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OM in the News: Ford Tests Walking Robot Deliveries

May 25, 2019

Walking robots deployed from self-driving vans to deliver mail parcels could soon be seen marching up to homeowners’ doorsteps. The project is the product of a new partnership between Ford Motor and Agility Robotics. The companies are aiming to deploy early next year up to 100 autonomous Ford vehicles carrying a robot that can stand upright and walk from the van to front doors, writes The Wall Street Journal (May 22, 2019).

Agility’s robots—resembling a headless human—have the ability to climb stairs and move across lawns, which should help them deliver packages of up to 40 pounds. The partnership comes as Ford ramps up its ambitions in autonomous transportation with various technologies. In 2017, Ford said it would invest $1 billion in self-driving startup Argo AI over a five-year period. Last year, the company struck a deal with delivery startup Postmates to test self-driving vehicles for delivering groceries.

Few, if any, partnerships with a major U.S. corporation are testing upright delivery robots in public. Some startups and Amazon have been using robot fleets that carry goods inside rolling robots. The Agility-Ford team will focus on mail parcel delivery, though other applications, such as grocery delivery, aren’t ruled out.

Classroom discussion questions:

  1. What factors might delay the successful rollout of this project?
  2. Why is Ford entering the delivery business?


OM in the News: Reshoring Black & Decker Wrenches

May 22, 2019

Stanley Black & Decker plans to move production of its Craftsman brand wrenches from China back to the U.S., the latest manufacturer looking to use automation to increase domestic output as tariffs raise the cost of imports from overseas. Stanley is investing $90 million to open a plant in Texas that will employ 500 people to make 10 million Craftsman wrenches and 50 million sockets annually. Robots and fast-forging presses will help boost output about 25% above the older forging machinery now used to make these wrenches in China, helping keep production costs at the new plant in line with those in China.

The company’s strategy mirrors moves by other manufacturers in recent years to bring some foreign production back to more automated factories in the U.S., reports The Wall Street Journal (May 16, 2019). Whirlpool is making some KitchenAid appliances in the U.S. again after they were made in China for years. Caterpillar has moved the assembly of excavators and small bulldozers from Japan to new plants in the U.S.

“We’re pushing very hard to manufacture where we sell it,” Stanley’s CEO said. The company moved production of Craftsman products to China years ago to reduce costs after decades of manufacturing in the U.S. (Some Craftsman tools are already assembled at 8 Stanley plants in the U.S.) Craftsman wants 50% of its tools to be made in the U.S. a few years from now, up from 30% today. The firm remains reliant on foreign-made components for motors for its power tools. After the administration recently raised U.S. duties on components imported from China to 25% from 10%, Stanley said its tariff costs on components from China this year will increase more than 60% over 2018 to about $250 million.

Classroom discussion questions:

  1. Discuss the implications of the tariff increases.
  2. Why is the U.S. now able to compete with China?

OM in the News: Pollution and Sustainability on the Seas

May 19, 2019

Some shipowners want to avoid the financial impact of investing in new fuel and equipment to meet environmental targets by simply slowing ships down.

The new editions of our OM texts feature Celebrity Cruises, and Supp. 5 (Sustainability in the Supply Chain) includes a video case study called “Saving the Waves at Celebrity Cruises.” This recent article in The Wall Street Journal (May 11, 2019) provides a complementary discussion of sustainability issues at sea, as more than 100 shipowners have just signed a UN motion calling for slower sailing speeds to cut greenhouse gas emissions.

The measure could ripple across international supply chains, with products taking more time to be delivered and cargo owners paying more for transport costs because of the longer sailings. But some container carriers oppose the slow-steaming plan, which they believe would undermine their efforts to improve service in the time-sensitive supply chains of their big consumer-goods customers.

Ships move the world’s commodities like oil, iron ore and grains and the vast majority of manufactured goods, including cars, home appliances, clothing and food. They also contribute around 3% of the world’s global pollution, an amount comparable to major emitting countries.

A new maritime environmental target takes effect Jan. 1st,, when vessels will be required to slash sulfur emissions that come from burning the heavy oil that powers ships. International Maritime Organization members have also agreed to improve ship fuel efficiency by 30% by 2025 and to slash greenhouse gas emissions by half by 2050, compared with 2008 levels.

Much of the sulfur-emissions reduction will come from using new low-sulfur fuel that oil refiners are preparing for the market. Operators also are buying equipment known as scrubbers that treat engine exhaust. The shift will add up to $15 billion a year to fuel costs industrywide.

Classroom discussion questions:

  1. What are the tradeoffs shippers and cruise lines are facing?
  2. What issues impact sustainability on the seas?

OM in the News: Nestle’s Shifting Warehouse Model

May 16, 2019

Nestle  will lay off about 4,000 workers as it stops delivering frozen pizza and ice cream directly to stores and instead transitions to a warehouse model that’s becoming an industry standard for Big Food companies looking to trim costs. The company is shutting down its direct-to-store delivery network for products like DiGiorno and Skinny Cow. The change means the elimination of an operation that now includes 230 facilities, 1,400 trucks and 2,000 different routes. The firm was able to reduce costs but ultimately, the direct-to-store model was too expensive, reports Material Handling & Logistics (May 8, 2019).

Shipping directly to grocery stores used to be more common, as it gave suppliers like Nestle eyes on the store and helped them quickly get products to shelf. But as companies look to cut costs, it often makes more sense to ship to warehouses. Nestle USA already uses the warehouse model for its frozen meals and snacks. Nestle isn’t concerned with losing space to sell its products without its own delivery people in stores. “Every inch of the freezer is controlled very tightly,” said the CEO. “As retailers have become more sophisticated, as the retail industry has consolidated some, that bit of Wild West where you could kind of move and push your competitor to the side, that’s not the case anymore.”

In 2017, Kellogg announced plans to eliminate 1,200 distribution jobs as it exited direct-store-delivery as part of a bid to cut costs. That means the company is relying more heavily on retailers to put its products on shelves. Snack giants Mondelez International and PepsiCo’s Frito-Lay both still rely on “DSD,” arguing it helps boost sales to have employees in stores stocking products..

Classroom discussion questions:

  1. What are the advantages and disadvantages of DSD?
  2. What has changed in the retail industry that allowed Nestle to make this move?

Teaching Tip: Two Cool Tech Tools for the Digital Classroom

May 13, 2019

It is important that we OM teachers find new ways to incorporate technology to stay current, enhance students’ educational experience, and support teaching and learning. Here are two tools from Faculty Focus (May 6, 2019) that may help:

Adobe Spark Adobe Spark is a web and mobile based tool that allows users to design visual content in the form of posts, videos, and web pages. It has three components: spark post, spark video, and spark page. Spark post creates a visual storyboard that represents what the user is desiring to convey. With spark video you can use images, video clips, and symbols to create a one-of-a-kind learning tool. The spark page allows you to insert pictures, videos, and text to curate content that reflects their unique perspective. Go to and sign up for a free account or download the mobile application via the iOS app store.

Remind A recent study examined the effects texting had on college students. Findings showed that students who received text message nudges from their instructors perform better than students who didn’t receive text message nudges. One tool/application that allows educators to communicate with students via text is Remind. Once you creates a course, students can sign up, send and receive messages by text, app, web, and e-mail. It is an excellent way of keeping students on track, even with a Learning Management System such as Blackboard, Canvas or Desire2Learn. Remind: (1) provides a way of communicating with students for any reason; (2) provides a method of communication to you and the students when life events happen; (3) is a great way of sending friendly reminders about assignments; (4) establishes a healthy student-to-teacher interaction regardless of whether the course is totally online or is a traditional face-to-face course. To get started go to and sign up for a free account.

Good OM Reading: Supply Chain Skills in a Digital Era

May 10, 2019

Rapidly evolving technologies are having a transformational impact on supply chains, writes EY’s short new report called Supply Chain: Skills for the Digital Era. Organizations are testing and applying emerging technologies such as robotic process automation, AI, augmented reality, internet of things and blockchain to drive higher performance across their supply chains. This increasing digitization and the resulting proliferation of data has provided supply chain professionals with greater insight. Platforms can now bring together data into a single ‘real time’ view while advanced analytics and AI can drive additional insight and automation. Such timely insight significantly improves business forecasting and decision making.

Businesses are trying to cope with shifts in demand, shorter product lifecycles and ever increasing innovation, and these technologies are enabling them to do this better. For example a UK National Health Service Trust used analytics to simulate and scenario model patient flows and staffing models to inform the physical design of a new hospital wing. We now have aircraft assembly workers using augmented reality googles to show them how to build the aircraft and IoT Sensors predicting when a piece of equipment will fail and proactively re-ordering it.

A major force impacting on the profession is the move to ‘always on’ supply chain.  It has seen supply chains move from monthly planning cycles, to making multiple decisions and changes throughout the day. Powered by real-time data, it enables scenario planning and informs daily decisions, for example, to change manufacturing schedules, modify an order that has already been dispatched or prioritize delivery to a high value customer.

This shift creates a new way of working for supply chain professionals.. Advances in supply chain technologies and supply chain concepts must be matched by advances in talent management capabilities. This includes accessing new sources of talent through the gig economy.


OM in the News: “Alexa, Manage My Warehouse”

May 8, 2019

As e-commerce order volume continues spiraling upwards while delivery windows shrink, warehouse workers need innovations to meet picking, packing and shipping goals, writes Supply Chain Dive (April 30, 2019). Speech recognition software and voice-directed applications have been used in warehouses since the late 1990s. Even with continued technological advancements, though, adoption is still relatively low. About a quarter of warehouses use voice-directed picking. Traditional voice-directed technologies with headsets and microphones are one solution. New uses of current voice technologies, like Alexa, are another.

Millennial workers are tech-savvy and like incorporating technology in their jobs. They’re used to smart speakers with consumer applications like Google Home and Amazon’s Echo and Alexa, and the voice systems have similarities. Efficiency is important because individual customers and businesses expect their products to arrive more quickly than in the past. And there’s an increased number of small orders. Instead of a business receiving cases of product on a full or mixed pallet once a week, they’re getting multiple orders per week with individual products.

Those moving to voice-directed technology are often changing from hand-held radio frequency scanning devices. In doing so, they decrease the picking steps in the workflow from 9 steps to around 5 per pick. With spoken commands, there’s no need to hold a device, which must be put down during the picks. Workers no longer need to look at the device screen and use the keyboard to input or find information. The picks are more accurate because the voice system confirms the picker is at the right location and picked the right items. It increases productivity by 30-45%.

Classroom discussion questions:

  1. What are the advantages of voice systems in warehouse “picking”?
  2. What other advances have we seen in huge warehouses such as those of Amazon?



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