On the Money

By Tom Branna, Editorial Director | June 4, 2012

Baseball and business mix when sports executive Paul DePodesta delivers the keynote address at the Consumer Specialty Products Association mid-year meeting in Chicago, May 8-11, 2012.

Baseball and business intersect in many ways and at the corner of this intersection is Paul DePodesta, executive director of player development for the New York Mets and a key figure in Billy Beane’s “Moneyball,” an Oscar-nominated motion picture based on the best-selling book of the same name. DePodesta was the keynote speaker at the Consumer Products Association (CSPA) mid-year meeting in Chicago, May 8-11, 2012.

CSPA chairman Lisa Alexander told attendees that sustainability plays a prominent role in corporations’ drive to improve profitability.

“Sustainability is important to embrace now and in the future,” she insisted, noting that companies can maximize profits by redesigning packaging, reducing water consumption and taking more unconventional approaches to measure sustainability.

Unconventional measurements are the basis for Moneyball, former Oakland Athletics general manager Billy Beane’s methods to evaluate the baseball talent that weaves its way from the high school field to major league ballparks. Harvard-grad DePodesta played an integral role in shaping the Athletics’ minor league system and major league roster, and currently is applying those principles for the Mets.

A Winning Combination
They may not be Tinker to Evers to Chance, but (l-r) Chris Cathcart, CSPA president; Lisa Alexander, CSPA chairman and Paul DePodesta of the New York Mets, did a great job leading off the annual midyear meeting in Chicago.
“We took a page out of Peter Drucker’s book,” recalled DePodesta, “And asked ourselves the naïve question, ‘if we weren’t always doing it this way, is this the way we would start?’”

The speaker likened Major League Baseball to the pharmaceutical industry in that both spend a lot of money on projects that are more likely to fail than succeed. Therefore, zeroing in on the winners becomes critical to a team’s and a company’s long-term success. Unfortunately, for more than 100 years, baseball scouts have used subjective superlatives when describing talent with words like “he looks like a ballplayer.” Moreover, too often scouts would fall back on affirmative bias, and once they made a decision on a player it was very difficult to change that opinion—despite evidence to the contrary.

“It’s an inexact science,” DePodesta acknowledged. “We relied on our intuition and tried to make the data fit.”

The opening session draws a big crowd eager to hear more about the link between baseball and business.
Instead, Beane, DePodesta and the A’s organization developed a new set of metrics that gave a better indication of credit and blame in various baseball scenarios. For example, in traditional statistic keeping, if a batter hits a line drive that forces the centerfielder to make a diving catch, the pitcher gets credited with an out, the batter gets blamed for the out and the centerfielder is neutral. But in the A’s new way of measuring, the pitcher gets blamed for giving up the hard liner, the centerfielder is credited for making a big play and the batter got some credit for the line drive.

The popular InnoVention format enables industry executives to exchange ideas in a relaxed, informal setting.
“We couldn’t afford the five-tool players (those that could hit for power and average, field, run and throw), but everyone had to something above average,” he recalled, likening it to a company stock in a mutual fund portfolio.

“And whatever we did, there would be an A’s way of doing things throughout the organization,” he said.

Once, the A’s had their system, they had to sell it to the staff and believe in it themselves.

“We had to see if we were lucky or good,” recalled DePodesta. “It’s okay to be lucky. It’s not okay to pass it off as skill.”

To keep themselves honest, the front office maintained a diary on every decision that was made.

Along the way, staff members kept asking themselves that naïve question and it too, became part of the process. As a result of the A’s success—the team consistently made the playoffs despite having one of the lowest payrolls in baseball—most Major League teams, including the Boston Red Sox, Chicago Cubs and Tampa Rays, now employ some sort of database assessment tools.

Beyond Baseball
While Beane, DePodesta and others have rethought the way Major League Baseball evaluates talent, CSPA has reworked the way an association maps the minefield that is Washington, DC. For example, the Association and its members have embraced sustainability and TSCA reform and helped shape ingredient disclosure. CSPA president Chris Cathcart noted that if an obscure New York State law is enacted, it could have a major impact on ingredient disclosure, both in that state and throughout the US. Therefore, CSPA is working to make that sure that any state law is workable, and in the best interest of both business and consumers.

Despite uncertain economic times, CSPA continues to thrive, according to CSPA president Chris Cathcart.
On other issues, CSPA is leading the way on PRIA III; leading the fight on inhalation abuse through the Alliance for Consumer Education (ACE) and working to ensure that its members are free to formulate through the Product Ingredient Review. At the same time, the Association has redesigned its website to keep its 230 member companies well informed about the issues facing the industry

The Impact of GHS
Earlier this year, the Occupational Safety and Health Administration (OSHA) and US Department of Labor issued its final rule that aligned its Hazard Communications Standard with the United Nations’ Globally Harmonized System of Classification and Labeling (GHS). Now, the US needs to implement this system for standardizing and harmonizing the classification and labeling of chemicals.

To help its members understand the impact that GHS will have in the US and the European Union, its implementation and its impact on product labels, material safety data sheets and workplace training.
GHS can increase the quality and consistency of the information provided to workers, employees and regulators; improve downstream risk and facilitate international trade in chemicals, according to Will Pettit, a regulatory consultant with TSGUSA. But he warned that deadlines are approaching. For example, MSDS and labels must be GHS-compliant by June 1, 2015.

Across the Pond and around the world, GHS is impacting how companies operate.

“The US and Europe are getting closer (on GHS issues),” observed Klaus Berend, head of unit for chemicals at DG Enterprise and Industry at the European Union. He noted that much of Europe, the US, Japan and southeast Asia are in the process of implementing GHS, while Russia and China are preparing for implementation. In contrast, while Argentina and the Middle East have some GHS activities, the rest of the world has not even started implementation activities.

With GHS quickly becoming a global issue, Berend explained that suppliers should classify their materials before products go to market, ensure appropriate labeling and packaging before going to market, and cooperate with others in the supply chain in order to meet requirements.

However, the speakers noted that many issues still surround GHS. For example, although 183 dossiers have been submitted since January 2009, in many cases, different classifications have been used for the same substance. Another issue is that at OSHA, pH doesn’t play a role in corrositivity.

“Our products will likely change their classifications as a result of GHS implementation in the US,” noted Bill Beers, global chemical regulatory manager, Omnova. “You have to know a lot more about the products that you are buying from your suppliers. This is a very complicated issue.”

A Record Year for Aerosols
During the mid-year meeting, the Aerosol Division released its eagerly-awaited 2011 Aerosol Pressurized Products Survey. The numbers certainly didn’t disappoint, as US production rose 36 million units to 3.782 billion units—another record. In 2011, household products continued to rank as the highest production product category reporting a 2.4% increase in units filled over 2010. Driven by demand for perfumes and body sprays, personal care units increased marginally, up 1% over last year. Much of the increase in personal care products came from perfumes and body spray.

At the same time, automotive, lubricant and industrial products increased for the second straight year, climbing 2.2% from last year. Food product fillings also increased 2.2% and have increased 10 of the past 11 years, according to CSPA.

The survey, which also reports the unit volume of aerosol packaging components manufactured and delivered for domestic use in 2011, as well as estimates for Canadian and Mexican production, has served for 61 years as the primary index of the business strength of the aerosol products industry. Respondents included fillers of pressurized products, manufacturers of containers and manufacturers of valves.

During the Aerosol Division meeting, attendees also received updates on wide-ranging issues such as bag-on-valve products, aerosol recycling and inhalation abuse from division chairman Bill Frauenheim of Diversified CPC. He noted that non-government organizations are calling for mandatory ingredient disclosure on products, while the industry prefers voluntary disclosure. Meanwhile, the website, www.inhalant.org, recorded 92,000 visits from January to April, 2012. Along the same lines, the Minnesota Twins of Major League Baseball, as well as several minor league organizations, got behind the industry’s efforts to get the word out about the dangers of inhalation abuse.

Regulatory Soup
A joint program by the Cleaning Products and the Polishes & Floor Maintenance divisions reviewed the alphabet soup—TSCA, GHS, OSHA, etc.—that is global regulations these days. Unfortunately, many issues still surround these programs.

Tim Brown, regulatory counsel, CSPA, told the audience that TSCA reporting is now 100% electronic. Unfortunately, EPA is still conducting webinars on how to report electronically.

“That’s troubling,” he observed.

At the same time, while many observers insist that GHS will increase the quality and consistency of the information, the new rule is a 300-page, double-sided document. Some changes that should be of interest to users include Hazard Determination is now Hazard Classification, pictograms have been removed, and MSDS is now a 16-part SDS.

According to Brown, the workforce must be trained on GHS by Dec. 1, 2013; labels and SDSs must be completed by June 1, 2015 and by Dec. 1, 2015 companies will no longer be able to ship non-compliant products.

James Gaston of Omnova provided an update on the EPA’s Design for the Environment (DfE) designation, and noted that several issues still impact formulators, including the DfE’s 5% limit on amines. However, on other issues, EPA agreed with industry’s concerns, enabling formulators to use diethylene glycol ethyl ether C6 surfactants in flow and leveling aids.

CSPA’S director of scientific affairs Steve Bennett explained that NPEs were assessed by and found to degrade too slowly, especially in aquatic environments. Although NPEs are no longer widely used by the industry, program administrators are seeking input from industry on alternatives.

Joe Yost, senior director, strategic issues advocacy, CSPA, provided an update on volatile organic compound regulations. He noted that the California Air Resources Board (CARB) will have expedited rule-making for multipurpose products this month. Further down the road, CARB is expected to issue new rules for spray paint and aerosol adhesives next year.

“CARB doesn’t care if your products work,” Yost reminded the audience. “They just want to meet the mandate.”

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