Deadly Overproduction
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.
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.
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
