Category: Chapter Correlations

These posts are tied to specific chapters in the Heizer/Render/Munson OM books

OM in the News: Understanding Manufacturing AI Terminology

Walk into almost any operations and supply chain  meeting today and you’ll hear it:

“We should use AI for this.”
“Can we plug in an LLM?”
“Let’s add a copilot.”

Thanks to Industry Week (April  13, 2026) here is a guide to the AI vocabulary showing up in manufacturing and supply chain environments.

Machine Learning Machine learning uses historical data to detect patterns, improve predictions and support decisions. In real-world operations, that includes:

  • Demand forecasting
  • Inventory optimization
  • Predictive maintenance
  • Quality and anomaly detection

LLM (Large Language Model) LLM refers to systems that can read and generate human-like text. It processes and generates language based on patterns learned from large datasets. It shows up:

  • Summarizing supplier emails or RFQs
  • Drafting customer responses
  • Translating ERP data into plain language

LLMs don’t “know” a business unless connected to the firm’s data. Without that context, they can sound confident—but be wrong.

Copilots “Copilot” is one of the most overused—and misunderstood—terms. They are a layer that sits on top of a business system (ERP, CRM, email) to assist users in real time. It is useful for:

  • Suggesting responses inside email
  • Helping navigate ERP workflows
  • Recommending next steps

A copilot doesn’t replace a system—it improves how people interact with it.

Agents Agents move from assisting to acting. They are systems that can take a goal and execute steps to achieve it.

Examples:

  • Monitoring inventory
  • Detecting shortages
  • Reaching out to suppliers
  • Proposing or initiating reorders

Most agent-based systems are still early. They require strong guardrails and tight integration to work reliably in production environments.

Embeddings (The Quiet Connectors) Embeddings convert a company’s data into a format AI systems can understand and search. That’s what allows AI to:

  • Reference ERP data
  • Search internal documents
  • Provide context-aware responses

For operations students and faculty, the goal is not to become AI experts. It’s to understand the language well enough to ask better questions and identify where these tools can create real advantage.

OM in the News: Running a Factory on Recycled EV Batteries

Electric-vehicle startup Rivian has found an unusual power source for its Illinois car factory: old batteries from its own cars. Rivian is reusing EV batteries for energy storage—the largest repurposed-battery energy storage system for an automotive manufacturer in the U.S., says The Wall Street Journal (April 14, 2026).

Rivian’s operation will be the largest repurposed-battery energy storage system for an auto manufacturer in the U.S

Once completed later this year, Rivian’s plant in Normal, Ill., will draw electricity from more than 100 Rivian EV batteries in an area the size of a small parking lot. It will reduce Rivian’s dependence on the power grid during peak demand hours. It saves Rivian money on what it takes to run the plant.

“It reduces the demand on the grid, which is great. These batteries are already built,” said Rivian’s CEO. “We need to integrate them and connect them together, but that can happen quite fast. They don’t have to get imported from some other place.”

This is the latest example of the battery-energy storage industry boom in the U.S., where lithium-ion packs—not dissimilar to those in EVs—are increasingly used to power businesses, industrial facilities, residential zones and artificial-intelligence data centers.

The AI boom is part of what’s driving unprecedented energy demand in the U.S. Electricity prices around the country are rising so quickly that they are outpacing inflation, rising 4.5% between 2024 and 2025.

Many automakers, including Ford and GM, are retooling battery factories once meant for EVs to meet that demand, rather than let those facilities sit idle. Meanwhile, energy storage was the fastest-growing business last year for Tesla, which has long supplied batteries for residential and commercial power. The setup is expected to initially provide 10 megawatt-hours of energy, equivalent to about 1,000 home-energy battery storage units linked together.

Classroom discussion questions:

  1. What are the advantages and disadvantages of Rivian’s approach?
  2. How do other firms handle the energy demands from the AI boom?

OM in the News: UPS Turns to RFID

United Parcel Service is rolling out technology to more closely track the billions of small packages that move through its U.S. network each year, reports The Wall Street Journal (April 15, 2026).

UPS has invested $100 million to date to set up RFID technology across its network

The company said the change will increase visibility throughout its small-package delivery network, while increasing delivery accuracy and reducing the manual labor needed to scan individual parcels.

“What this does is it offers our customers real-time, near real-time, visibility of where their packages are at within our network,” said a UPS exec.

The capability is a step beyond the shipment-tracking information widely used today, which relies on workers scanning bar codes as packages enter and leave warehouses or vehicles. That tracking point typically lags behind a package’s current location, leaving gaps in visibility where packages may be misplaced or lost.

UPS is now embedding RFID tags into shipping labels and has installed RFID sensors on all its U.S. delivery trucks, at its more than 5,500 retail stores and in its final-mile delivery centers.

The technology allows UPS to automatically sense and track when a package crosses a threshold into or out of a building or vehicle. That will give customers a more up-to-date, accurate picture of where packages are, though it does not include real-time location tracking.

The company in part uses the technology to identify what it calls misloads, where packages are loaded onto the incorrect delivery truck. The RFID tag on a given package sets off a sensor as it’s loaded into a delivery truck and makes a noise indicating if the package is on the wrong vehicle.

UPS said misloads have dropped near 70% since it started using the technology in 2024, and that the RFID technology will eliminate about 20 million manual scans per day.

The high cost of individual tracking devices and the complexity of small-package delivery networks have limited tracking technology to more industrial applications as well as shipping high-value goods such as healthcare products, electronics and luxury items. UPS said the cost of RFID tags has come down to a few cents each, allowing the company to deploy the technology at scale.

Classroom discussion questions:

  1. What are the advantages and disadvantages of RFID?
  2. Why are misloads to be avoided?

Guest Post: Why the Union Pacific – Norfolk Southern Merger Could Reshape U.S. Rail

Temple U. Professor Misty Blessley looks at an important logistics issue.

Union Pacific (UP) and Norfolk Southern (NS) are seeking Surface Transportation Board (STB) approval to merge into what would become the first true coast- to-coast Class I railroad in the United States. A Class I railroad is a freight carrier generating more than $1 billion in annual revenue.

A unified UP–NS network could eliminate thousands of daily railcar and container handlings, reduce chokepoints, and create a more fluid national network. For shippers, that means fewer delays, lower inventory carrying costs, and more predictable inland flows from ports.

The UP–NS merger would follow the 2025 Canadian Pacific–Kansas City Southern (CPKC) merger, which created the first single-line railroad connecting Canada, the U.S., and Mexico. But CPKC is significantly smaller than either UP or NS.  CPKC has 51,065 cars online, compared to 304,481 for Union Pacific and 162,339 for Norfolk Southern.

The combined railroad would reshape east–west freight flows. However, the massive scale underscores why the UP–NS proposal is drawing scrutiny.
A major part of the railroads’ argument is competitive pressure from long haul trucking. Motor carriers win when shippers need speed, flexibility, and door-to-door simplicity. If the merged railroad can reliably cut one to two days from cross country moves, rail becomes a more credible alternative to truckload.

The STB has ordered Union Pacific and Norfolk Southern to submit full internal documents so regulators can verify the merger’s promised benefits. While the Board is not an antitrust agency in the traditional Department of Justice sense, it is responsible for evaluating whether a merger would reduce competition, create market dominance, or harm shippers. The STB is “getting all the facts and elevating transparency in agency decision making.” For now, only time will tell.

Classroom Discussion Questions:
1. Would you allow the merger given its potential benefits and its potential risks to competition? Why?

2. In Example S4 of Chapter 11 in your Heizer/Render/Munson textbook, Transportation Mode Analysis, Daily Cost of Holding shows how time is money. How does a shipper benefit financially when transit times improve?

Good OM Reading: The Algorithm– How Tesla Drives Innovation

Elon Musk calls it “the algorithm,” a distillation of lessons learned while relentlessly increasing production capacity at Tesla’s Nevada and Fremont factories.  And anyone can tap into the powerful management techniques behind Elon Musk’s success. At least that’s the thesis of a new book by former Tesla President Jon McNeill.
“The Algorithm” argues there are five steps that explain how Musk wants his teams at the electric-car company and rocket-maker SpaceX to operate.  “Much of the genius in Musk’s companies come from the legions of smart people empowered by the Algorithm,” McNeill writes. “They’re chasing stretch goals with free license to question everything and innovate boldly.”

 

The 5-Step Operational Algorithm is a structured approach to decision-making, innovation, and efficiency used at Tesla, SpaceX, and other Musk firms. It consists of these 5 sequential steps: 

  1. Question Every Requirement– Identify the origin of each requirement and challenge its necessity, regardless the rank of the person making the recommendation. The goal is to make requirements less “dumb” and ensure they serve the final objective.

  2. Delete Any Part or Process You Can– Remove unnecessary steps or components. Musk emphasizes that if you donot occasionally cut back at least 10%, you likely haven’t deleted enough. 

  3. Simplify and Optimize– Focus on improving only what remains after deletion. Avoid optimizing  processes that shouldn’t exist. 

  4. Accelerate Cycle Time– Speed up processes only after simplification and optimization, ensuring efficiency without reinforcing unnecessary steps. 

  5. Automate Last– Implement automation only after all prior steps are completed to avoid automating inefficiencies.

 

 

OM in the News: Delta’s Vertical Integration Risk Pays Off

Vertical integration is an interesting topic in Chapter 11 of your Heizer/Render/Munson text. There are plusses and minuses, and we warn: “Most organizations are better served by concentrating on their own specialty and leveraging suppliers’ contributions.”

But Delta Air Lines, facing billions of dollars of pain at the fuel pump (because of Iran’s blockage of the Straits of Hormuz) along with all the other carriers, is unique. It happens to own its own gas station, writes The Wall Street Journal (April 10, 2026).

Jet-fuel prices have roughly doubled since late February, pushing up airlines’ costs.

Since 2012, Delta has been the owner of a Pennsylvania refinery that processes crude into fuel. Over the years, the investment has looked like either a stroke of genius or a boondoggle, generally depending on the price of oil. Since the U.S. and Israel began carrying out strikes on Iran, the refinery is set to pay off again for Delta. With it, Delta has an asset that can help it offset some of the recent surge in fuel prices.

Energy experts rolled their eyes when Delta plunked down $150 million for the refinery. If the plant was such a good investment, why was ConocoPhillips, its previous owner, shutting it down? Rival airline executives scoffed that they would benefit from increased jet-fuel output on the East Coast without the headaches of refinery ownership.

Now even United, one of Delta’s top rivals, has acknowledged that the refinery benefits Delta. Its CEO Scott Kirby states: “Right now the crack spread (the gap between the price of jet fuel and the price of crude oil) is much higher…and so they’ll get real benefit from the higher crack spread that will be unique to them.”

Delta has said that the refinery makes an operating profit most years. The airline has said owning the refinery insulates it from supply disruptions in the Northeast and helps mitigate risk from volatile prices—effectively lowering its jet-fuel costs, often by several cents a gallon. In 2022, when fuel prices surged after Russia began its invasion of Ukraine, the refinery helped it save $785 million.

But the airline has had to pour money into the plant, which is more than a century old, to keep it running smoothly, investing $1.6 billion in capital expenditures over the years.

Classroom discussion questions:

  1. Did the purchase make sense for Delta?
  2. Many economists think the refinery was a costly mistake. Why?

OM in the News: Weight-Loss Drugs Crush Food Demand as Farmers Face Dumping Mountains of Potatoes

The rising popularity of weight-loss drugs like Ozempic, Wegovy, and Zepbound (GLP-1 agonists) is significantly impacting the food industry, resulting in reduced food demand, changes in consumer purchasing habits, and potential surpluses for agricultural producers, according to Fox News (April 1, 2026).

 

Impact on Food Demand and Consumption

  • Reduced Overall Demand: Users of weight-loss drugs often eat less and report a decreased appetite, with some users consuming up to 50% less than before taking the medications.
  • Andy Goodacre has about 1.3 million pounds of top-quality potatoes at risk of going to waste because of changing diet habits

    Surplus Agricultural Products: Farmers, particularly in the United Kingdom, are facing challenges with rising surpluses of traditional staples, such as potatoes, as consumer demand declines.

  • Shifting Restaurant Trends: Restaurant owners report that customers are ordering fewer items, selecting lighter options, and often not finishing their meals, leading to a decline in overall food sales at restaurants.
  • Impact on Packaged Goods: Food companies, including snack manufacturers, are evaluating the long-term impacts of these drugs on consumer purchasing behavior for high-sugar or less-healthy items.
Changes in Eating Habits and Nutrition
  • Reduced “Food Noise”: Users report decreased cravings for alcohol, salty snacks, and high-fat foods, which is reshaping American tastes and reducing demand for ultra-processed foods.
  • Focus on Healthier Options: Many users are pivoting towards healthier, lower-calorie options, and in some cases, increasing their intake of protein to combat muscle loss.
  • Concerns About Malnutrition: Some researchers are flagging potential risks of malnutrition and micronutrient deficiencies, as reduced food intake can limit the intake of necessary nutrients.
Future Projections
  • Long-Term Industry Shift: By 2035, it is projected that 9% of the U.S. population may be on weight-loss drugs, which could lead to a sustained, significant reduction in the consumption of soft drinks, alcohol, and snacks.
  • Adapting the Food Sector: The food industry is beginning to adapt by considering adjustments in portion sizes and developing products that align with the dietary needs of GLP-1 users.

    Classroom discussion questions:

  • 1. What forecasting approaches do the farmers and restaurants need to consider?
  • 2. How should a firm like Frito-Lay address this issue?

OM Podcast #48: Cold Storage, AI, and the Future of Industrial Facilities

In this episode of the Podcast, Professors Barry Render and Misty Blessley sit down with David Aschenbrand, Executive Managing Director at Newmark, to explore how cold storage and temperature‑controlled facilities are evolving in today’s operations and supply chain environment. Drawing on his background across logistics, transportation, warehousing, and industrial real estate, David explains how cold storage facilities support food, pharmaceutical, and other temperature‑sensitive supply chains, and what clients look for when developing or operating these specialized buildings.

The conversation highlights how facility design decisions—such as location, building footprint, dock configuration, and proximity to ports—can directly affect labor availability, transportation efficiency, and long‑term operational performance. David shares insights on the growing role of automation and AI in industrial facilities, while emphasizing the continued importance of skilled trades and hands‑on roles that support these operations.
The episode concludes with a discussion of what rising labor costs mean for cold storage operators. Together, the hosts and guest offer a practical look at how operations management, facility design, workforce trends, and technology intersect in modern cold chain and warehouse environments.

 

TRANSCRIPT LINK
A Word document of this podcast will download by clicking the word Transcript above.

Prof. Barry Render
Prof. Misty Blessley
Dave Aschenbrand

Have you subscribed to this podcast on Apple Podcasts?
Just open your Apple Podcasts app, search “Heizer Render Munson OM Podcast,” and subscribe to get our newest episodes as soon as they’re released!

 

Instructors: assignable auto‑graded exercises using this podcast are available in MyLab OM. To learn more, view our earlier blog post featuring Chuck Munson or contact your Pearson representative: Find your rep

OM in the News: America Now Has an EV Rust Belt

At first, North America’s biggest auto-parts supplier was thrilled to snag the job of making enclosures for the batteries in GM’ new electric pickup. The contract was so big—and promised to be for years to come—that Magna International built a new  $575 million factory in a Michigan cornfield. And Michigan even offered a $44 million incentive package to draw the promise of new jobs–a topic in Chapter 8.

Five years later, that million-square-foot plant is mostly empty and losing money, a casualty of America’s messy breakup with EVs, reports The Wall Street Journal (April 1, 2026). It is one of dozens of now desolate EV parts plants across the country. It can take years to pivot a factory and supply chain from one type of vehicle to another. And it would take 4-6 months of higher gas prices for most Americans to reconsider more fuel-efficient vehicles– an unlikely prospect. Detroit automakers have scrapped their boldest EV dreams—and are looking beyond $50 billion in charges tied to broken supplier contracts and wasted investments.

The deserted Magna factory in St. Clair was expected to stay busy for years.

Magna, which has more than 300 factories around the globe and parts in nearly every car on the road today, has been left holding the keys to the St. Clair, Michigan  building that is bigger than 20 football fields. The Canadian company needs to find a second life for the factory and the hulking rows of assembly-line robots. A few years ago, Magna had plans to build an entirely new business unit around EV battery enclosures.

The EV slide is reverberating through the automotive industry’s sprawling supply chain. Multinational companies such as Magna, Dana and BorgWarner slashed jobs and closed plants due to the EV pullback, while a string of smaller manufacturers shut down altogether. Last year, more than $20 billion in previously announced investments in EV and battery facilities were wiped out.

Smaller suppliers have little recourse to recoup costs when automakers cancel a vehicle program and stop buying parts. They typically absorb the upfront cost of setting up an assembly line with the expectation of recouping it over time as parts are shipped. GM’s supplier contracts were struck with the expectation that GM would be building one million EVs a year. By December, 2025 the company was selling around 8,000 a month.

Classroom discussion questions:

  1. Discuss the typical incentives offered to attract a new plant.
  2. Why has the EV trucking business been especially hard hit?

 

 

OM in the News: AI’s Big Manufacturing Productivity Gains

The efficiency and productivity improvements AI can deliver through automation and digitalization will help bridge manufacturing’s workforce gap, writes Industry Week (March 13, 2026).

Similar to the PC revolution decades ago, all signs point to AI following suit with enhanced productivity and profitability. Productivity soared when PCs became interconnected across organizations. Manufacturing will see the same breakthrough with “embedded AI”—to help ease workforce bottlenecks with specific solutions. On the shop floor, for example, predictive-maintenance AI (see Chapter 17) can analyze sensor data to forecast equipment failures and avoid labor-sapping downtime.

AI vision systems (Chapter 7) can catch defects on production lines at a pace beyond human capabilities and without the repetition-induced fatigue and employee turnover. Collaborative robots (cobots) and automated mobile robots transport material and can assist with assembly and repetitive operations. AI’s coding capabilities extend to numerical control and other industrial equipment, speeding up setup time and productivity in hard-to-fill technical positions.

The interaction of embedded AI, agent-based AI, and machine learning across different areas of an organization holds the greatest promise in solving long-term labor shortages. AI can already let a customer snap a photo of a damaged part and identify it for replacement. Its real power will manifest when AI can also determine the part’s inventory status and locations, establish shipping terms and timing, add the part to the procurement queue to replenish once it’s sold, alert engineering that a design change for a chronic defect may be in order, and propose alternative designs.

Here is a  current example involving AI across systems: the big  semiconductor company AMD is using generative AI to track down the root cause of delivery delays, simplifying complex supply chain interactions to transform a complex, specialist-dependent, labor-intensive manual process into faster issue resolution and better decision-making. The system cuts the time needed for what was a 14-step process taking 20-30 minutes by 90%, saving more than 3,100 staff hours a year.

Also coming soon to these intelligent product recommendation engines is an ability to parse what can be 50-page tender documents to extract multiple configurable products for sales quotes. That not only saves time, but also enables junior staff to handle work that has previously required experienced hands.

Classroom discussion questions:

  1. What can AI do to improve a procurement system?
  2. What does “embedded AI” mean?

Guest Post: The Two Stories of Tesla’s Solar Panels

Temple U. Professor Misty Blessley provides interesting blog topics monthly.

In our 2023 OM blog, New York State Built Elon Musk a $1 Billion Factory, we learned that building a solar panel facility was “a bad deal” for NY. The state built a massive plant and provided solar-panel manufacturing equipment. Tesla’s end of the deal was to churn out enough solar-panel shingles by 2020 to cover 1,000 roofs on a weekly basis.

These solar panels are finally on the verge of materializing, and with this are two stories. One connects Tesla’s long game in vertical integration and the other is New York’s long-delayed economic vision.

Tesla’s Long Game in Vertical Integration
Tesla’s new residential solar panels fill the company’s missing piece. The firm was missing the energy generator (aka solar panel). Despite the solar factory in New York, Tesla spent years relying on third-party suppliers for its solar panels. Now, it can fully optimize performance across the entire home energy stack. Tesla can vertically integrate the full chain from generation (solar panels), to conversion (inverter), to storage (Powerwall), and to consumption (EV charging).

New York’s Long-Delayed Economic Vision
This pivot finally gives New York its payout. By bringing solar panel manufacturing in-house, Tesla is delivering the kind of industry and employment the state originally hoped for. The region, once defined by its industrial decline, gains a foothold in the clean energy manufacturing economy. The move aligns with federal and state incentives that reward U.S.-made components, strengthening the economic logic behind NY’s investment. Tesla’s shift toward a unified home energy ecosystem mirrors the vision that justified the state’s $1 billion bet. The factory, once criticized as a stranded asset, now becomes the manufacturing backbone of Tesla’s residential energy strategy.

Tesla didn’t just release new solar panels. It connected the car in the driveway to the sun, and in doing so may have finally delivered the manufacturing story NY was waiting for.

Classroom Discussion Questions:
1. How is vertical integration good for Tesla? For Tesla owners? To compare this to an internal combustion engine, it is somewhat like having petroleum, a refinery and a gas pump in the garage or driveway.

2.  Knowing that Tesla’s occupation of the Buffalo facility is long overdue, what stipulations should a city or state impose on a firm when incentivizing a location decision to the tune of $1 billion?

OM in the News: Amazon Goes Rural

In dozens of thinly populated regions across the country, Amazon is building new delivery hubs to deliver packages in around 2 days. That might not seem especially rapid at a time when the e-commerce giant is introducing one-hour delivery in some areas, but residents of some far-flung Montana hamlets were used to waiting up to a week for their orders. It is part of a $4 billion investment by Amazon to push its signature speedy delivery further into the rural recesses of the U.S., writes The Wall Street Journal (March 22, 2026)

An Amazon driver taking a photo after dropping off a package in Connor Montana

The effort helps Amazon reduce its reliance on the U.S. Postal Service, a relationship that has become rocky following a dispute over contract terms. Amazon says it aims ultimately to have 200 rural delivery hubs serving around 13,000 ZIP Codes covering around 1.2 million square miles of America—an area the size of Texas, California and Alaska combined.

Delivering packages within Amazon’s signature 2-day frame means drivers contend with backcountry challenges such as bighorn sheep on the road, dangerously high winds in mountain passes and roads that are impassable during parts of the year.

Over the past decade, Amazon has expanded from major cities to regional urban centers by drawing ever larger circles of coverage. That is now allowing the company to lean on those urban hubs to speed up deliveries in ranch country. There are signs that Amazon customers in remote areas are just as likely to get hooked on speedy delivery as city slickers.

Amazon is experimenting with speedier delivery across its network as it competes with longtime rival Walmart and delivery upstarts such as Uber and DoorDash. In urban areas, the company has started offering 1-hour and 3-hour delivery as premium options. Amazon recently acquired a Swiss startup called Rivr, which is building 4-legged robots that could drop packages off on doorsteps. The e-commerce giant is also dipping its toe in the big-box retail business, with plans for a 230,000-square-foot megastore outside Chicago.

Classroom discussion questions:

  1. What are the complications in trying to serve remote locations with 2-day delivery?
  2. Why does the firm think the extra expenses will pay off?

OM in the News: Six Jobs From the 1950s That Barely Exist Today

The U.S. workforce has transformed dramatically since the 1950s, a decade marked by economic prosperity, suburban expansion, and rapid industrialization, writes History Facts. Some careers that may have seemed stable and essential then, but time, technology, and changing needs have made them and many others all but disappear. Here are 6 jobs that were popular in the 1950s but are now nearly extinct.

Telephone Switchboard Operator. Before direct-dial telephone systems took over, switchboard operators were the backbone of communication, ensuring calls reached the right destination. In the 1950s, the U.S. had about  1,342,000 telephone switchboard operators. It was a demanding job that required quick reflexes. By the 1970s, automated dialing systems phased out the need for human operators.

Milkman. Having fresh milk delivered to your doorstep was once a common part of American life. The local milkman made rounds, leaving glass bottles on doorsteps and retrieving empty ones. This service was necessary before the widespread adoption of home refrigeration. By 2005, this number had dwindled from over 50% of homes  receiving delivery to just 0.4%.

Elevator Operator. In the mid-20th century, elevator operators were essential for manually controlling elevators in department stores, office buildings, and hotels. At its peak, the profession employed more than 90,000 workers. Only a few historic buildings still employ operators today, for nostalgia.

Typist. Secretarial jobs became essential during the Industrial Revolution, as businesses generated more paperwork than ever before. By 1950, secretarial work had become the most common occupation for women, with 1.7 million employed.  While secretarial roles still exist today, the number of workers specifically categorized as “word processors and typists” has declined to 37,200.

Motion Picture Projectionist. Projectionists played a vital role in the moviegoing experience in the 1950s, operating and maintaining film projectors in theaters. By 2013, 92% of movie theaters had made the switch to digital projection. In 1950, 26,000 people were employed as projectionists. By 2023, that number had fallen to 2,610.

Gas Station Attendant. Full-service gas stations were the standard in the 1950s, with attendants pumping gas, checking oil levels, cleaning windshields, and inspecting tire pressure. The 1973 oil crisis, which led to soaring gas prices, accelerated the transition to self-service as both businesses and consumers sought cost-saving measures. (Today, New Jersey is the only state that prohibits drivers from pumping their own gas).

Classroom discussion questions:

  1. What jobs that exist today do you think will be extinct in 20 years?
  2. What new jobs have been created in this past 1/2 century?

Guest Post: Rita’s Italian Ice and Seasonality

Prof. Howard Weiss shares his interest in Italian ice with us today, March 20th, the first day of Spring.

Rita’s Ice represents an example of seasonal operations, illustrating both the challenges and opportunities due to demand variability. Founded in 1984 in a Philadelphia suburb, the company has expanded to nearly 600 franchises across 463 cities in 30 states, becoming the largest Italian ice franchise in the U.S. Despite this growth, Rita’s core product offerings—Italian ice and frozen custard—remain strongly associated with warm-weather consumption. 

Most Rita’s locations operate as walk-up or drive-through outlets, opening by March 1 and closing no earlier than the third Sunday in September. This operational model results in an important inefficiency: franchisees incur fixed costs, particularly rent, for all 12 months while generating revenue for only about seven. Supplement 7 of your Heizer/Render/Munson textbook suggests developing complementary products with countercyclical demand– such as  jet skis and snowmobiles– thereby using the same resources all year long.

However, Rita’s appears to be considering an alternative approach—extending operations year-round. This shift reflects evolving consumer behavior, as frozen desserts such as ice cream increasingly exhibit steady demand even in colder months, particularly in warmer climates or high-traffic retail environments like shopping malls. By remaining open throughout the year, Rita’s could better leverage its fixed assets and enhance brand visibility. But this strategy would require careful demand forecasting and possibly localized adaptation, as consumer preferences in colder regions may still exhibit too much seasonal sensitivity to make it worthwhile to open all year.

From a production standpoint, Rita’s must also manage perishability constraints. Cream, a primary ingredient in frozen custard, necessitates reliance on local distributors to ensure freshness. Additionally, custard is discarded after 36 hours, underscoring the importance of accurate short-term demand forecasting and inventory control. Rita’s maintains a consistent gelato formula across franchises, it offers over 60 flavors, rotating them based on popularity data. This approach balances operational consistency with responsiveness to consumer preferences.

Finally, beginning in 1984, Rita’s has marked the beginning of Spring by offering free Italian Ice. This longstanding tradition on the first day of spring—March 20 this year—serves as an effective promotional tool. The initiative not only marks the seasonal reopening of many locations but also reinforces brand loyalty and drives customer engagement.

Classroom Discussion Questions:

  1. Name two products or services with complementary seasonal demands. 
  2. How would you determine if the demand for ice cream is high enough in the winter to warrant staying open all year?

 

OM in the News: FedEx Is Planning an AI Agent Workforce

FedEx is building out an army of AI agents to work alongside its human workforce, positioning itself to tap the latest wave of technology crashing through corporate America, reports The Wall Street Journal (March 13, 2026).

The shipping giant, which already deploys artificial intelligence in software development and other areas, is now looking to drive AI agents further into operations, including network planning and business processes. By 2028, FedEx expects to have AI integrated into more than half of its core operational workflows.  FedEx is currently focused on setting up the underlying data and management foundation to oversee its AI bots.

Though logistics providers like FedEx are aiming to adopt AI, they’re grappling with challenges like managing numerous, disconnected data sources. “Logistics can be very fragmented—especially if you think of a global organization with their network being everywhere, it makes it difficult to standardize,” said an industry consultant.

As its underlying tech is completed, FedEx expects to roll out AI and AI agents that connect macro and microeconomic trends to better plan its network. In marketing and campaign management, FedEx will create a hierarchy in which there’s a “manager agent,” an “audit agent” and a “worker agent.” The goal of the hierarchy is to ensure that the agents have a trail of accountability for their actions.

At the moment, FedEx’s enterprise data platform, called Atlas, supports more than 200 AI use cases across the supply chain, commercial teams and enterprise functions. It has already turned on AI agents in areas such as software development, where they are developing and testing code. In operations, agents are helping customers clear customs more quickly.

Plans for FedEx’s AI agents also involve getting its humans ready to interact with the technology. the company just launched an AI education program for 300,000 of its employees, as well as a more advanced version for its technology workers. Each employee received a customized training depending on their role. FedEx says it doesn’t plan for those agents to replace its workers.

Classroom discussion questions:

  1. Why is FedEx pushing for more AI agents?
  2. How will agents be used in operations?