Category: Chapter 11

Posts relating to Chapter 11

OM Podcast #46: Logistics, Circularity & Vertical Integration at East Penn Manufacturing

In our latest podcast episode Barry Render and Misty Blessley speak with Harry Ziff, VP of Corporate Logistics at East Penn Manufacturing, one of the world’s largest lead‑battery producers. Harry shares highlights from his 37‑year supply chain career and explains how East Penn’s unique structure allows it to excel in reliability, sustainability, and customer service.

Harry discusses East Penn’s deep vertical integration, including in‑house lead refining, plastic molding, and battery case manufacturing. He also describes the company’s closed‑loop recycling system, where nearly 100% of batteries are collected, processed, and reused.  The episode also dives into East Penn’s large private fleet, which enables direct‑store delivery, consistent service, and strong customer relationships.

TRANSCRIPT LINK
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Prof. Misty Blessley
Prof. Barry Render
Harry Ziff

 

 

 

 

 

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OM in the News: The Memory-Chip Shortage

Memory is one of the tech world’s most ubiquitous and essential components that come in 2 major types. DRAM handles more fleeting, immediate tasks like using apps. The other kind, called NAND flash memory, provides long-term storage for photos, videos and other data. And there has been a 7-fold increase in contract prices for DRAM and NAND flash in the past year.

Facing soaring memory-chip prices, the world’s biggest electronics companies are staring at a list of unpalatable responses:(1) charging consumers more, (2) eating the costs or (3) rejiggering product specs. Such is the supply-chain disruption wrought by the global drive into AI, which requires fleets of data centers with servers needing gargantuan amounts of memory, reports The Wall Street Journal (Feb. 13, 2026). 

The memory crunch comes at an inopportune time for companies like Nintendo.

That has caused supply to dry up for the makers of smartphones, PCs, gaming consoles and various other electronic gadgets, and triggered a historic price uptick since early last year that is higher than any increase seen before.

Dell has raised prices for some commercial laptops by as much as 30%, while budget PCs from rival Acer now carry several gigabytes less of multitasking memory. Chinese smartphone maker Xiaomi recently discontinued the lower-memory variant of its new midtier device and raised prices. To summarize: A tough year for smartphones, PCs and game consoles is getting worse. Projected shipment declines are now stumbling deeper. PCs, with memory representing as much as 30% of their total costs, are particularly vulnerable.

With investments into AI infrastructure remaining hot, the prospects of memory prices falling soon don’t appear high. Supply is expected to remain tight through 2028.

Classroom discussion questions:

  1. What is the underlying issue?
  2. What can manufacturers of PCs, smartphones, and game consoles do to protect themselves?

 

Good OM Reading: Supply Chains as a Source of Competitive Differentiation

A new report from the Kearney consulting group (Feb. 4, 2026), called The Top Five Supply Chain Bets for 2026, concludes that as customers punish inconsistency faster than ever, companies that can deliver reliability will expand market share. Kearney offers this analysis:

This forces a shift from one supply chain to a portfolio of capabilities designed around distinct value propositions including speed, reliability, customization, cost-to-serve, and compliance. Where commercial commitments are made in isolation from operations, the consequences surface later through margin erosion, excess inventory, and lost customers.

Supply chain becomes the operating core of the customer promise, and leadership must be explicit about where it will overperform and equally clear about where performance ambition can be more modest by design.

Leading organizations are becoming more deliberate about how they serve each channel, market, and customer, including the trade-offs required and their operational implications. Align those choices with differentiated supply chain capabilities for each segment and translate them into targets for the core KPIs (service, cost, cash, risk). Finally, leverage the integrated planning and execution process to deliver consistently against those objectives.

Another area of concern is AI as it moves along the continuum from experimentation to earnings impact. Kearney offers the following analysis:

In 2026, many pilots will fail to progress beyond experimentation. The root causes are predictable: unclear value cases, poor data quality, fragmented technology stacks, and pilots that were never designed to scale.

AI in supply chains needs to be treated as an industrial capability, with clear ownership, governance, monitoring, and integration into day-to-day processes. Organizations that remain in experimentation are accumulating prototypes and skepticism, while those that focus are translating AI into measurable improvements in cost, cash, service, and risk.

Leading organizations are managing AI use cases as a portfolio, with explicit scale and stop gates. A small number of use cases that materially affect service, cost, cash, or risk are being industrialized, while others are time-boxed with clear exit criteria. Investment is concentrating on priorities with the highest enterprise impact, including decision speed, resilience, and sharpening competitive supply chain advantage.

Classroom discussion questions:

  1. How might AI be used in supply chain management?
  2. Why does Kearney think supply chains are becoming the source of competitive differentiation?

OM Podcast #45: Inside Purchasing at Temple University

In our newest podcast episode, Barry Render and Misty Blessley sit down with Donna Schweibenz, former Senior Director of Purchasing at Temple University, for a fascinating look inside one of higher education’s most complex operational functions.

Donna brings 26 years of experience leading a centralized purchasing department responsible for everything from office supplies to cadavers for medical training—yes, cadavers! She shares how universities must navigate wide‑ranging procurement categories, strict compliance requirements, and unexpected challenges that arise even from seemingly simple purchases.

In this episode, Barry, Misty, and Donna discuss:

  • The sheer variety of goods and services a major university must procure, and the challenges the centralized purchasing team faces.
  • The creation of a three‑university purchasing alliance between Temple, Penn State, and Pitt, and how collaboration led to better pricing and efficiencies.
  • What people often misunderstand about purchasing, including bid thresholds, contracts, warranties, lead times, vendor vetting, and how essential communication is to prevent operational issues.

 

TRANSCRIPT LINK

Donna Schweibenz

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

Prof . Misty Blessley
Prof. Barry Render

 

 

 

 

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Teaching Tip: Advice to Your Supply Chain Students

 

Prof. Darrell Edwards

Darrell Edwards, supply-chain professor at U. Tennessee and former COO of La-Z-Boy, shares professional wisdom for new graduates in Industry Week (Jan. 14, 2026). Darrell was also our guest on OM Podcast #37, speaking on the topic of global supply chain vulnerabilities.

  1. Build a Plan To efficiently increase your early career success, have a plan.  List your career goals for the first year and your objectives for assimilating successfully into your supply chain role.  A widely cited study on goal setting says, “you become 42% more likely to achieve your goals and dreams simply by writing them down on a daily basis.”  Regardless of your career objectives, put your goals on paper, set timelines for their achievement, and review and access them frequently.

2. Attitude Matters Most  Most companies will hire and promote aspiring leaders who collaborate well and are good team players with a “can-do” attitude.  Of course, you must possess basic managerial and leadership skills, but having a positive attitude goes a long way. Standout qualities could include always coming to work early or typically being the first to volunteer for a necessary but unglamorous project.  Companies promote attitudes.

3. Take a Line Job Don’t be afraid to take a job in a warehouse, a factory, or in a logistics hub; it will help accelerate your supply chain career. These skills are critical if you aspire to lead within a supply chain. It’s unlikely you will be able to land a significant corporate role in supply chain leadership without having also worked a line job.

4. Know the Business It’s OK if you don’t know all the specifics of the business when you start a role; as a new leader, you’re not expected to. That doesn’t give you a free pass not to learn it, and quickly.  Refine your skills in areas you understand but aggressively throw yourself into supply chain functions where you are weak.

5. Find a Mentor.  A mentor can help shorten the cultural learning curve and help you navigate the company “landmines.”  A mentor is in the unique position to offer advice on what to do—and most important, what not to do.  That person can help you develop the right questions to ask and advise you on your career plan.

6. Deliver Results Whatever the task, you must be prepared to deliver results and work to develop a reputation for doing so. Reputations are built early in a career, and once built, they are hard to change.

 

 

OM in the News: Biggest Supply Chain Threats for 2026

 IndustryWeek (Jan. 12, 2026) outlines four critical events poised to significantly impact the supply chain this year based on a research study by Evergreen Analytics:

  • Geopolitical fragmentation and the strategic use of trade regulations.
  • Extreme weather intensification.
  • Critical infrastructure aging and failure.
  • Cyberattacks on logistics.

Geopolitical fragmentation and the strategic use of trade regulations, ranked as the most notable risk for 2026 supply chains, giving it a “threat level” score of 97%. Abrupt geopolitical shifts have the potential to upend political alliances, alter trade relationships, create regional uncertainties and disrupt logistics networks.

In addition, rapid tariff and policy adjustments have become the new normal for supply chain management. From 2023 to 2025, export controls that caused severe disruptions doubled, and other trade restrictions increased 167%.

The next risk, extreme weather intensification, was given a “threat level” score of 93%. As the frequency and severity of these weather events continues to climb, firms are encouraged to  advance climate modeling for procurement, supply chain and logistics operations. They should also prioritize geographic diversification, increased inventory buffers and flexible logistics networks that can rapidly reroute around weather-impacted areas..

Third, critical infrastructure aging and failure, received a “threat level” score of 81%. Compromised infrastructure and transportation networks, combined with the previous risk of extreme weather, pose a real threat to supply chain operations. The Infrastructure Moment report by McKinsey & Company estimates that $106 trillion in investments, including $36 trillion for transport and logistics, will be needed to meet the need for updated infrastructure through 2040.

It is predicted that at least one multibillion dollar disruption because of failing infrastructure will occur this year. This implies that supply chain managers must develop comprehensive infrastructure risk assessments that go beyond their immediate suppliers to include the broader transportation and utility networks their operations depend on.

Lastly, cyberattacks on logistics sits at a “threat level” of 70%. Between 2021 and 2025, there was a 965% increase in attacks on logistics operations. It is  projected that cyberattacks on logistics operations will double this year. The five industries that experienced the most cyberattacks last year are: Manufacturing, Electronics,  Automotive,  Food & Beverage, and Logistics.

Classroom discussion questions:

  1. Compare these threats to supply chains to the ten discussed in Table 11.4 (page 474) in your Heizer/Render/Munson text. Which match?
  2.  Why do you think geopolitical issues is ranked first in this study?

 

Guest Post: From No Frills to Trendy Food, Fashion and Home, Walmart’s New Product Assortment 

Professor Misty Blessley, at Temple U., cohosts many of our podcasts, as well as sharing her insights with our readers monthly.

 Value retailer, Walmart, known for focusing on price-sensitive shoppers, has moved into premium products and broader brand assortments, with the goal of winning over customers with more buying power. Appealing to higher-income customers (those earning over $100,000), requires the firm to shift from a no-frills mindset. 

The firm remains committed to everyday-low-pricing (EDLP), thus it must continue managing this highly effective strategy while integrating broader lines. This requires a supply chain flexible enough to support both high-turn grocery and slower fashion and lifestyle products, for example. 

On the inbound supply chain side, Walmart diversifies its supply base to procure new products. As is outlined in Chapter 11 of your Heizer/Render/Munson book, this requires identifying, vetting and selecting new suppliers as well as a host of supply-side tasks like vendor and contract management. 

Managing inventory requires additional adaptations. Walmart refreshed the look of its website and stores while avoiding alienating its historical customers. It did so by keeping flagship items in stores and premium lines at distribution centers. Chapter 12 outlines inventory concerns Walmart faces, from the importance of inventory record accuracy to strategies for managing inventory. 

On the outbound side, the firm’s e-commerce and fulfillment operations must be capable of satisfying wealthier customers, who often expect faster, higher-service delivery options, such as same-day delivery or premium curbside pickup. Meeting these expectations puts pressure on Walmart’s fulfillment network for more micro-fulfillment centers and localized inventory pools to reduce delivery times. Facility, inventory, and transportation cost trade-offs are also covered in Chapter 11.

Walmart is an exemplar in omnichannel retailing because it seamlessly integrates its physical stores, online platforms, supply chain, and last-mile services into a unified customer experience. Its customers purchase and receive products when, where and how desired. Walmart is offering frills next to its no-frills strategy.

Classroom Discussion Questions:

  1. How would you call upon Ch. 11 and 12 as a Walmart supply chain manager? 
  2. Some firms target different customer segments under different brand names. For example, Gap Inc. owns Gap, Old Navy, Banana Republic and Athleta. Walmart has chosen a different strategy. How is Walmart capable of serving its price-sensitive and wealthier customers under one brand?

OM Podcast #44: Inside the Cold Storage Industry with Dr. Anna Johnson

Happy New Year!  In our first episode of 2026, Professors Barry Render and Misty Blessley sit down with Dr. Anna Johnson, Vice President of Marketing and Commercial Strategy at U.S. Cold Storage, to explore the fascinating world of temperature-controlled logistics.

Dr. Johnson explains how third-party logistics providers keep America’s food supply safe and efficient, why 98% of U.S. food storage is outsourced, and how sustainability initiatives like anaerobic digestion are reducing food waste.

Prof . Misty Blessley
Prof. Barry Render

The conversation also dives into industry trends—from the surge in capacity during COVID to the current state of the market—and highlights how AI, robotics, and digital twins are transforming operations, and creating new roles for skilled workers in this evolving sector.

Dr. Anna Johnson

 

Read the full transcript

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Guest Post: Target Tests New Paths to Faster, Cheaper Delivery

 

Dr. Jon Jackson is Professor of Operations Management at Providence College. Jon has created AI classroom exercises for every chapter of our text. They are found in the on-line Instructor’s Resource Manual.

Target is experimenting with new fulfillment models as it tries to reverse a multi-year sales slump and better compete with Amazon and Walmart (The Wall Street Journal, Dec. 4, 2025). With online orders now making up nearly 20% of total sales, the retailer is searching for faster, cheaper ways to deliver packages while also improving in-store conditions for shoppers frustrated by clutter, stockouts, and long wait times. To do this, Target is piloting three distinct approaches in Chicago, Cleveland, and San Diego.

Chicago: Shifting Fulfillment Away from Busy Stores
In Chicago, Target stopped fulfilling next-day, ship-to-home orders from 18 of its busiest stores. Those orders are now handled in less busy locations. The result: delivery times sped up by about a day, shipping costs dropped to the lowest level among all Target markets, and stores became cleaner, better stocked, and less chaotic for in-person customers.

 Cleveland: A Dedicated Sortation Center
Cleveland is home to a new 40,000-square-foot sortation center operated by Ryder. Stores still pick and pack orders, but the sortation center batches them by neighborhood and hands them off exclusively to Shipt drivers. This frees store teams from the labor-intensive sorting process and enables more frequent pickups than national or regional carriers typically provide.

San Diego: In-Store Sorting for Local Delivery
In markets without a sortation center (e.g., San Diego), Target is testing a lighter-weight model. Stores sort brown-box deliveries in the backroom and hand them directly to Shipt drivers for local delivery. It’s a hybrid approach that allows next-day delivery without major new infrastructure.

Classroom Discussion Questions

  1. Which model seems most scalable for Target nationally, and which seems most context-specific?
  2. How might competitors respond if one of these approaches proves highly successful?

OM Podcast #43: An Interview with Mike Rich, VP of Supply Chain at American Water

In our latest podcast episode Barry and co-host Misty Blessly welcome Mike Rich, Vice President of Supply Chain at American Water, the largest regulated water and wastewater utility in the United States.

Mike Rich

Mike shares his fascinating career journey—from managing thousands of SKUs at Home Depot to driving strategic sourcing initiatives at Arizona Public Service—and how those experiences shaped his leadership approach today. The discussion dives into:

  • Building a customer-service mindset in supply chain
  • Challenges in talent acquisition and team growth
  • Negotiation strategies and risk mitigation in procurement
  • The role of AI and Agentic AI in transforming category strategy and operations

 

Read the full transcript

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Prof. Misty Blessley
Prof. Barry Render

 

OM Podcast #41: Healthcare Supply Chains

In our latest podcast Barry Render is joined by Misty Blessley, professor of supply chain at Temple University, to co-host a conversation with Jennifer Taylor, Director of Contracts at Universal Health Services (UHS).

Jennifer shares her journey to leading procurement and sourcing at one of the nation’s largest healthcare providers. The discussion covers the challenges of transitioning industries, managing purchasing across hundreds of facilities, and navigating the complexities of tariffs and product allocations in healthcare supply chains.

Jennifer Taylor

You’ll also hear about UHS’s innovative internship

Misty Blessley

program designed to build a pipeline of young talent in supply chain management—and how it’s already producing full-time hires.

 

Barry Render

 

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

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Guest Post: Cyber-Enabled Cargo Theft On The Rise

Temple U. Professor Misty Blessley shares her insights with us today.

In Chapter 11 of your Heizer/Render/Munson textbook, cargo theft is identified among many risk categories. Given tracking and tracing technologies along the supply chain, how is cargo theft possible? Because thieves can outsmart digital logistics technologies.

Victims Guy Fieri and Sammy Hagar recently had two semitrailers carrying roughly 24,000 bottles of their Santo tequila vanish en route to a warehouse in Pennsylvania. Valued at over $1,000,000, only 11,000 bottles were recovered. It was not a smash-and-grab hijacking. To manipulate the logistics process, the thieves orchestrated a high-tech ruse by creating false shipping companies, spoofing GPS signals, and sending phony mechanical breakdowns. The drivers were diverted to a fake warehouse, but believed they were following valid instructions.

In such schemes, criminals exploit fragmented and non-transparent logistics networks—double brokering loads, creating illegitimate carrier identities, and manipulating tracking data. Cargo theft incidents involving fraud are on the rise, with the food and beverage sector being a frequent target. Here are two examples:

Yogurt/Plant-based Milk Heist: A load of refrigerated yogurt and plant-based milk was stolen in a double-broker fraud. Criminals used a stolen motor carrier number and a fake email to win the job, then rerouted the load and held the broker’s reputation hostage, threatening losses unless paid off.

Energy Drink Heist: A shipment of energy drinks was stolen after criminals used email spoofing and fake carrier identities in which the fraudsters created a near-perfect replica of a trusted company. They listed themselves on online load boards, won the contract, and successfully arranged pickup of the shipment. The load was rerouted more than 1,000 miles off course following false delivery instructions.

Supply chain managers must treat theft risk as integral to their supply chain risk model. Here are three suggestions:
1. Vet every carrier who will touch your product, including subcontractors and brokers.
2. Use redundant tracking systems.
3. Protect high-value shipments by using escorts and incorporating real-time verification checkpoints.

Reducing this category of risk is increasingly essential in a world where clever cyber-enabled criminals can hijack not with force, but with deception.

Classroom discussion questions:
1. The 11,000 recovered bottles were eventually distributed for sale after being deemed in good condition. Do you agree/disagree with this decision? Why?

2. Of the risk categories identified in the textbook, which risk reduction tactics are also beneficial in reducing cargo theft? How is cargo theft different from the other risk categories?

OM in the News: China’s Rare-Earth Escalation Threatens the Global Economy

China’s newest restrictions on rare-earth materials would mark a nearly unprecedented export control that stands to disrupt the global economy and threaten the supply chain for semiconductors, writes The Wall Street Journal (Oct. 10, 2025). Chips are the lifeblood of the economy, powering phones, computers and data centers needed to train artificial-intelligence models. The rule also would affect cars, solar panels and the equipment for making chips and other products, limiting the ability of other countries to support their own industries. China produces roughly 90% of the world’s rare-earth materials.

A rare-earths production site in China

Global companies that sell goods with certain rare-earth materials sourced from China accounting for 0.1% or more of the product’s value would need permission from Beijing, under the new rule. Tech companies will probably find it extremely difficult to show that their chips, the equipment needed to make them and other components fall below the 0.1% threshold.

“These rare-earth minerals and the ability to refine them are just the basis of modern civilization,” said  one industry expert. “It’s an economic equivalent of nuclear war—an intent to destroy the American AI industry,” added a second. The U.S. and other countries are pouring hundreds of billions of dollars into data centers, making AI a key economic engine. China gaining control of the technology would potentially let it catch up in the AI race and upend the world order.

The semiconductor supply chain is vulnerable to actions like China’s because large chip plants require big capital investments from an ecosystem of companies providing specialized equipment, intricate technical processes and final packaging. Companies in the U.S., Taiwan, Japan and the Netherlands all collaborate with one another.

The Trump and Biden administrations have offered subsidies and other policies to aid the process, but domestic capacity generally remains in its infancy. Some analysts said the new rules will fuel new urgency for big tech companies to invest more in these areas.

Classroom discussion questions:

  1. Why are rare earths so important?
  2. Why doesn’t the U.S. produce and process the minerals needed?

OM in the News: How AI Consumes–and Saves–Energy in Transportation

We all know AI’s dirty secret: It gobbles up a huge amount of electricity—and spits out a large volume of greenhouse gases in the process. But what if using AI can also save energy?

AI has the potential to drastically slash energy demand across a swath of industries and cut down on their carbon emissions. And it may be so effective, writes The Wall Street Journal (Sept. 16, 2025), that it will easily balance out its own power demands and carbon emissions.

In our blog today, we discuss how AI is remaking transportation, planning routes and timetables.

AI-driven route planning has helped major U.S. freight companies cut fuel use in ground vehicles—in some cases by 5% to 10%—by simply lowering the miles they travel. The whole ground-freight industry could cut its emissions by 10% to 15% by using AI-led dynamic route optimization in all vehicles.

Getting stuck in traffic adds up to a lot of pointless emissions. AI-driven route planning has cut fuel use in ground vehicles as much as 10%.

AI can analyze traffic in real time, and is starting to get better at guiding vehicles away from busy areas, reducing the fuel wasted by stop-and-go driving.  (Sitting in traffic adds up to a lot of pointless emissions: Americans wasted 3.3 billion gallons of gasoline and diesel fuel in 2022—over 215,000 barrels a day of petroleum).

 Also, e-tailers cluster deliveries together to save miles traveled. A crucial form of routing goes on behind the scenes. AI-enabled logistics predicts what goods people will be ordering, and where and when. That way, e-tailers can stock their distribution centers according to probable local demand, which means fewer miles spent on deliveries.

Further, marine freight is using AI to calculate the best times for ships to “slow steam”—lower their speed—which can greatly boost efficiency: A 10% drop in speed cuts fuel use by 20%. Improving traffic at ports can also cut down on wasted fuel. Ships burn as much as 7-10 tons a day of fuel while anchored near ports, waiting for congestion to clear. AI-assisted programs help shippers lower the waiting period by timing their arrivals at port efficiently.

The International Energy Agency says the spread of AI in the transportation sector alone could slash 900 million metric tons of carbon emissions by 2035. In comparison, the agency expects emissions from data-center electricity use to rise to 300-500 million metric tons by 2035, up from 180 million metric tons today.

Classroom discussion questions:

  1. How might AI be used in the commercial aviation industry?
  2. How else can AI be of benefit to delivery firms like Amazon?

OM Podcast #39: AI, Sustainability, Cybersecurity, & Blockchain in Operations

We’re back with another exciting episode of the Heizer Render Munson OM Podcast! Today, Barry Render sits down with Dr. Subodha Kumar, Paul Anderson Distinguished Chair Professor at Temple University and Founding Director of the Center for Business Analytics and Disruptive Technologies.

Barry and Subodha dive into the transformative role of artificial intelligence in operations management, exploring how AI is reshaping sustainability practices, enhancing cybersecurity, and driving innovation in blockchain applications. Subodha shares real-world examples from industries like retail, dairy, and luxury goods, and discusses how AI is helping companies tackle greenwashing and improve supply chain visibility.

They also discuss the evolving threat landscape in cybersecurity, especially in logistics and supply chains, and how AI and IoT are both part of the problem—and the solution. Subodha also shares some powerful advice for students preparing for a future where AI will be central to every workplace.

 

Transcript
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Prof. Subodha Kumar
Prof. Barry Render