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OM in the News: Score One for Hydrogen

August 9, 2017

Fuel-cell-powered warehouse forklifts gaining on electric

Ever since a Swiss inventor named François Isaac de Rivaz built the first hydrogen-powered automobile in 1808, inventors and futurists have pinned their dreams and fortunes on the clean technology that converts water to energy. But hydrogen never caught on as a fuel, mainly because of its relatively high costs.

“Now, thanks to the thriving warehouse networks of online and big-box retailers, hydrogen has found a place inside growing fleets of forklifts,” reports Businessweek (Aug. 7, 2017). The numbers work out: Although a forklift outfitted with a hydrogen fuel-cell pack costs up to $58,000 — about twice as much as one with a standard lead-acid battery — hydrogen models are 10% cheaper over the 10-year life span of an average forklift. That’s because they can be charged in minutes instead of hours, eliminating the labor cost of charging batteries, freeing up warehouse space and keeping goods flowing around the clock.

Fewer than 3% of the 600,000 forklifts used in U.S. warehouses run on hydrogen, but that number is growing. Amazon recently agreed to try out the technology in forklift fleets at 10 of its warehouses. And last month, Wal-Mart matched Amazon’s $600 million deal, committing to double, to 58, the number of its warehouses that use forklifts running on hydrogen cells.

Fuel-cell companies are also pushing beyond forklifts, using hydrogen to power buses, delivery trucks and drone aircraft. In each of those markets, the vehicles return to a central depot for refueling, eliminating the need for a sprawling network of hydrogen stations.

If you are covering Supplement 5, Sustainability in the Supply Chain, this is a perfect real life example to illustrate Life Cycle Ownership (see Example S2).

Classroom discussion questions:

  1. How can the operations manager decide which forklift is the best choice?
  2. What are the advantages and disadvantages of hydrogen-powered vehicles?

 

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