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By L. Wayne Collins
Managing the Modern Laboratory, ALMA, Volume 7, Number 3 (Edited for space)
MML: Is your businesses run the same way around the world?
Mark: I’d like to say that the model is run the same way but in any international business, there are going to be local differences. One of the successes of an international business is to recognize these local and cultural differences—and we do. But in terms of the systems and procedures, we try to standardize as much as possible across the world. Certainly you have to have the local knowledge of the rules and regulations and build these into the standardized operation.
MML: Do you get much cooperation and communication between the locations?
Mark: Oh yes. There is vibrant communication across the divisional laboratories of Intertek OCA which we encourage to facilitate best practices sharing.
MML: How do you measure the operational performance of your labs?
Mark: No matter what the cost advantage, the customers won’t come if the quality is not there. Most of our labs are accredited to ISO 17025 or are working toward that standard. We conduct round robin testing, have a well developed SQC system, and challenge ourselves with blind samples. For our analysts to reach the highest level of competence for a test, they must pass a blind sample test. The lab network has dedicated quality managers who work with the laboratory managers to insure that these quality systems are effective. In addition to ISO 17025, we have a growing of laboratories which meet GLP, GMP and cGMP criterias.
MML: What type of work do you typically get from your customers—overflow or R&D?
Mark: Most of the work is overflow and routine, about 60% of the work falls into that category. However, more specialized and high tech testing is growing. Several recently signed major lab outsourcing contracts were with the R&D departments of major companies. Where it would have been rare to find a Ph.D. in Intertek OCA five years ago, you’ll find Ph.D.s in most labs now. The higher end testing is driven by the high capital costs and high visibility of R&D. R&D is centralized and highly visible in a corporation, whereas a plant QC lab is hidden as a small part of a huge budget of plant that makes millions of dollars. Because of cutbacks in the petroleum and petrochemical industries, technical knowledge is lost and the resources for problem solving that were there in the past are not there anymore. This drives demand for outsourced independent laboratory solutions, creating opportunities in high end testing for Intertek.
MML: How do you handle proprietary concerns with this high end testing?
Mark: There are two elements to that question—confidentiality and intellectual property. As a company, we do not strive to own intellectual property. When we work with a customer, it is clear from the beginning that anything developed in the course of the business is owned by the customer—we will never lodge rights to own intellectual property. This agreement gives the customer a great deal of comfort and security. Regarding confidentiality, we benefit from our background in the inspection business where we provide an independent service for buyer and seller. In this business, we might have propriety technology for one customer along side proprietary technology of another customer so that confidentiality has been an inherent part of the culture for many years. When customers are concerned about this issue, we can show a track record of confidentially that has been a key part of our business since the beginning in 1885.
MML: Do you share R&D resources among different clients?
Mark: Usually these issues are worked out with the customer in advance. The chemist can be dedicated to one customer’s projects if the customer is willing to pay for that more expensive model. Other times, the customer is quite happy to have the chemist work on multiple projects as long as his information is kept confidential.
MML: You mentioned teams several times. How do you use them in your business?
Mark: Teams are important for major projects where a customer is outsourcing testing to us. These deals require a combination of skills because we are dealing with many factors of the business—a technical side, HR, a business plan, financial, IT and so forth. Project teams are a very effective and a necessary way to work to insure that everything is successful. It’s not just about laboratory testing, it’s about the business itself.
MML: How is your safety record?
Mark: I think it is a good record but it’s an area where we are never satisfied and seek continuous improvement. For example, in the US and Europe, I am not aware of a lost time accident this year. In fact, with most of our customers, safety is the first thing that they ask about when they audit a laboratory or talk about outsourcing work. We have to invest to make our safety systems world class or our customers will not want to work with Intertek OCA. So we audit our systems and seek improvement each year.
MML: Are you involved with some of the new approaches to testing such as on-line analyzers, chemometrics, or high-throughput labs?
Mark: We have a partnership with a company called Avantium which was born out of Shell and operates a state-of-the-art high throughput lab in Rotterdam. We are work with partners who help in providing these services to our customers. For on-line technology, we work with partners who have that specialty as their core business. We work with the process technology division of ABB and have built a new near-infrared system for crude analysis on platforms in the North Sea.
Chemometrics is another opportunity. Intertek acquired a world leading skill set in chemometrics and computational chemistry when we took over Avecia’s Corporate R&D labs in the UK. We see some of the traditional tests we are doing can be modeled to help us develop new techniques and increase still further the operational efficiency of laboratories. Chemometrics has promise to become a core part of our business.
MML: Sampling seems to be a bottleneck in many analytical labs. Have you made any progress in automation of sample preparation?
Mark: My ultimate dream is where customers can just e-mail us the sample! But seriously, perhaps the answer is in inferential information where a sensor in the field sends data back to a computer. I think that’s something we’ll be looking at in the future. At our Intertek ASG laboratory in Manchester, we have a group of people who are working to build new techniques that would replace old manual methods. We have expanded their view to look at the petrochemical industry where many of the tests are slow, manual, labor intensive, and not very accurate.
MML: You’ve mentioned several uses of IT in your business. How does it fit into your business model?
Mark: We have a growing number of qualified and captured inquires per month from customers looking for analytical testing services and it generates sales of millions in revenue per year. We invested in marketing through the web to capture customers and the results are encouraging.
MML: What do you see as the future of the analytical lab?
Mark: A bright future, but a changing future. The traditional chemical industry sees the analytical function as an area that can’t be managed well and don’t view it as a core function of their business—they try to save money by reducing or closing their laboratories. This means a bright future for the independent laboratories. When we surveyed our customers through independent market research, we found that our customers are spending billions on in-house testing in the petrochemical industry— a significant market. More of this work will flow out to the independent laboratories, providing a promising future for lab workers in this business. Technology and automation also provide new opportunities.
MML: What are your prospects going into the future?
Mark: We expect that analytical testing that is not related to the traditional business will be 50% by 2006. Currently today, it is about 30%, growth will be greater than 20% each year.
MML: How are you able to staff for that rate of growth?
Mark: Obviously where there is a industry downsizing, we can take advantage of lab staff coming from our customers. And Intertek is an attractive employer. People migrate to us because they see a more secure future with opportunities for career development and advancement. We have maybe 20 vacancies per week in the USA alone fueled by the growth of the business.
MML: Do you have high turnover?
Mark: Probably less than 5% per year, a positive change from the old days.
MML: Any last comments?
Mark: The future for our business is bright, we are riding the top of a powerful outsourcing wave that is changing how commercial chemistry is conducted, a wave that shows no sign of slowing down. Having said this, few testing companies are able to take advantage of this. The independent analytical laboratory market is very fragmented with lots of small mom and pop companies, with limited resources, manpower, expertise and capacity for growth. Only a company like Intertek has the ‘critical mass’ to offer a wide range of analytical testing solutions under one roof.
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