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Deadly Overproduction
December 16, 2007


PEPCON disaster - Wikipedia, the free encyclopedia

In some Saturday afternoon background TV watching, my ears perked up when I heard about this story on the History Channel, from 1988. A factory, in Nevada (just outside of Las Vegas) had produced a chemical that was used for the space shuttle program as a rocket fuel accelerant.

The show claimed that, after the Challenger disaster that grounded the program (killing demand for the chemical), the company  "kept producing it anyway, stockpiling it, and hoping to eventually sell it."

According to Wikipedia:
With the space shuttle program frozen, no government instruction dictating where to ship the product, and no mandated storage procedure or proper storage facilities for such large quantities of product, PEPCON stored almost all manufactured ammonium perchlorate on-site, in plastic drums on campus parking lots. An estimated 4000 tons of the finished product were stored at the facility at the time of the disaster.
Well, wouldn't you know, an employee was careless with a cigarette -- who allows smoking in a facility with explosive chemicals!?!?!?!? -- and one barrel exploded, flying through the air, landing in the middle of the main storage stockpile.

According to fire responders, the plan at the factory had apparently been "in case of fire, run like hell," but they arrived to find employees trying to put out the initial fire with regular hoses.  A huge explosion ensued with the force of 250 tons of dynamite equiv (3.5 on richter scale) that was felt at the Strip, 10 miles away.

Two people were killed in what should probably be considered an utterly preventable disaster. It makes me wonder why it was cheaper or somehow better to keep producing the product, just to pile up dangerous inventory. Is there some chemical engineering reason that someone knows about?

It seems like an interesting case study in failure mode planning, basic safety, and error proofing, not to mention the "waste of overproduction." I don't think I've ever heard of a case where overproduction had been deadly.

Posted by Mark Graban on December 16, 2007 | Comments (2)


December 19, 2007
In response to: Deadly Overproduction
Mfgr'g Guy commented:

Mark I'm very surprised that you'd ask a question like - "why it was cheaper or somehow better to keep producing the product, just to pile up dangerous inventory". I read through your credentials, you should know better. The answer to your question is "trying to make a buck". Producing make-to-stock is an economics question not a scientific. They were producing it to keep their employee's working and storing it to make a buck down the line. Did they store it in a smart fashion? NO. But please remember things usually come down to dollars and cents. Regards, Mfg'rg Guy




December 19, 2007
In response to: Deadly Overproduction
Mark Graban commented:

Fair enough. These decisions often come down, though, to a cost/benefit analysis that doesn't take all the costs and risks into account. Look at GM, Ford, and Chrysler overproducing -- they might say that's the lowest cost approach, to build cars customers aren't buying to keep people working, but that strategy has done damage to their businesses in the long-term (eroding the brand and their resale value). Businesses are often pretty bad at making accurate cost/benefit analyses because of missing information or short-term perspectives. I don't think it's quite as cut and dry as you say it is, but thanks for reading and thanks for your comment.





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