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TECHNICAL SYSTEMS & DESIGN ANALYSIS
CONSULTANT & PROJECT MANAGER
Technical Systems & Design Analysis is a cost-effective method to quickly and favorably resolve scenarios like the following!
You are considering a new Project or Investment and, as always, you know there is Risk involved! However - you do not understand all of the technical issues in this Project. The "technology" is new and exciting but it has never before been commercialized as in this Project. In these situations, the following questions need to be quickly addressed before spending any more money on the Project.
- If this technology is so "slick" and "easy", I wonder why no one else has done this yet?
- Is it just a bunch of flashy "bells and whistles", or is it actually needed in the market place?
- I know the technology will work in a laboratory because I saw a nifty demonstration. However, will it work on a scale that is large enough to make this venture profitable?
- Has a large enough market been identified to justify commercialization of the technology?
This scenario is a good example of one that needs Technical Systems & Design Analysis!
Technical Systems & Design Analysis is also a component in most Business Systems Analyses and the initial step of the Technical Due Diligence process. It seems logical to ask, "What does the word "Technical" mean in the context of the phrases "Technical System", "Technical Due Diligence", and "Technical Risk Analysis?" The answer to this question requires a brief regression.
Today, most investors generally accept the definition of the term "High-Tech" as an adjective that means "computer related", or "Internet related". The adjective "Technical" is much broader in its definition and its use was actually spawned by the "Space Race".
Since Sputnik, the world has become enamoured with any form or manner of technology. As we watched men walk on the moon from our living rooms, we started to believe that anything is possible. These events really whetted our appetites for technology!
Then along came the computer revolution. It not only reinforced our desire for technology, it made its development something that we could do in our homes. Today, Engineers and Scientists can come home and perform design calculations on Technical ideas that required large "state-of-the-art" computers 20 years ago. Today, we can design molecules on our home computers! We can build "virtual" airplanes, assembly lines, and plants to see how well they will function when actually constructed.
It seems that as our "need" for more technology multiplies, we find new ways to examine and develop it!
The "Technologies" that I am defining are the ones that make the products we use, the plastics we need, the semiconductors we demand, etc. We can now list some examples of these "Technologies".
- Any manufacturing process that will produce a better product or produce an existing product more profitably. This includes robotics, automation, new processes, etc.
- Any process that will generate and/or transport utilities more efficiently.
- Any new product generated from the "Materials Sciences". These include
- Synthetic fabrics
- Ceramics and other refractory materials
- Semiconductors, superconductors
- Lubricants, adhesives, other specialty chemicals
- Biosynthetic Materials
- Health Products
- Any process that handles process wastes more effectively and efficiently.
These "Technologies" allow us to make things faster, bigger and better - sometimes!
Unfortunately, these "Technologies" I am discussing also collide head-on with "science barriers" from time to time. Sometimes these barriers can be circumvented, or passed through, but many times they "stall" certain technologies for indefinite periods of time. One of the principal ways we know when we hit one of these science barriers, is we discover that something we want to do is "deemed" be uneconomical. And in most situations, a full analysis of the "Design" of the technology must be performed in order to obtain a true picture of how the technology will function in its final state.
Yes, economics is one of the single best metrics we can use to evaluate these Technologies. This truth still remains - "How good is a technology if no one can afford to use it?" This is an axiom that is often forgotten by Scientists, Engineers and Entrepreneurs.
The process of Technical Systems & Design Analysis involves the examination and thorough analysis of the entrepreneur's Business Plan. During this analysis, there are three principal tasks that must be accomplished, and accomplished in this order. They are:
- Is the technology real? In other words, we must be confident that it obeys all of the laws of science. It is a waste of resources to continue further and develop a Business Plan for a technology that will not work and can never be made to perform the task for which it was designed!
- Is the technology scalable? We must be sure that the technology in the Business Plan will work (and meet profit requirements!) at the "scale" required by the Business Plan. If the technology won't work within the framework of the Business Plan - STOP!
- Determine the quantitative uncertainty of each individual step in the Business Plan. If someone used a "number" to create his or her pro forma, then the value of the "uncertainty of that number" is important and must be determined.
This brings us to a concept I call TABU. It is a simple, fundamental, yet often forgotten, concept of Technical Systems Analysis that I use in evaluating potential investments.
- Technical Axiom of Business Uncertainty - The less you know about a Project, the higher your uncertainty regarding the Project.
The pro forma is one place in a Business Plan (or any project) where all of the uncertainty resides. This is the place where all of the plans, strategies, and dreams are quantified to give us the "answer" that is supposed to reflect the project's "viability (profitability!).
We each recognize that a pro forma is a prediction into the future. We also realize that the further we go into the future, the less certain our predictions. This leads us to the logical conclusion that even though a "best faith effort" is used to make these predictions, there is a real "natural uncertainty" in these input numbers! Further, not only will some of the input items have less uncertainty than others, their uncertainty will most likely not be symmetric. In other words, the uncertainty in "cost" items tends to be larger for the "high side" than for the "low side". The reverse is true for "income items".
Therefore, a "good" method to determine a project's risk is to first measure, or quantify, the uncertainty in our pro forma's input. Then, we will use this uncertainty of the "input" to provide us with an uncertainty in the output of the pro forma, or "answer".
Every "Number" that is used as input for a pro forma must be critically evaluated as an individual "Project". As we learn more about the origin of the value of that "Number", its "Uncertainty" changes accordingly. The point to be made is that every number that is used in a pro forma has an uncertainty. Our purpose is to quantify that as well as possible, so that the final answers from the output of the pro forma will reflect these cumulative uncertainties in the input. This Uncertainty in the pro forma output will eventually become a quantitative measure of the risk (uncertainty!) in the project.
As you can see, Dr. Wright's unique Quick Question? Quick Answer! program may provide you with the just the answers you need to make a knowledgeable and timely business decision! These early "answers" are an important part of effective and cost-efficient Technical Systems Analysis.
This process of Technical Systems & Design Analysis has been developed because of the presence of high risk in Technical Projects. However, the methodology will also work with High-Tech Projects and Conventional Projects!
More information about Dr. Wright's three primary areas of expertise in Technical System Analysis can be found at the following links.
- 1. Manufacturing Process Technology
- 2. Environmental Products & Processes
- 3. Nuclear Technology
Below I have listed some of my specific Qualifications and Experience in the field of Technical Systems Analysis.
- Performed Technical Systems & Design Analysis on an Electrolysis Project.
- Performed Technical Systems & Design Analysis on a High-Temperature Waste Incinerator.
- Assessed and mitigated the Process, Safety, Environmental and Business Risk from Oil & Gas Operations, Manufacturing, Waste Treatment & Disposal, and other industrial operations.
- Used "Fault Tree Analysis" for Process Design Safety of Chemical and Nuclear Processes.
- Developed Monte Carlo Risk Analysis Techniques and Computer Software for use in the Petroleum Industry.
- Performed Thermodynamic Calculations required for Chemical Process Design.
- Developed Visual Basic Macros for Excel to control other computational software.
- Determined Process Requirements and Techniques for the Development of Certain Ceramic Products.
- Designed and constructed microcomputer hardware, instrumentation and software Systems to remotely control chemical processes.
- Designed a "slop oil" Reclamation Unit and that is recovering 300 to 500 Bbls/day of Crude Oil from Waste Tank Bottoms.
- Designed a Small (50,000 BTU/hr) Tire Pyrolysis Unit that generates steam from whole tires.
- Designed Industrial WasteWater Treatment & Disposal Systems.
- Developed operational procedures, physical sampling, and analytical chemistry protocols for a commercial water field that sells drinking water to municipalities.
- Designed Water Treatment Units for use by expatriates in Siberian oil fields and in the US.
- Worked in the Weapons Planning Group of the Director's Office that was responsible for Technical Systems & Design Analysis, Monitoring and Oversight of Laboratory Programs involving Nuclear-Weapon Design and Testing.
- Member of the Management Committee that evaluated proposals and monitored projects for a $17 million/year internal R&D budget.
- Worked in a Group that determined the technical vulnerability of nuclear weapons to all possible conditions in the "stock-pile-to-target" sequence.
- Led a Laboratory-Wide Evaluation of the accuracy and methods of Neutron (Radiochemistry) Diagnostics used in determining Yields of Effects Tests.
- Led a National Team to re-evaluate Radiochemical data from old Atmospheric Tests.
- Evaluated Treaty Issues to Allow Peaceful Nuclear Explosives (PNE's) under a Comprehensive Test Ban Treaty (CTBT) for US State Department Negotiators.
- Evaluated potential nuclear weapon designs of potential adversaries.
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