets talk in the morning.'
He left a note that said he was trying
to think of a way to reduce the number of tests.
'Paul, it will
not matter, you have more variables than equations.' 'Let me think
about it and lets talk in the morning'.
'Can you give me an
example.' Yes, the integer solutions to A squared + B squared = C
squared. It is a single equation with three variables. There are many
solutions; the first two are 3,4,5; and 5,12,13 and if you multiply
each number by a whole number each one will be a solution also. This
means that you will not arrive at a single answer you will have
many.' 'Let me think about that, lets talk Monday morning.'
I did
not have a plan except to ask him about his experience before he was
the manager of the labs. 'How many gasoline blends have you made?'
'Many.' From your experience you know that when you make a 50:50
blend of an 80 octane and a 60 octane that you should get a 70 octane
result, but that rarely happens usually the result is lower from
about 65 to 69.5 and if you add one milliliter of lead it may raise
the octane by five numbers, but if you add another milliliter it may
not raise the octane at all. The lead susceptibility is different for
every blend.' 'Hand me my original note.' He put it in the waste
basket.
When he heard the words 'lead susceptibility' he
understood what I had been trying to tell him, more than an octane
number is required to predict the result of any blend. What he was
trying to do was impossible.
This was the second event that
focused my attention on language.
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The request that changed my career came
from a unexpected source, the company economist. She had heard of the
labs manager's offer and asked for help. She told me that she was
trying to find out if an equation she derived would converge quickly.
She had asked the computer department for help, but they did not have
any free time for at least six months. She tried to write a program
in Fortran, but she could not get it to work. She told me that she
would teach me Fortran if I would be willing to help solve her
problem.
I said yes and she arranged for a table near the computer
room so it would be convenient to recompile her program as changes
were made and she would teach me by letting me watch her make the
changes.
After the eighth compile and she still could not get a
compile without an error, I said let me have your program, I will
take it back to my desk and work on it. She agreed.
Before I
returned to my desk I asked the operations manager if I could borrow
a copy of the IBM Fortran manual.
After reading the first fifteen pages I
knew she had never read the entire manual and that she would never be
able to write a program that would solve her problem.
I read the
manual several times before I began to revise her program. In the
last chapter of the manual I saw a list of small programs that could
be called by the compiler, one of which would solve her problem. So I
discarded her problem code and kept the rest of the program and
inserted a call statement with the parameters the program needed to
operate on her equation. When the compiler indicated that the program
was ready to run, I created the job cards and ask the operators to
execute the program. I watched as the printer printed the first ten
terms of her equation. I removed the print out and took it to her.
She was delighted, her equation converged very rapidly. I gave her
the job cards and showed her what to change so she could run the
program again with different data.
When I returned to my desk, the labs
secretary asked me, did you solve her equation? No, an IBM supplied
program did. I did not tell anyone about what I did so she must have
told someone and now the grapevine had spread what had happened to
everyone in the refinery and office. So it did not surprise me, about
a month later, when the refinery manager asked if I would like to
join the lone refinery programmer and help him write programs and
create a mathematical model of the refinery. He started to say take
your time and think it over, but before he finished I said when can I
start. He said right now.
About two months later my original hunch
was confirmed, the logic needed to write a program and symbolic
nature of the programming languages were child's play for my non
verbal brain.
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The inventories manager was explaining
why his crude oil and regular gasoline prediction would come true
when the switch board said he had a return call. He put his phone on
speaker and said, 'Thanks for returning my call, Bill'. 'What's up.'
'A refinery fire at one of our exchange partners will leave us about
100,000 barrels short of regular gasoline at our Eagle terminal
before the refinery is brought back on line and I wondered if you
could supply some of it.' 'I heard about the fire.'
The manager
continued what he was saying to me. After several minutes Bill said,
'If you would be willing to take 10,000 barrels at three day
intervals we can supply the whole amount.' 'Great. When the refinery
comes back on line I will call you to arrange where and when you
would like to have the gasoline returned. They chatted for a few
minutes and said good bye. He told me a few more things and I left.
I
was a witness to the transfer of one million dollars of gasoline with
no contract, not even a hand shake.
When I joined the company it
was 29th of 52 integrated oil companies and there were many more non
integrated. Every oil company belonged to the American Petroleum
Institute and many of their employees were individual members. Many
employees were members of professional organizations. This allowed
many contacts between people in the oil patch which created one of
the largest grapevines in our country. Because the oil companies have
many marketing reps plus pipeline operators, oil field pumpers,
seismic crews, etc. At least one member of the oil patch can be found
almost anywhere in the US.
If anything of significance happens,
everyone in the oil patch will know about it in less than 24 hours.
If beyond our borders about three days.
While the marketing
departments fought like cats and dogs to keep their market share and
no oil company would share their seismic data, everything else was
shared freely and quickly.
Because of the grape vine Bill knew
about the refinery fire before the manager told him, it is also how
we learned about new equipment, software, new ways of doing things,
etc.
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The refining
manager asked why does it take so long to create a
model of the refinery? I wrote:
.....................subject
verb
object
.........................1...........2.........3
sentence
1.....1Ed.......1hit.... 1Ted
sentence 2....1Ted....1went....1
home
Add a new sentence 'Ted had a bloody
nose'
The first two sentences are in matrix format. The words are
the variables and the numbers are the coefficients. To keep the story
smooth the new sentence should be inserted between sentence 1 and
sentence 2. To do this sentence 2 now becomes sentence 3 and every
sentence below would also have to be increased by 1 and because the
new sentence has a adjective the column 'object' would have to be
moved over 1 and all columns to the right of it would have to be
increased by 1.
Only the coefficients are needed to solve
equations in matrix format and because the IBM program only used
numbers, eliminate all words and put a '0' in any blank space.
The
manager did so very quickly.
0.....1 2 3 4
1.... 1 1 0
1
2.....1 1 1 1
3.....1 1 0 1
'This is meaningless.'
'Exactly. So the senior programer created two catalogs in number
order, one for rows and the other for columns and wrote a name for
each and then sorted the names to create an alfa list so he could
find a name quickly and that would give him the row number and the
column number to enter any change in a coefficient. But he realized
that he had to write a small program to do the same thing and also be
able to insert new rows and columns and then print new catalogs so he
would not have to keep rewriting catalogs. We could then create a
model of the refinery, but because we had to update both the model
and the catalogs it tripled the time to create the model.
The Sr called one of his contacts and
told him our problem. The contact said he and everyone he talked to
had the same problem and everyone had stopped and were waiting for
new release from IBM. The large oil companies had written their own
programs, but the programs were to large to be used on small
computers.
We decided to continue because we thought we were
almost done with the first stage of our model. At that point our
model had more than 300 rows and more than 500 columns.
Again, if
you understand the terms I use, fine, but focus on the amount of
detail and the abstractness of the refinery model.
As we continued
to complete the first stage of the model the answers it gave were
nonsense. We knew we had errors, but could not find them. We had no
choice but to print out the entire matrix. We taped 11 1/2 X 14 3/8
computer pages on three walls of the conference room. We started on
the short wall next to windows and taped from the floor up 7 pages
high, 50 rows of numbers per page. Then we used a yard stick to help
us focus our eyes on each line in an attempt find a number that was
not on the main flow from top left to bottom right. We found a few
and corrected them, but it did not correct the problem. Our eyes were
tired and we returned to our desks to plan what we would do the next
day.
The Sr's contact called and said 'this is weird.' 'What is
weird?' 'My next door neighbor returned from a visit out west and
could not wait to tell me what he learned. The cousin of his neighbor
worked for a small paper company and he knew their programer who was
working on a project the same as mine, but he was using a program
called Magen that his brother had wrote. I knew immediately that the
name was a contraction of matrix generator and asked Sr to get a name
and phone number.' Which the Sr wrote down very quickly. After he
hung up, he call the programer and told him what we had heard and
made arrangements to meet with him the next day a 11. He then called
the person in charge of travel arrangements and by the end of the day
we were told to be at the airport at 7.
Because of the time
difference we had enough time to arrive as scheduled. The programer
picked us up at the air port and explained the Magen system on the
way. One look at the reports told us what we needed to know and the
Sr said call your brother and tell him we want to be his second
customer. He did so and handed the phone to the Sr, who listened for
a short time and then said, 'Have an invoice ready because we will be
in NY in two days' and we were.
His brother was the owner of their
company because he paid three of his friends their salaries. He
explained how we were to install Magen on our computer and we
left.
We could now use six letters as well as numbers so our rows
and columns had meaningful names and the program had many features
that allowed us to find our errors and quickly correct them and our
model gave us the answer we were waiting for, it agreed with what our
refinery did.
A little more than two months later the company
called and said they had a updated program that would allow us to use
26 characters and some addition features. The Sr did not want to wait
for the 2000 card box that contained the program to come in the mail
and we were in the air again.
With 26 characters we could name all
of the rows and columns with the names we used in the refinery.
Because of the new features we no longer had to use our catalogs and
two months later we had a working model that included the two
refineries, gasoline blending, inventories at the refineries and all
of our terminals. More than 1200 rows and more than 1500 columns,
i.e., equations and variables. What a difference the Magen program
made.
Because the Sr had called his contact when we returned from
the west, the grape vine told us many things that helped us complete
our model and in addition the Magen company had more than twenty new
customers.
Return to Total Table of Content
L10 My First Acquisition Committee
The refinery manager told me, 'I would
like you to join two engineers to evaluate a refinery that is for
sale. Be at the airport at 8 tomorrow.'
The vice president of the
refinery met us on a dirt road in front of the refinery. He gave a
brief introduction and led us between heat exchangers. They were
close together so we went single file. We had to turn twice before we
reached the first control room, but instead of entering he walked to
fractionating column on the opposite side from the furnaces so the
engineers could hear him.
I did not follow, I entered the control
room, said, 'Hello', there was a delayed response, walked to a
position where I could see the control panel and the engineers
through the window, but out of the way of the operators.
In a
short while a control panel light turned on. I knew that if only one
light turned on without any sound alarm it was a sensor or a flow
meter malfunction. The chief operator nodded toward the Jr, he picked
up a heavy wrench and left. I said 'It is annoying when something
simple is not repaired quickly'. The chief looked at me and after a
brief pause he said 'yes.' Then I heard a loud metal clang, the light
went off. He continued with, 'That flow sensor has been on work order
for two weeks' and the Sr operator said, 'The seal on crude oil pump
has been leaking for more than a month.' The Jr returned and heard
the comments and added, 'A light near the top of the tower has been
out for over a week.'
The Veep was moving, as I left I said, 'You
can call the next control room now' and they laughed.
The same
pattern was followed at every control room, the Veep would walk to a
fractionating column opposite the furnaces and I would walk into the
control room. As I enter the second control room, they greeted me. I
took the same position as before, but I did not have to wait before I
heard the same complaints. As I left I repeated what I said before
and again they laughed. It finally dawned on me why the Veep did not
enter the control rooms, he did not want the operators to hear what
he was telling the engineers.
We were back at the office before
lunch. The advantage of the company planes was obvious. The three of
us were the first acquisition committee.
One engineer said, 'The route we
followed was well planned so heat exchangers blocked our view. We
didn't see a boiler room, a furnace, a pump, nor a valve up
close.'
The other engineer opened a large envelope he received as
we left. It contained a profit and loss statement and a yield report
for the refinery plus a crude oil analysis, but no maintenance
reports.
I said, 'When you are done with them I would like have
them'. He handed them to me and asked, 'What are you going to do.'
'I'm going to put their data into the refinery model to see what
happens and I will give you the report.' 'Let's meet again after we
have the report.'
They took one look at the report. 'This report
tells us not to buy this refinery and it tells us that we should not
visit any refinery until we see this report. Either you or the Sr
should go and gather the data and then we should go unless the model
says we shouldn't'.
Then I told them what the operators told me.
'That confirms our suspicions. We'll make a report to the refining
vice president.'
They told him all of the above, but I did not
learn what they added until three years later. They told him almost
as an after thought, we did not see a maintenance crew or a control
room, but Richard did and talked to the operators and we are willing
to bet that if he had seen a maintenance crew he would have talked to
them as well.
Now I understood why I was a member of every
acquisition committee except for the two service station
acquisitions. I interviewed so many presidents, vice presidents,
managers, etc., even janitors, during the next ten years that the
memories have faded. It is amazing what you can learn about a company
by talking to janitors. I stopped logging installation visits at 50
because additional entries were meaningless.
Return to Total Table of Content
L11 Assistant to the President
At 4:30 on a Friday
the refinery manager told me that the president wanted to talk with
me. The president asked me to be his second assistant because he had
to many projects for one person. For the first two weeks I was to
meet with all the vice presidents and a few managers one at a time
for four hours and they were to tell me what their jobs entailed. His
secretary had schedule in place.
On Monday I met with the vice
president of finance who would retire six months later for health
reasons. When I returned to my desk before lunch, the president said,
'I would like you to attend a learning program sponsored by one of my
professional organizations on communication on Wed. I would leave on
Tue afternoon and return on Thru morning.
The instructor was
excellent and the program would become the basis for my chapter on
communication in my book Thoughts. On Fri I was informed that I would
be on the next acquisition committee and I would leave Mon morning
and return Fri night.
The following week his secretary had me back
on the original schedule, but on Thru he said he would like me to
take some tests in Chicago on the following Monday, but that I would
have to drive because all our planes were transporting VIP's.
I
asked, 'If I have do drive would it me OK if I took my family and
left on Sat instead of Sun.' He said no problem and it would not be
because he would be the one to approve my expense report.
We arrived in Chicago after 7. On
Sunday we followed the same schedule that I did on my first trip to
Chicago. It was a very enjoyable day.
At 8:45 on Monday I told the
receptionist my name. A door opened and a woman signaled me to
follow. We entered a small room, but it was not cramped because only
3 X 6 table and two chairs on opposite sides were in the room.
After
we were seated she handed me a folder and told me to open it and
answer the questions, when she said begin and to close it when she
said stop. I was to write any notes or calculations in the space
beside and beneath the questions. She set a timer and said
begin.
Near noon a tray with a simple meal was set on the table.
We finished in 20 minutes and talked for ten. The tray was removed
and she handed me the next folder.
One test was only 10 minutes
and another was 40, the rest were in between. There were very few
true and false and multiple guess questions.
A little past 4:30 I
walked the two blocks back to the hotel. My family had not returned
and suddenly I was very tired. I put on my PJ's and went to
bed.
Daddy, daddy wake up, mom says if we don't leave soon we will
be in the noon rush before we reach Gary. I took a quick glance at
the clock, I had slept for 14 hours, now I was glad the testing
company insisted that we stay over night. I completed my morning
routine as fast as I could and we left.
On Wed morning his secretary had two
meetings scheduled in an attempt to complete my first project, but it
was not to be. On my desk was a note for me to join the previous
acquisition committee for a final review.
Most potential
acquisitions were the result of a grape vine contact and the person
who made the first contact with a company was the chairman of the
committee and he could chose the members. All communication would
pass through him and he would only talk with the initial contact.
Most committees had between 6 and 8 members. They would evaluate
the initial documents. If they decided they needed additional data,
they would decide who would go to gather the data, interview the
staff, and inspect the assets.
The committee met while I was in
Chicago, they had read my report, and their reports agreed with mine.
Total would buy the company if the data they wanted was favorable.
Since the production department and the inventory department were
short handed they wanted me to go because I would know if the data
they wanted was complete.
Late Monday afternoon a company driver
picked me up at the Tulsa airport, drove to a hotel, and told me he
would be back the next morning at 8:30.
When I checked in I was
handed a large golden key and a room key. It was the only hotel room
where I slept soundly every night. I could not hear the elevator,
TV's from adjacent rooms, conversations in the hallway, no banging
plumbing, not even the heating/air conditioning fan. Nor the traffic
or sirens from the streets below and no banging trash cans.
The
golden key activated a private elevator which only went to the top
floor called the key club. The room was functional, but of quality,
nothing was over done. It contained everything a traveler might
forget, for example, the desk had the usual writing paper, pencils,
and pens, this one had envelopes and stamps.
The house keeper had
hung all of my shirts and my extra suit on wooden hangers and put my
wire ones back in my hanging bag. My extra pair of shoes were shined
and my electric razor was cleaned. My laundry was cleaned, folded
neatly, and placed in a dresser.
Each morning there was a Wall
Street Journal on the floor by my door. On Friday there was a small
table, in addition, upon it was a card, a very beautiful flower in a
tall vase, and a brown paper sack.
I put the sack in the bottom of
my hanging bag, the card in my brief case, put the flower on the desk
with a note, 'Dear house keeper this flower is for you. Thank you for
your excellent service', and checked out.
I knew what was in the sack, what
surprised me was the quality, it was the most expensive Scotch
whiskey. I had sipped it several times in the army and people who
sipped whiskey referred to a whiskey as being smooth, well this
whiskey was the smoothest of the smooth.
I didn't know what to do
with it, I could no longer drink hard liquor. I took it in the brown
paper sack and put it the bottom drawer of my desk behind some unused
file folders.
Total did not buy the company, Total bought the
assets of the company in exchange for assuming all of the company's
debt, they didn't even have enough money to meet their next
payroll.
Total offered to fund their payroll if the president and
vice presidents were terminated without pay. All pension funds would
be transferred to Total's pension fund which meant that everyone
would receive a pension in proportion to the amount already
contributed. In addition, each employee who stayed to complete the
transfer of assets would receive their regular pay in proportion to
the number of days worked, plus a lump sum equal to 9 weeks of their
regular pay for doing so. Their president quickly agreed to the
offer.
Total kept the oil field workers, the marketing reps, and
the product pipeline terminal operators, everyone else was out of
work. Most knew what was going to happen, they were glad for the lump
sum, bankruptcy would leave them with nothing.
Return to Total Table of Content
The day before Thanks Giving,
Christmas, and New Years, the company had a social hour. It began at
noon and lasted until 4:30. All employees were invited. Many
employees stayed home for the holidays, they didn't want to miss the
social hour.
The table in the large conference room would be
covered with food. An open bar was in the small conference room.
Chairs were moved into the halls and the employees sat on desks as
well. Everyone talked with everyone else, even the chairman of the
board. They walked the halls and into the rooms.
When they left,
they could pick up a Turkey, a rib roast, or a ham depending on the
holiday from a truck in the parking lot. Many donated the meat to
their church or other charitable organization.
After several
acquisitions the conference room tables were replaced with desks to
accommodate additional clerks to handle the increase in transactions.
The end of the social hours.
The company also had a summer pick
nick at the Lake Lansing amusement park. Each family received a
ticket for each ride for each child. There was an area with a few
trees next to the roller coaster with many tables, but most employees
brought their own card table and chairs. Most brought their own food,
but some bought hot dogs or Hamburgs at the park. The company
furnished water melons and lemon aid.
Over the years uninvited
politicians came and their numbers increased every other year until a
presidential election year there were so many that the employees left
and that was the end of the pick nicks.
Sadly, the character of
the company was changing.
Return to Total Table of Content
In the middle of a Monday morning I
received a letter from the testing company. The first page was a
cover letter and the second page was the results.
The first column
was the name of the test, next was the number of questions, the
number answered, the per cent answered, and the number of correct
answers.
The three tests on language I had answered 50% with 4, 5,
and 4 errors. Of the rest one was 99% with no errors, two over 80%
and the rest over 75% with the number of errors evenly divided
between one and two errors.
It appeared to me that I had scored
above average and I was surprised that my error rate was so low, I am
error prone.
There should have been a summary page and while I was
trying to decide if I should call or write a letter to the testing
company, my phone rang.
Pack you bags and meet me at the airport
at 4.
I told his secretary that I would return next Monday and the
missing page faded away.
Among the frequent fliers in our company
there was a saying 'If you have time to spare go by air'.
We
rarely had to wait at the company hanger, but we always had to wait
at the ticket counter, the boarding desk, until all the passengers
were seated, then wait in the take off line, and then in the air.
Most of the time our tickets were bought at the last minute so we
seldom had window seats and on the big planes always in the center
aisle.
So I always took at least one biography and two popular
scientific journals, I read the technical ones at home or the office.
I would read the journals during short waits and the books on the
flight. This is why I scored so well on all of the tests except for
language.
When I returned on Monday I completed
my first project by Thursday and then the president said I would like
you to attend a learning program on Incremental cost accounting. The
following Monday I was in the air again. The program was only one day
and I returned on Wed.
I did not learn anything I did not already
know about Incremental cost accounting, but I learned a lot about
absorption cost accounting.
The refinery model only used
Incremental cost accounting. Any attempt to use absorption cost
accounting led to weird answers because of the number of interactions
between the units and different crude oils and the engineers could
not use it,
The production department avoided all cost accounting,
they charged everything to the cost of drilling the well and then
made an estimate of the amount of gasoline consumed by the pumper to
check the well and the truck driver to haul the oil to the gathering
lines plus their wages and the pipeline tariff to transport the oil
to the refinery. If the revenue was one penny more than that cost
they would pump the well until it was equal or at a loss and then
they would shut in the well. They figured that any income above the
operating cost was money that could be used to drill the next
well.
The oil industry does not tell anyone the following: The
cost of even our most costly well was less than 25 cents per barrel.
Even at $3.25 spot price which was the first price I saw, that meant
our company had a huge profit margin which also meant that any
company who did not have production was at a huge competitive
disadvantage and this is one of the reasons so many companies were
for sale.
When I returned to the office on Wed
afternoon, a stack of 26 P&L statements (profit and loss) were on
my desk with a note. I will be back in the office on Mon. We sold
three of these money losing subsidiaries, which three should we sell
next?
I read the first one and it's supporting documents which I
would not read again. They were what they were called, supporting
documents and they did not tell me what I wanted to know.
I read
each of the other 25 and nothing stood out so I reread them, again
nothing. I decided to lay them out on my desk so I could glance at
each one very quickly. There was not enough room on my desk and that
is when I noticed that the other assistant to the president was not
there, his secretary said he has been reassigned to crude oil
purchasing. So I spread the P&L's on his desk as well. As I
scanned each very quickly something did stand out. One of the line
items was 'Allocated HQ expense', the amount was the same on every
statement. That's is strange, each sub was of a different size, that
was a very arbitrary way to allocate an expense.
When nothing else
was apparent, I decided to rearrange them in loss order from least to
most. As I set the last statement down, my eyes were again focused on
HQ expense, then to the bottom line, the loss was smaller than the HQ
expense. That meant that if HQ expense was removed, all the P&L's
would show a profit. I calculated the profit and wrote the number in
ink below the original one.
'Which three should we sell next.'
'None.' No response. 'Why were the subsidiaries created?' 'On the
advice of our external auditors.' 'Did they establish the HQ
allocation?' 'Yes.' 'And no one questioned it?' No response. 'That
was very bad advice. The subs only get a 25% tax loss rebate, it they
were in the company, the company would get a 50% tax loss rebate.'
I
told him what I had done. 'These statements are creative accounting,
they create the illusion of being accurate and any decision based on
them will not be correct. Each sub was contributing to Hq expense,
but not enough to cover the allocation and because they are in low
income areas they will never pay for the cost of the accountants who
create all of the reports and that expense was not included.'
After
a pause he gave me a lecture on absorption cost accounting and made
many illogical statements which led to an argument when I pointed
them out.
I did not understand what he was trying to do when he
repeated the lecture and the arguments many times and did not stop
until noon, ending with 'Explain it to me again tomorrow morning.'
I
argued with him for four hours every day. On Friday he said, 'Explain
it again on Monday morning.'
At 4:30 another phone call. His
secretary said, 'Again?' 'See you a week from Monday.'
When I
returned he gave me another project and never mentioned the profit
and loss statements again. Six months later the subs were brought
back into the company one at a time and he never admitted that he was
wrong and never told me that I was correct. At the next board of
directors meeting I learned that Total had a different external
auditor.
Three months before I was an assistant
to the president, I joined a local investment club which was a member
of the national association which furnished the club with booklets
explaining how to analyze annual reports. Our broker would obtain the
reports for any company who's stock the club would like to buy.
The
national association had a 'golden rule' and the 'dirty dozen'. The
'golden rule' was 'examine the notes very carefully' and the 'dirty
dozen' were explained in great detail. This knowledge served me very
well and I have been active in the market ever since.
During my
first year as assistant to the president, the vice presidents of
production, finance, and refining retired. The president moved the
manager of production under the vice president of refining. The vice
president of refining and the vice president of marketing, both
learned very quickly that if a single person was the acquisition
committee chairman less disruption would result.
If the company
under evaluation was a production company the manager of production
would be the chairman and because he knew me, I would be the other
member of the committee. He would inspect the wells and I would
gather the data he needed at the company office. If it was a refining
company the engineer chose me and a marketing rep to do the initial
interviews and inspection. When the committee chairmen learned that I
could analyze annual reports the total number of people on the
committees was reduced. As a result I was on every committee except
for the two marketing committees that evaluated Best Petroleum of Wis
and Citron oil of Detroit. Total bought both and both had only
service stations.
When I joined Total in '59 there were
22 oil companies in Mt Pleasant, half were privately owned. Five
years later only 8, with 5 privately owned. The cause: wells going
dry.
Most of Total's wells were brought in before '38 and had long
since paid the drilling costs. During the five years above, Total was
shutting in about one well a month which reduced profit dramatically
because of the large difference between the operational cost of
producing a barrel of oil and the spot price. The survival of the
company was at stake.
The major causes for companies to be for
sale was the lack of oil, very poor management, and the refusal by
management to change the structure of the company so spending was
below income. Total would follow three years after I terminated my
employment.
I know my sample is small and very biased to the oil
industry, but contrary to conventional wisdom half of the rich people
I interviewed were stupid and the rest were not very bright. Most had
titles of owner, president, vice president, or manager. Most were
grossly over paid. They didn't know their job. They did not respect
their employees. They could not answer my questions. Greed and
ruthlessness were the common threads. They lied. Almost every annual
report contained 'creative accounting'. I was forced to learn what I
needed to know from their employees.
What made the companies
profitable for Total to acquire was the elimination of their
headquarters. These acquisitions did not create jobs, they eliminated
jobs.
Return to Total Table of Content
At 4 on a Friday, the president asked
me to come in and shut the door. That was the first time his door was
shut since I became his assistant.
'The controller has resigned
and I would like you to be his replacement.' 'I don't think I am
qualified and it would be better for the company to hire a qualified
person.'
It was the first time I had said no to anything I was
asked to do and he paused for a short time.
'What would you like
to do?' 'I would just as soon return to programming.' That is not
what the president had in mind. After several discussions I accepted
the position of Manager of Information Systems and I would report to
the vice president of finance instead of the controller. I never told
him why I did not want the job.
First, one of my best friends was
a CPA and he had shown me what he did and I did not want to work with
numbers that way.
Second, the operations manager had told me he
had pushed the computer manager for more than a year to get him to
eliminate the paper tape reader and install a card reader and key
punch machines and then it took another six months for him to install
the new small removable disc drives. I didn't want that man reporting
to me.
Third, I knew the president didn't like him and I was not
going to fire him, the president would have to do that himself which
he did half a year later.
On Monday morning I boxed up what
little was in my desk including the brown paper sack. I was putting
them in the desk in my new office when the veep called.
He handed
me three sheets of paper, the first one was the budget for the
department. The second one was titled 'Request for a Proposal', he
told me what he wanted on each line. The third was an employee's
annual performance review, again he told me what he wanted on each
line. 'Do you have any questions?' 'No.'
The operations manager
was waiting when I returned. He told me he had submitted a 'Request
for a Proposal' for a small software program, but the veep denied it
because he did not have an answer for a line on the form which asked
for 'months for return on investment'.
One line item on the budget
'Allocation for future projects' had an amount, but no expenditure
for the month nor for YTD. Let's do an experiment. Call the software
company and ask for an invoice, get the accounting code for that
line, code the invoice, and submit it to accounts payable. The
invoice was approved.
The company surprised us, not only did they
send an invoice, but also a small deck of cards to install their
program. On Saturday morning he installed the program and on Monday
morning we had our first report on computer operations. He spent the
rest of the day assigning codes to everyone in the department. On the
next day we had a complete report. It gave us everything we needed to
know about the performance of the computer and every person who
submitted a job to the computer. We could see the effect of any
change we made in a program or a procedure by comparing a before and
after report. This led to a very marked reduction in computer run
time which pleased everyone.
During a causal conversation the Sbill
(service station billing) manager said he had to hire a new employee.
I told him I had two over qualified data entry operators, if he would
like to try them to see if they were compatible, I would keep their
positions open so they could return, on Monday he took the one he had
met. I told her she could return if she was not satisfied.
On Wed
her trainer said 'I would like to quit so I can start packing.' The
manager said 'she's ready already?' 'Yes, we had to learn the key
board and the ten key pad, so she had a big advantage, she learned
the rest very quickly and she had made requests to the programmer.'
'I'll make arrangements.'
The next week when I looked at the
operations report I said to the programer we must show him what has
happened. The programmer was not interested in the number of key
strokes per hour because the Sbill operators did much more than key
data, he was interested in the elapsed time to finish each station
report. They were now doing in 6 and a half hours what they did
before in 7 and a half. When the manager saw the report he stood, you
have got to be kidding me and he looked at the report again. I want a
copy of this report, I said, 'That is your copy'. The programmer said
some times small changes have a very large effect. The news of the
changes she requested quickly spread and it encouraged other clerks
to make suggestions, they didn't need to be a programmer they only
needed to know their own job.
The manager used the operation report
to make sure the changes he made improved his operations. He took the
operators to lunch and thanked them for a job well done. He continued
to take them to lunch every month and he showed them the report so
they could see their performance. This created a feed back loop and
increased job satisfaction.
Three months later he took the other
data entry operator, by doing so he set a precedent. The data entry
position became the entry level job for all clerical employees.
At
the year end budget meeting with the Veep I had doubled the amount
for that line item and the Veep approved the budget without
questions. The operations manager was now free to experiment with any
software or hardware as long as he did not exceed the amount for any
month. What a difference that made.
Return to Total Table of Content
When I accepted the position of Manager
of Information Systems I became a member of the finance group. The
atmosphere in the group was cooperative, but it felt different to me.
The difference was in the refining group everyone spoke the same
language so I didn't have any difficulty in getting them to learn my
language. In the finance group they didn't speak my language and I
didn't speak theirs.
I did have two advantages, name recognition
and the stories on the grape vine.
Many times when I first met
someone in the group it was when I responded to a request for
computer services. They had a favorable opinion of me and would
answer my questions without hesitation and they were willing to learn
some of my vocabulary.
Most of the requests were for simple
changes to the reports they used. I asked them to pencil in what
changes they wanted on their last report and told them that I would
call them and tell them when to submit a request to computer
operations to rerun their report. I returned to my desk with the
report and made the corrections to the program myself.
If I received a request in the morning
they had the revised report on their desk after lunch. I had told
them to call me if they wanted addition changes, if not mark the
request completed and send it to the vice president's secretary. She
handled all the requests.
Because the tasks the non technical
people did were so similar, their requests were very similar. This
similarity reduced my recall time. Occasionally a request would be
different and they were perplexed when I told them I had to think
about their request because I had resolved their previous requests
very quickly. When I explained my limitations they were patient and
waited.
The speed of my recall was a function
of my slow thinking plus the difficulty my brain has in converting my
non verbal thoughts into verbal format.
The brains of most people
convert so rapidly they think they think in verbal format, but the
neurons in our brains communicate via electrical and chemical
signals. These signals are definitely not verbal.
Frequently, when
I resolved a simple request they would make a comment such as 'How
did you do that?' 'I don't know, it's the way my brain works.' They
were referring to the speed with which I located the place in a
program to make changes.
Occasionally someone would ask how the
computer worked, they were surprised when I told them the computer
does not do arithmetic like people do, it uses Boolean algebra for
all of its operations. The logical operators, and, or, not, and many
combinations of them are hard wired into the computer. The end result
would be what we would expect. This usually ended the conversation.
Return to Total Table of Content
I resolved all simple requests, I
didn't want to disrupt the programers because they were working on
major projects. I filed the other requests by my estimate of how long
it would take to resolve the request into three folders, short: one
month, medium: up to three months, and the rest. When a programmer
had time to multi task they would take a request that matched the
time they had available, this insured the programmers were never
idle.
Most people do not understand what is easy to do and what is
difficult to do with computer programs, so most of the people were
very impressed and now I received another benefit. They told the
other people in the group and in the process they spread my
vocabulary which made it easier for me to increase my vocabulary
within the group.
Without being aware, they were becoming systems
analysts and by doing so it would reduce the time to complete larger
projects. They were the best people to do the systems analysis
because they knew all the details of their job, I certainly
didn't.
This did not eliminate all errors, but it surely reduced
them. Best of all it reduced the number of times the programmers
would hear their most hated statement: 'I forgot to tell you ...'.
When a manager refused to learn the
language of the programer the project would proceed in the following
manner. The programer would learn the manager's language, then asked
questions in order to learn what the manager wanted done. Then the
programer would do a systems analysis to try to avoid errors of
omission. Then programming could begin.
Learning a language is a
slow process and when the programer did the systems analysis without
the manager participating, details that the manager would recognize
as missing would not be noticed by the programer resulting in an
error of omission which would lead to the dreaded statement, 'I
forgot to tell you ....' which in turn would cause the programer to
rewrite the programs involved creating additional chances for
error.
A programer can only write some many lines of code each day
so the only way to reduce the time to complete a project was to
reduce the first two steps.
What I was trying to do was quickly
vindicated. When two accountants were willing to learn my language it
help me learn theirs which reduced the time for both of us.
Then I
could teach them about systems analysis and by working together the
time was again reduced.
Then I gave them a preprinted form that
had a rectangle for each character and each line the printer could
print for each size of paper that they could use and told then to lay
out how they wanted their reports to look.
As I learned about
systems analysis it was obvious to me that the reports had to be
defined first and then the systems analysis could proceed and updated
and then programming could begin.
If the reports were not defined
first it would only be by accident that the proper input could be
defined to create the reports. The time saved was large not minutes
or even hours, months.
When the projects for the two accountants
were finished way ahead schedule the others complained the to vice
president, 'Why does it take so long for our projects to be
completed.' Duh.
The financial group had more than 16
accountants and more than 10 of them were managers. Now that does not
sound like very many languages to learn, but when the other groups
are added the number increases. There were 52 different computer
systems from accounts payable to payroll to warehouse. Everyone of
them had at least two people.
Only two out of the 16 accountants
were willing to learn my language. The rest resisted in varying
degrees with two completely unwilling and at times they were more
than rude, they were obnoxious.
One of willing accountants was in
charge of the general ledger and the chart of accounts. He asked if I
would write some programs for him in my spare time.
During the
three months it took to complete his project he learned my language
and I learned his. In addition he taught me accounting. By the end I
knew more about accounting than most of the accountants. But sadly it
did not reduce the resistance.
Talk about on the job training!
When I wrote my first program in '67 there were no classes in
computer science and very few books, so much of what I learned was
learned on the job from other people. When
I wrote my first computer program the software and the hardware was
very limited. We could only use six characters to name the variables
used. This limitation made it very easy to make mistakes and very
difficult to find them. So the programmers tried to find methods to
reduce the possibility of error.
I
am a very error prone person, but all of my work was individual in
nature so the only person who ever knew that I had made an error was
the computer operator who removed the core dump from the printer when
my error caused my program to cancel.
Because every supervisor
except for one, knew I could do the assigned task faster than they
could, the only dead line I ever had to meet was month end and year
end. That allowed me the time to review my work and eliminate my
errors. I only missed one and it was an error of one, but it was the
million part that caught everyone's attention. Because I had the time
to correct my errors, it added to my mystic.
Return to Total Table of Content
The
first method that did reduce errors was called 'Flow diagrams'.
Symbols were used for each type of logic in a program and words for
the variables. The 'Flow diagrams' made it much easier to find errors
in logic and errors in assigning names to the variables.
After
'Flow diagrams' were in use for some time it became obvious that
there was a 'Critical Path' in the 'Flow diagrams' and if they used
the 'Critical Path' the program would run faster. It did not take
much thought to apply the 'Critical Path' to every activity. They
used it for system and programing design.
After
I had used both for some time I realized that engineers and many
other people used them also, but they used different names. With a
little more thought I realized that most people also use these
methods, but did not have a name for them. From cooking, to sewing,
to gardening, to building, etc. All of these activities are more
effective and more efficient if these methods are used.
Most
people do not understand that the politicians and bureaucrats are not
leaders, they are followers. They will only do what the voters want
them to do. This means to me that they are not on the 'Critical Path'
and the only way to change their actions is for us to change what
other people are telling them what to do.
This
is why people need to change their life style because it is at the
top of the 'Critical Path' and it will be much faster to change our
life style because each person can make that choice for themselves,
we don't need to take the time to get a large enough number of people
to change the politicians and bureaucrats actions or any of the other
so called leaders.
The computer room was located between
the parking lot and the accounting room so many people would cut
through the computer room to save time and steps.
The two
obnoxious accountants would sometimes stop and talk in the computer
room and block the operators movement. When asked to leave they would
make snide remarks.
The computer operations manager had submitted
a proposal to have locks installed on the doors many times, but the
vice president would not approve the request for some reason. He even
turned down my request.
What happened next would make the vice
president change his mind and in the process the resistance of the
accountants was reduced.
Return to Total Table of Content
The vice president's flight from NY to
Detroit was delayed by a mechanical failure, but he slept once the
plane was in the air. The company plane was waiting for him and again
he took a nap on the way to Alma. When they flew near Lansing the
pilot could see fog and when they arrived at Alma the fog was so
dense the pilot could not see the runway markers, only a very diffuse
glow of light and he turned to Bay City. The Veep rented a car and
drove home, but the fog increased until he could only drive 20 MPH.
These events resulted in his arrival at Alma to be well after
midnight. After he parked the rental car and walked to his, he
decided to take his brief case to his office. Like the accountants,
he took the short cut through the computer room. The operators did
not see him until he left by the far door because they were engrossed
in a chess game. When he returned to his car he did not cut through
the computer room, he took the long route.
The next morning, as
usual, I checked with the operations manager and he told me what
happened. I checked with data entry manager and she didn't have
anything to say except hi and department receptionist said there is a
note on your desk, the Veep wants to see you immediately.
I went
to my office hung my coat and went to the Veep's office. He said as I
walk through the door, 'Your operators were playing chess last
night'.
I walked right up to his desk and without waiting for his
reply, 'Was the computer running? Were all discs not in use stored in
the vault? Were all tapes not in use hung on the tape rack in the
vault? Were all the reports decollated, burst, and collated? I know
the operators have read all of the manuals so there was no reason to
reread them. We run long jobs at night and when they finish the
routine jobs there is nothing for them to do except to watch the
lights blink on the computer. I can not think of a more mind
deadening thing to do. I don't give a damn what they do to keep
alert, but I don't want them to be brain dead if something happens, I
want them to respond quickly and accurately to prevent a bad
situation from becoming worse. I know that you have read the notes
our external auditors have made about computer room security three
years in a row. You did not approve several request by the operation
manager to put locks on the computer room doors. You did not even
approve my request.'
I turned and walked out of his office.
About
two weeks later a contractor was installing panic bars on the inside
of the three computer doors and a key lock on the outside.
Three
days later the department receptionist could hardly wait to tell me
what she had heard on the grape vine. One day after the doors were
locked one of the obnoxious accountants met with the Veep and the
next day the other one did. Both demanded that the locks be removed,
they were more important than any operator. Nothing happened until on
a Monday morning about two week later, different people were sitting
at their desks.
With the two most resistant accountants gone, the
others were more willing to learn my language. But serendipity would
strike at the next month end and all resistance would disappear.
The best programer in the department
finished a major revision of the billing system and the daily
operation was error free. He returned to the billing department at
month end to see if month end would be the same. He talked to the
clerks and watched what they did and everything seemed to be okay. He
then went to the manager's desk, the manager was busy copying numbers
from a billing report on to a data entry coding sheet. He walk around
behind the manager and continued to watch. When he realized what the
manager was doing he asked, 'What are you doing that for?' 'I'm
coding the supporting data for the journal entries'. 'Stop, I can do
that.' 'No, you can't.' 'Yes, I can.' He took the incomplete coding
sheet from the desk and told the manager to do something else until
he returned. He took the coding sheet to the data entry manager and
asked how many departments submitted this form. She made a list of 26
departments. Next he went the chief operator, he recognized the list
and showed the programer the job cards which had the number of the
program to be executed.
It was a simple program, it selected which
journal entry codes based upon the department the data came from and
printed them followed by the data on the coding sheets. Now he had
everything he needed to print the same report without needing the
coding sheet data because all of the data was stored on the disc. He
copied the code from the simple program and inserted into the billing
program and executed the billing program again. At three he handed
the manager the report he needed without him having to code any
data.
The programer knew what was going to happen so he returned
to his desk and revised a program in another system. He could only do
two a day so he did not complete the task for more than two weeks,
but he was correct about what would happen next. All of the
accountants wanted their programs to do the same thing. As a result
all resistance was eliminated.
The elimination of the coding
sheets did not result in a large reduction in time except for data
entry. But with the accountants now working with the programers each
system was improved. Small amounts of time was saved with each change
and six months later month end was completed one day sooner. For the
accountants and the Veep this was a big deal. Again I got the credit
for what many people did and when I tried to correct the situation, I
received a common response, 'We could not have done it without you.'
Okay.
I have been using 'my language' very
loosely, I had adopted the language of the computer industry, the
'my' came about because many people would tell me that they could not
understand 'my language'.
Return to Total Table of Content
In May following the board of directors
meeting, a partner from the different external auditor made a
presentation about their new financial reporting system, the chairman
of the board, the president, the veep, and everyone who used the
general ledger were present. I sat in the back of the room. The veep
had made the arrangements because he wanted the accountants to be
able to write their own reports, he didn't want to wait for a
programer to write a program, but sadly, after the system was error
free only the accountant in charge of the general ledger used it. He
became the report writer for the financial department.
The day after the presentation the veep
asked me what I thought. I told him we had looked at a data base
report writer, but it was to large for our computer, the presentation
indicated their program would run on our computer, but I would like
to see their program in action. He made the arrangements and the
accountant in charge of the general ledger, the operation manager,
and myself when to an installation that was using their program. We
made a report when we returned. The veep asked if we had any
reservations. The general ledger accountant said we would have to add
report codes to our chart of accounts. The operations manager said,
their computer system had four tape drives and no disc drives, we
have one tape drive and eight disc drives, do they have a program for
disc drives? I said their computer was double the size of our
computer, so I was concerned about the time the program would take on
our computer. Two days later we met again, the veep had called the
partner and he had assured him that our concerns would be met. They
would send two programers to install their program and help us with
the training and installation the first week in June.
Our part of the installation went very
smoothly, the accountants created the report codes and the programer
changed the general ledger program to accept the codes. At month end
the chart of account codes with the new report codes was printed. The
operations manager set up programing codes for the two programers and
showed them how to use them on their job cards so they could start
compiling their programs and catalog them. The two programers changed
their programs to accept our reporting codes, but when they compiled
their programs they could not eliminate the errors found by the
compiler. I helped them correct their programs and they finally had
their programs cataloged, but when they tried to run their programs
they canceled. They were very poor programers, they didn't know how
to take advantage of the Cobol language, their programs were not
logical, and they didn't know how to read a core dump which would
help them find their logic errors, I had to read the core dumps for
them. By October they still did not have all of their programs error
free that is when I received the bad news. They could not get their
report creating program to run. As they told me their problem it was
obvious to me that they never had a disc version, they had planed to
write it at our location and after four months they could not make it
work.
I told them come with me and we walked
into the veeps office and I told them to tell the veep what they told
me. The veep was expressionless as he listened. When they finished I
asked the veep if he wanted me to tell them how to solve their
problem. He said yes. I told them to use a matrix, they did not know
what I meant, so I said use a table, they stood up and said we can do
that and walked out of the room.
By the middle of November they had
their report creating program working and they wanted to make a test
run at month end so they could be ready for year end. We scheduled
their report creating program on the Friday mid night shift so it
could run until Sunday if necessary. The accountant in charge of the
general ledger wanted me to call him when the first report printed. I
told him if no report was printed by mid night Sunday I would
canceled their program and examined the core dump. He was waiting for
me and when I read the report number, he said it is only one quarter
of the way.
On Monday the operations manager found
another computer system that matched ours, but with a faster
computer. Tuesday at 6 PM we arrived with their report creating
program and a disc with the data. The operators compiled their
program and started to run it. We told the operator to put the
program in background because the program was a computer hog. He did
not listen, he put it into fore ground one and it shut their computer
down. He tried to change the program from fore ground one to
background, but it took fifteen minutes before the program came to a
disc write which allowed him to make the change. I had estimated that
it would take four hours on their computer, it took six.
On Wednesday night we put the disc on
our computer and printed the reports. Even the veep knew we could not
run their programs on our computer. I told him to get rid of the two
idiots, I would have our best programer rewrite their report creating
program using assembler code and I would rewrite all of their other
programs so they would run faster. On Friday the two programers left.
We continued to go to the faster
computer until our corrections were ready. At the April month end we
ran all of their revised programs on our computer in less than four
hours. The veep never told me what compensation Total received from
the external auditors for the hours we spent correcting their
programs and they never asked for our revised programs.
Return to Total Table of Content
The president called me and explained
his concern. Citron was a very large Standard oil jobber, he was
afraid we would not covert their credit card holders to Total and the
stations would lose business. He came up with the idea of an instant
credit card for any Standard credit card holder. He showed me the
forms and procedure the operations manager of Total's credit card
system had developed.
'Every thing is well done, I don't see a
problem at Alma, but Detroit may have to many transactions.' 'The
operations manager will be in Detroit the first week to make sure the
procedure is working as intended and I want you to replace him the
second week and the two of you to alternate each week.'
The first
four weeks went very well, the Citron computer people handled the
credit card transactions and the Alma people handled the applications
for a Total credit card. The instant credit card was for 15 days and
was sufficient time to receive a plastic Total credit card.
The fifth week a credit report came
back 'Address invalid'. The manager set the report on the desk and
proceeded with the next batch. To his surprise the next application
had the same Standard Oil credit card number on it with the same
address. He knew the first address was not a mistake and that he had
to publish a second 'Do Not Honor' list for lost and stolen Standard
credit cards.
He went to the president on his return and told him
to stop the instant credit card program, he would not.
On my next
shift the number of invalid addresses increased to the point that we
had to work all day to handle the increased number of applications
that were false and to remove the fraudulent sale tickets from the
regular processing stream.
After the first two weeks the number of
instant credit card transactions fell in proportion to the increase
of Total credit card transactions as customers used their new Total
credit cards. By the seventh week almost all instant credit card
transactions were fraudulent and they followed a pattern of two days
of 120 transactions each day followed by none for four or five days
and then a different Standard credit card would be used.
With the
volume of transactions returning to near normal, the Citron people
were on schedule and the Alma people could do their work in less than
two hours, so the manager had them sort the fraudulent transactions
during idle time.
It appeared that one crook would use a stolen
Standard oil credit card to get an instant credit card and give it to
one of his buddies. At the next station he would give the instant
credit card to another and so on. Each transaction was for two tires
and a battery and gasoline if they need it. Each crook went to
different gas stations and they never went to the same one twice with
the same instant credit card. At noon they traded routes. On the
second day they all used different instant credit cards. Some how
they learned how long before the instant credit card and the stolen
Standard Card numbers would appear on the 'do not honor' list. Each
time we returned to Alma we would tell the president to stop the
program, but he would not listen.
Total had a line of credit with the two
big banks in Detroit and when the president learned that I had free
time during my week in Detroit he arranged a meeting with their
presidents. He had asked for a proposal to process Total's credit
card transactions and to have them show me their operation. One bank
handled VISA, the other Master Card.
The meeting with the
presidents didn't take more than 15 minutes and the manager of their
credit card operations was present and took me to a separate
building. He told me I would not be able to see their programs
because they were proprietary.
After a brief walk through I didn't
need to see their programs. Some one would have to lay awake all
night to think of away to make their systems more inefficient. Both
had two computers ten times the size of Total which were idle most of
the time and I would later learn that the credit card operations were
a separate subsidiary reporting directly to the board of directors
because the manager, systems analysts, and programers were paid more
than the president and vice presidents.
When I returned on Friday,
I handed the proposals to him, he open them and said, 'They only want
50 cents a transaction.' 'You have got to be kidding.' 'Why do you
say that.' 'Our cost is ONLY 9 cents per transaction and that
includes everything, issuing plastic credit cards, debt collection,
bad debts, etc.' I thought his jaw was about to hit the floor. He
like so many people think that bigger is better. I told him again to
stop the instant program and left.
The banks do not care about bad
debts, when their profit margin becomes to low they raise the fees
to the merchants, who in turn raise their prices. So if you do not
use a credit card you are paying for those who do.
When I returned
in the middle of July his office was empty. I had been in transit
when the program was shut down. The chairman of the board had seen
the second quarter report and fired him.
The firing of the president marked the
turning point for Total.
Return to Total Table of Content
I had some questions for the personnel
manager. Then I remembered as I left my office, that the personnel
manager was the only one who sipped whiskey at the social hours. I
returned, retrieved the brown paper sack, hid it behind my leg as I
walked into his office, set it on the floor as I sat in a chair next
to his desk.
He answered my questions and I told him the story of
the golden key and the key club, '....when I opened the door to get
the Wall Street Journal there was a small table with beautiful flower
in a tall vase with a note and a brown paper sack'. I placed it in
the center of his desk.
He knew what was in the sack, but as he
lifted the bottle to see the label his eyes widen, he could not sit
still, he moved from side to side in his chair, he stood and paced
the room back and forth muttering, 'I have been with this company for
more than 35 years and no one, but nobody has ever given me gift and
you gave me the prize'.
He stopped, reversed direction, opened a
file drawer, removed a folder, and placed it upside down in front of
me. 'Open the file and read the last comment.'
My only criticism
of Richard is that if I were to ask him to paint my house he would
paint the scaffolding as well.
When I smiled, he laughed. 'I
always feel that when I do something or answer a question that I have
not done enough or have not said enough. I have to force myself to
stop.' He laughed again. 'Close the file, turn it over, and read the
first three pages'.
The first two pages were the same as I had
received from the testing company. The third page said, 'Mr Riker is
a lone wolf, he would rather solve a problem than ask for help and he
has sufficient brain power to do so, plus he has a very broad
background to apply to any problem he may encounter'.
'That
explains why the president offered me the controllers job'. 'Yes, and
I told him you would not accept, so he had a plan B'.
Then after
some blank space there was a signature and some more blank space
followed by a PS: To put Mr Riker's over all score in perspective,
while his scores on the three tests on language were mediocre at
best, the rest of his scores were so high that his over all score is
the highest we have recorded since we began testing people nine years
ago.
What did it mean?
Many people would
have said, 'Wow!' I would have said, 'Wow' if the testing company had
included a statement saying my score was 91 and the next highest was
81 and all the rest were below 70. But what if the statement said my
score was 91 and all the rest had a score of 90, what opinion would
you have then? Most people do not understand the difficulty of
determining the significance of the result of any measurement.
I
was unhappy that the testing company didn't include some kind of a
summary. I had the highest score compared to what?
I would have
liked to have seen the difference between my score and the next
highest plus the number of people who took the test and the
distribution by age, education level, and occupation, then my score
would have more meaning. Even better if they had added the average,
the mean, the standard deviation, and the number of people at
each score. Then I could have determined how skewed the curve of the
scores was.
Many of the questions asked 'who did this' or 'what
made this person famous'. Such questions indicate broad knowledge but
do not predict future performance they test memory. All of the tests
except for the language tests had many of these question which gave
me an advantage because of the large number of books that I had read,
I could answer very quickly giving me more time to answer additional
questions, this skewed the test in my favor so in the end what did it
mean, for me not very much.
I know the chairman of the board and
the president were impressed because my annual review came about two
weeks after I had received the first two pages from the testing
company. They met me in the hall and one said we like what you are
doing and the other said we want you to join the country club and
handed me my pay envelope.
That meeting was about as close to a
performance review that I ever had or ever would get.
When I
opened the envelope at home, I had received a $200 a month increase
in pay. It was a very large increase at that time. I joined the club
the next Monday.
I played a lot of golf, at my peak my handicap
was 4 on 18. The membership was very handy for me, I could leave
work, be on the course in 5 minutes, play nine holes, and be home for
dinner.
It also served a very useful service. I scheduled an
appreciation dinner following each social hour for all members of the
department and their spouses because the computer would be down the
day after the holiday and everyone could attend. The veep approved my
expense report without question.
After I returned from taking the
baby sitter home our children would often say daddy has been drinking
red pop.
The veep would not let me give the data entry operators
more than a cost of living raise for some reason. He would not
explain. So I arranged for the manager of data entry to take all of
the operators to lunch once a month. The club dinning room always
showed a loss so they treated our department like kings, they needed
the business and again the veep approved my expense report without
question.
Return to Total Table of Content
CFP appointed two Frenchmen, one of
whom was the chairman of the next acquisition committee who would
become the president seven years later. Myself and a marketing rep
were the other members. We were to evaluate some of the properties
that Philips Petroleum wanted sell, on the west coast. It was a
wasted trip, but it took CFP more than a year to say no.
The next acquisition committee
evaluated APCO, a company more than ten times the size of Total. My
report favored the acquisition and Total bought APCO without waiting
for approval from Paris.
APCO had three things that were of
interest to Total, they had producing wells, a 122,000 barrel a day
refinery which was more than five times Total's at 22,000, and many
service stations, from the Mississippi to the Rockies and from Texas
to South Dakota, exactly what CFP wanted, national recognition.
All
of top management and most of their managers were of retirement age,
had been promoted to incompetence, and they could not answer our
questions.
Their president gave us a brief history of the company
which was useful and the vice president of refining had prepared the
data I would need for the refinery model.
APCO borrowed a large
sum to purchase most of the service stations which was not a problem
at the time, but as their wells depleted their cash flow was not
sufficient to pay the debt. Because they sold more gasoline than the
refinery could produce, they had to buy large quantities on the spot
market which reduced the marketing profit margin to almost zero. When
the bloated salaries and expense accounts were not reduced to match
their income they could not pay their debts.
The company was
privately held and the owners were the board of directors and they
were willing to accept any offer that would eliminate their
liability. They were already in default on their long term debt and
could not make their next payroll.
A week later their chairman of
the board force all the incompetents to retire, Total put the rest on
Total's payroll until the transfer of assets was complete and assumed
all of their debt. With the home office expense eliminated the
purchase paid for itself. APCO was the last acquisition committee for
me, all of the small production and refining companies were gone.
Return to Total Table of Content
L23 IBM made an Offer I could not Refuse
The IBM salesman said I have an offer
you can't refuse. He was correct. Our old printer needed repair so
often the repair cost was exceeding the amount IBM allowed and they
wanted to replace it. They offered to replace our old printer with a
faster printer plus a slower printer and up grade our computer to a
360-40 with 128K for $400 a month more than our current contract.
The
operations manager said what will the veep say. Nothing, when he sees
the result. With the faster computer and the additional core I knew
the time to run all of our programs would be reduced. It turned out
much better than I had anticipated because we could now run three
partitions. When a program in one partition was waiting for a disc or
a tape to read or write or for a print command to finish, one of the
other partitions could be executing instructions. In other words the
computer was multi tasking.
The new equipment was installed two
weeks before APCO. Both printers ran constantly from 8 to 6 every day
and all reports were delivered much sooner than before.
Three
months later the salesman returned to make presentations for the new
370 series. IBM followed a very rigid sales plan. The salesman had to
start with their largest computer even though he knew we would not
buy it. He also had to asked me to sign a form saying that I had seen
the presentation and why I would not buy the equipment. Three days
later he gave me the same presentation with only one difference the
computer was the next size down. This continued for three more
presentations. By that time I had had it. He said I know you don't
like it and I don't either, but I have no choice. He even had to wear
dark blue pants, a light blue jacket, a white shirt, and light blue
tie. As he packed up his presentation I said there is no BM like an
IBM. He quickly turned his face to the side and covered the rest of
his face with his hand and did every thing he could to prevent
laughing out loud. When he recovered, he thanked me and said good
bye.
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Following the APCO acquisition, Total
reached its peak in '72, the credit card department was processing on
average 20 trays which averaged 2000 credit card transactions per
tray each of 19 working days of each month plus one payment
transaction for every four credit card transactions.
It required
64 data entry operators to enter all of the data each day. The turn
over rate increased along with the increase in training time as time
past. Those involved knew we had to change what we were doing.
Total followed the lead of the large
oil companies and installed an optical scanner. After the scanner was
up and running the number of data entry operators was reduced to
7.
Now can you imagine the impact on the number of jobs the large
oil companies caused when they used scanners because their
transaction volume was 20 to 30 times as large as Total's.
In addition at this time the computer
center had an IBM 360-40 which was larger than a refrigerator with 32
disc drives, 4 tape drives, two printers, and a punched card reader
running three shifts five days a week.
Most people were surprised when I said
the computer department used paper by the pallet. A semi came at
least once a week and the operators would use the large and small
lift trucks to unload it. The large lift truck put the pallets on the
top shelf and the small lift truck put them on the floor below, both
were electric.
After the office closed, a second shift operator
would use the small lift truck to put pallets on electric powered
cart to move them next to the computer room door, the lift trucks
were to heavy for the office floors. Then they would load the boxes
on to hand trucks, take them into the computer room, and stack them
against the long back wall.
Credit cards was the largest user of
paper. Every day a post office truck would deliver trays of credit
card transactions and bags of office mail. The credit card department
and the office had separate zip codes from the rest of Alma. Every
night the post office truck would return and pick up new credit cards
to replace the ones received and about ten thousand statements to be
mailed to customers.
The credit card name and address section
would receive a printed list by card number and a list sorted by
alphabet for each cycle to make corrections when people moved or new
customers were added.
All of the old paper was stored in the
warehouse and each month a representative from the surrounding school
districts would come and take boxes of the old paper to use in their
grade schools for drawing, painting, etc. What was left over was
pulverized and used as fuel in a special boiler to make
steam.
Eventually, Total changed to descriptive billing and the
cardboard punch cards were replaced by heavy paper because a new
scanner could read the heavy paper and transfer the data directly to
the computer. Instead of printing reports they were printed to micro
film and micro fiche and those who used them had readers. When the
entire credit card department was put on line almost all of the paper
disappeared only statements and the heavy paper transaction cards
were left. Point of sale eliminated the heavy paper transaction
cards, but that was after my time.
Total was a small company, can
you image what the large credit card companies were doing?
With in five years the 360-40 computer
equipment was replaced with an IBM 4300 computer that was not much
larger than a desk top computer of today with 4 disc drives, one tape
drive, and one printer running one shift per day. Because the speed
and storage capacity of the new equipment was so much greater than
the old equipment the number of operators was reduced by 4. Also the
cost of the equipment was half of the previous cost. Again Total had
followed the lead of the large oil companies and again can you
imagine the number of jobs lost?
Remember that the above is only
the primary losses if the secondary and tertiary losses are included
the number increase rapidly, e. g., IBM closed several factories that
produced data entry machines which in turn caused the material
suppliers to reduce the number of their employees.
What most
people do not know is that it was the very large credit card
transaction volume of the large oil companies that kick started the
rapid expansion of the computer age. During one brief period in time
the oil companies operated more computers than all of the rest of our
country combined.
So when the talking heads say that mass
production lowers costs which then lowers prices I would like to put
my foot in their mouths because they are still living in the
industrial age. Efficiency and the lower cost of computer equipment
is what has lowered the costs which then lowers prices in the
computer age. However; it does so at the cost of jobs and the
stagnation of wages. This is why the recovery since '08 has been so
slow.
I keep hoping that the talking heads will wake up to what
has happened and what is happening so that we can mitigate the
negative aspects of the computer age.
The vice president of refining was
invited to go to Paris the year before and CFP brought him back as a
senior vice president to replace the president. He was a changed man,
he would not speak to people who had been his friends for more than
twenty years.
In September the chairman of the board retired do to
poor health and then began the company joke about the president of
the year. Each year for the next six years CFP brought in a different
person from one of their external divisions. They were politicians
not oil men and together with the senior veep they made no
contribution to the company except to increase home office expense.
Total would never again show a profit.
When CFP installed the Frenchman I was
with on the Philips properties, I had hopes that he would bring the
spending of the senior vice president, the veeps of finance and
refining under control. He was worse, he was like the senior veep, he
would not say hello when we passed in the hallway. He bought two King
Air turboprop air planes which he used to transport singers,
musicians, and artists around the country. The operational cost of
the planes was more than a million dollars a year and the expense
accounts of the above continued to increase.
The spenders decided
that Alma was not big enough for them, so four of us were sent to
Denver to find a suitable location, we made four trips. I don't know
why they wasted time because they had already made up their minds to
be down town. I had been to Denver many times and I knew about the
rush hour traffic. During rush hour it took an hour and a half to
reach the suburbs. Any other time about twenty minutes.
After
living in a small town for more than twenty years, I was not about to
spend three hours every day in car. When the veep told me their
decision, 'I am not going with you, but I will do what is needed to
transfer the computer department and the programs to Denver.' Shortly
thereafter I received a five year consulting contract. The transfer
was complete in three years and two years later CFP sold the company
to Del Mar Diamond Shamrock and all of the home office employees were
eliminated, some time later Valero Energy bought them. I had
adjusted to retirement so it didn't phase me even though all the work
of many people went down the drain. But what I had learned I still
had.
Looking back I was glad I retired the
way I did. The first six months I worked 40 hours a week. Then as
each department left, my time was reduced a half day at a time. By
the end of the second year I was working half days three days a week.
The last two weeks I worked one hour a week. By then I had adjusted
to being retired, but more importantly my wife had time to
adjust.
Each of the stories I have shared made some small impact
on my thinking, but when I learned the systems approach it had a
profound effect. That story is on my web site under 'Thoughts'. I
wished I had learned it sooner, but as the old German proverb says
'We are to soon old and to late smart.' It is a part of living, we
can only learn so much at any given time. Each of us must follow our
own learning curve.
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