This may be a boring topic for some, especially if you do not use the services of ATS. It is lengthy but is packed with detail for those who use our services or who may wish to do so. However, in the interests of open communication, here goes!

Circumstances have dictated that we clarify our position while we are in the process of changing our Standard Operating Procedures. It is very important to us that, in doing this, we keep our existing clients as well as new incoming clients updated to minimize misunderstandings and incorrect perceptions.

Keep in mind that the Stations generally have two important outputs to meet with SMMEs i.e.
1. Innovation support and facilitation;
2. Technology transfer and localization.

Historically our pricing was done as a percentage of what commercial enterprises would charge for the same services, especially with respect to analytical work (microbiology and chemistry). We could obviously not charge more since we are not an accredited laboratory. For other types of services e.g. product and process development, our costs were estimated based on their value to a client (very fuzzy logic) and expenses roughly relating to man hours, type of expertise required and consumables (note: it is a little more complex than this but the description will suffice for now. See footnote¹).

As part of our pricing, we were (and still are to a degree) able to offer a subsidy for smaller clients based on a sliding scale (the concept of “subsidy” is explained in more detail as a footnote²). This further enabled us to appeal to, and assist, techno-entrepreneurs, start-ups and smaller companies generally.

As we have evolved over the years, this mode of operation had been impacted upon by a number of things, the two key of which are:
3. Constraints in funding from our primary funder (Technology Innovation Agency) to meet our targets and to equip us adequately for some projects.
4. The legal obligation as a state-funded public institution to cost all services at “full cost”. The concept of “full cost” is explained in more detail as a footnote³. For (3) above, there are a number of ways of mitigating this risk, as outlined below:

• Seek other forms of funding such as from DTI, IDC et al.;
• Seek collaboratively funded projects;
• Seek special funding for additional staff members/ contract employees/ researchers;
• Expand our service range or renew existing services;
• Advertise more aggressively;
• Seek more innovation-rich projects;
• Push up project throughput rates;
• Generate intellectual property that could be converted to financial value or an annuity income stream.

This is by no means a complete list but, as the list grows longer, there is an implication of growth of the Station that would be required to handle the workload. Implicit in this workload is an additional administrative burden to handle the compliance issues for each funder involved and also to handle the monitoring and evaluation by the primary funder. For (4) above, the Station must (via this blog and other communiques) inform its stakeholders of the reason for an increase in the costs to which they have become accustomed over the years. For those services that are too expensive for the stakeholders, these may be done via ATS outsourcing such to commercial providers or by suggesting to clients that they use the commercial service directly. This could include an arrangement where the Station is the manager of a project during which the client takes samples from ATS for external servicing. It is important to note the following four caveats though:
a. ATS will still service internal demands from the CPUT research fraternity for those services which are more expensive than the commercial costs. The costs for this will only be restricted to expensive chemicals and other consumables required.
b. ATS will conduct such services toward student and ATS Intern training i.e. there is a solid reason for doing this.
c. Where ATS provides a legitimate community service these may also be provided at a minimum (subsidized) cost.
d. ATS still reserves the right to offer such services to clients with an appropriate subsidy to bring the cost down for specific cases where such is required. This option will be used sparingly.

All of this is a work in progress with a steep learning curve. The Station is indebted to Productivity SA through its Senior Adviser (Ms. Charlene Steyn) for conducting a training workshop for ATS staff. This contributed significantly to the process of becoming fully compliant in this regard.

Please direct any queries to us if this blog makes no sense at all!

Larry Dolley

Footnote 1:

Costing of non-routine services such as product and process development, use of the full steam line from the retort to the finished product after retorted et al. will be fully costed on a “per project” basis since there are many permutations of a set of unit operations. See later for the description of full cost.

Footnote 2:

The concept of “subsidy” as applied in the final price for a project is as follows:
Project price before VAT:       R 100.00
10% Subsidy applied:             R10.00
Project price incl. VAT:           R90.00 + 15%.

The key concept to note is that the subsidy implies that the Station has separate funding to apply such a subsidy. This means the Station still charges the full cost by taking the R10.00 from its reserves or from funding allocated to support such a project. If there are no reserve funds or special allocations, then a subsidy cannot be applied. For this reason subsidies are allocated sparingly and based on a strict set of rules.

Footnote 3:

The concept of “full cost” MUST be applied to ALL projects and quoted based on the following elements:

• Project costs: Costs for man hours (HR), consumables, equipment time, communications, any new equipment purchased for a project, travel, IP assignment, contingencies, consulting services required, bursaries & fellowships and a margin.
• Indirect project costs: A fee of 35% is added for these costs which includes electricity, water, IT infrastructure, CPUT administrative services, space, maintenance, etc.
• Direct project costs: CPUT takes a percentage of the costs related to man hours above. In effect, the actual increase in project price (final cost to the client) above the Project Cost described above equates to about 12 – 15% at the end of the day depending on the nature of the project. The “full cost” concept and the “direct” and “indirect cost” concepts form part of the Intellectual Property Rights from Publicly Financed Research and Development Act (Act No. 51, 2008) (the IRP Act) and was signed by the President and appeared in the Government Gazette on 22 December 2008, but only came into effect on 2 August 2010.

This act places a legal obligation on ALL state funded institutions conducting research and possibly generating IP (universities not being an exception) to cost projects at full cost. The percentages referred to e.g. for indirect costs, is calculated separately per university and approved by the National Intellectual Property Management Office (NIPMO).

This act serves to protect IP generated using public funds (or allows sharing of IP on a pro rata basis) and also allows university to recoup costs for the use of facilities during such research.

The use of new food product development as a capstone project for most (if not all) tertiary qualifications in Food Science and/or Technology is well over 25 years old in South Africa. From very small beginnings it has blossomed into a significant part of the training programme. It is one of the key elements in bringing the food industry into our assessment programme where students are grilled (pardon the pun) by experts on different aspects of the products developed.

For the uninitiated, students are given a theme against which product development takes place over a period of 4 months. They usually have six months to plan around this as a group after which, in their 3^rd and also 4^th year of study they have to execute. This execution ends up in a packaged product with appropriate labelling. Some examples are given below in which the theme was “inclusion of kelp”. Other themes related to meat analogues, soya-based products, children’s treats, etc.

However, this commentator had developed a jaded palate (pun-ish me for this J) over the years. It pointed to a need, in my mind for renewal and revitalization. However, let me be clear that the comments below are not necessarily original and possibly have been acted upon in one way or another. To give some credibility to the latter statement, I have taken advice from my colleagues in Food Science & Technology in this regard.

In my opinion (moderated by my colleagues), the NPD concept needed a hupstoot (for the language-challenged – a boost)! Either that or it must guarded against that NPD in the academic context does not become a simple “recipe and cooking instructions” process. I have been informed by my learned colleagues that the latter is not the case. However, two suggestions are mooted/ proposed for the possible improvement or re-invigoration of the concept.

Concept 1: When developing a product at kitchen scale, and if it is acceptable to the marketing people and other signatories, it would then have to be up-scaled while being compliant with all the necessary company policies and legislation. It does not make sense to develop a product for the mass market just to find out that it is not scalable due to one or other reason. As an example, if there was a big enough market, would you be able to satisfy consumer demand for pofferetjies at scale?

It is suggested that, as part of the NPD process, a professional food process engineer (or similar omnivore) be hired or enticed to donate time pro bono to assist. This person could, as part of the NDP process, provide advice on the feasibility of scaling up from the point of view of the manufacturing process. One could also extend this to an expert in procurement of raw materials – will you have enough raw material to supply an up-scaled process? Are there enough tomatoes produced in South Africa to make tomato paste? Click here if you want to know the answer!

This brings a whole new ball game and value to the development process! Imagine cross-fielding this with the Faculty of Engineering!!

Concept 2: A recent mail from a supporter of education in Food Science & Technology, Mr. Nick Starke (ex-Nampak R&D), contained a link to a website, the contents of which made an old itch revive itself and thus presenting a need to scratch. The website deals with the fact that under-privileged universities in Africa are starting to create/ build equipment for themselves due to costs and/ or availability. Read this article here!

Again, this had been a pet project of mine (in my head mostly but sometimes tumbling out of my mouth). Why not build small-scale equipment from scratch, either as a tool for demonstration or for actual use in processing? Why not make this a collaborative project with other departments in the Faculty of Engineering? An example of this is to build a small (nano-?) pasteurizer (tube or plate) to handle sample sizes of, let’s say, 20 ml?  Include sensors, pumps and a testing regime in terms of microbiology? What about any other high-value small volume liquid needing such (or similar) treatments? What about micro-fluidics and flow chemistry as a tool in this regard?

A few years ago we assisted a Department in putting together a brief to build a small-scale spray dryer. A working prototype was produced to spray dry milk using relatively inexpensive and readily available materials and parts. The potential is there!

And sure, there are commercial products at small scale. But you could, within reason, challenge students with such a theme/ request taking this beyond the textbooks and Powerpoint presentations in class. And yes, I may be over-simplifying the feasibility of doing this, but let’s see what can come of this! I have seen something similar to this at Innoventon, an institute at the Nelson Mandela University in Port Elizabeth but at a scale a little bigger that what I envisage (more engineering than food though).

Concluding Remark: So, what do you as an alumnus of this institution think about these possibilities? What other re-invigoration would you suggest? Is it at all necessary?

Larry Dolley

Do you remember starting school and the point where you started learning about TENS and UNITS? If you do then you are quite young! The point here being the word UNIT(S). It’s a simple English word but with many different interpretations once you start dissecting it. What is a UNIT and how do you describe it in different situations and for different measurable parameters?

A unit = 1. This is the most basic explanation I can give. However, if we talk about time, the question is 1 what? Well, it could be 1 second, 1 hour, 1 light year, etc. Does time have length, breadth or height or does it have period? TV presenters talk about length of time and very seldom use the word period, which is probably best suited. This has been happening for a long time….there we go again! I have lots of free time that’s why I am writing this blog……or do I have lots of free periods of time?

Another quantum: “lots” or “a lot”! There were lots of people at the taxi rank this morning….or were there many people…..or was there a large number? What about volume: 1 litre and many litres, one large volume (not easily measurable), 1 millilitre (measurable), lots of water! The same descriptors in terms of quantity may apply to many different measurable parameters.

However, at the end of the day, there are a few descriptors that are more correctly descriptive rather than vaguely descriptive (number, length, period). At the same time, why worry, we all understand what is meant during casual conversation. Scientifically though, we need to be a little more specific when speaking and writing. We need to understand exactly what is being conveyed without having to redefine words as we use them.

An interesting example in casual conversation to end off this bland topic: what is one Rand? I had asked this question at a workshop when covering a section of standard units used in chemistry. It was amazing (or not so) that not one participant could define the Rand. Can you? I then used this as an example of what a standard is and how a standard is just that…..a standard…..it does not change! And it has a UNIT. Is the Rand a standard? If not, what is the standard in this instance?

Larry Dolley