Chapter 5 – The OM Blog by Heizer, Render, & Munson

OM in the News: Smarter Hospital Alarms Show How Better Processes Save Lives

Hospitals are some of the most complex operations environments in the world, writes The Wall Street Journal (Sept. 29, 2026). Thousands of interdependent processes—clinical workflows, monitoring systems, documentation, staffing, and technology—must function with precision. When any part of that system becomes noisy, inefficient, or overloaded, the consequences can be serious. A striking example comes from an unlikely OM case study: hospital alarm fatigue.

In modern care units, monitors and pumps generate constant beeps signaling everything from minor fluctuations to life‑threatening deterioration. For patients, the noise disrupts sleep and recovery. For nurses, the sheer volume of alarms creates cognitive overload, making it harder to distinguish true danger from routine variation. In OM terms, this is a quality‑control failure caused by excessive false positives, poor signal design, and misaligned workflow triggers.

Researchers are now applying OM thinking to redesign the alarm ecosystem.

Reducing Non‑Actionable Variation Stanford Medicine introduced time delays and conditional triggers to filter out brief, self‑correcting changes in vital signs. This is classic process‑control logic: eliminate noise so workers can focus on meaningful signals. The results were dramatic—alarm volume dropped by up to 82% without compromising safety. Nurses reported better responsiveness, demonstrating how reducing process clutter improves human performance.

Human‑Centered Design for Quality Another team is redesigning alarms using principles from music cognition. Instead of harsh electronic tones, alarms use recognizable “auditory icons” and musical cues to convey urgency and type of problem. This is OM’s human‑factors engineering at work: improving quality by making information more intuitive, reducing worker stress, and speeding decision‑making.

Predictive Systems to Prevent Failure The most powerful OM innovation may be the machine‑learning tool Concern, which analyzes patterns in nursing documentation to detect deterioration before vital signs trigger alarms. It provides a quiet, color‑coded risk indicator rather than another disruptive alert. In a 60,000‑patient trial, units using Concern saw lower mortality and shorter stays. This is proactive capacity and risk management, shifting from reaction to prevention.

The OM Lesson Alarm fatigue isn’t just a clinical issue—it’s an operations problem. Smarter triggers, better signal design, and predictive analytics show how OM principles can transform safety, reduce waste, and improve outcomes in high‑stakes environments.

Classroom Discussion Questions

How should hospitals balance the need for constant patient monitoring with the risks of alarm fatigue?
What lessons from hospital alarm redesign—such as smarter triggers, better sound design, or early‑warning systems—could be applied to other industries that rely heavily on alerts?

OM in the News: The Short Life Cycle of the A-380 Jumbo Jet

For most of the aviation industry, the Airbus A380 is remembered as an engineering marvel that never made commercial sense. Airbus expected to sell more than 1,200 aircraft when it launched the program in 2000 but ultimately delivered just 251 before ending production in 2021, reports Arabian Gulf Business Insight (July 13, 2026). This was a direct result of a lack of orders, resulting in production capacity outpacing demand

A scrapped ex-Emirates Airbus A380 will be used for hard-to-replace parts now that production ceased

Airbus launched the A380 for a future dominated by congested mega-hubs, while airlines increasingly favored smaller, more efficient long-haul aircraft such as the Boeing 787 and Airbus A350. Those jets made it easier to fly nonstop between more city pairs, leaving the A380 exposed to high operating costs, limited route flexibility, and dependence on consistently full flights.

For airline planners, a carrier did not need 500 or more passengers to make a route viable. A 787 or A350 could carry 250 to 330 passengers over long distances while using two engines instead of four. That made it easier to match capacity to demand, add seasonal routes, increase frequency, or serve thinner markets. More frequent flights on smaller aircraft also appealed to business travelers, who often value schedule choice more than the prestige of flying on the largest aircraft.

The A380 was not discontinued because it was a technical failure. It was discontinued because its economics became difficult for most airlines to make work consistently. A fully loaded A380 could move a huge number of passengers efficiently between major hubs, but the aircraft’s advantage depended heavily on high seat occupancy, strong premium demand, and routes large enough to support hundreds of seats year-round.

Four engines were one of the biggest cost disadvantages. By the time the A380 entered service, long-range twin-engine aircraft were becoming increasingly capable, and the 787 and A350 could fly many long routes with far less fuel burn and lower maintenance complexity. The A380 required expensive maintenance and specialized operational support. Its size meant larger landing gear, more tires, more brakes, bigger systems, and extensive cabin areas to inspect and maintain. Even routine cleaning, catering, and boarding involved more time and labor.

In the end, its operational advantages became harder to unlock.

Classroom discussion questions:

What airplane had a shorter life cycle?
What plane has a longer life cycle?

Guest Post: Packaging Food– Production, Inventory, Training

Prof. Howard Weiss raises an interesting issue that can save consumers and companies money.

Most discussions of OM focus on creating products and services. However, Chapter 5 of your Heizer/Render/Munson textbook reminds us that product design also includes developing packaging to prevent damage and ensure safety. One packaging issue that is important is the date labels found on food products.

A report on food waste found that more than 50 different date labels are used on packaged foods sold in the U.S. The types of labels can be classified as

Label Type	Example
Quality	Best By
Safety-Oriented	Discard After
Production and Packaging	Pack Date
Storage and Handling	Freeze By
Freshness-Focused	Fresh Until
Retail and Inventory	Last Date of Sale
Specialty Product	Harvest Date

The use of these labels is largely unregulated. With the exception of infant formula, federal law does not require manufacturers to place date labels on food products. Further, manufacturers are generally free to choose whichever terminology they prefer. This lack of consistency often leads consumers to discard perfectly safe food, increasing household costs and contributing to unnecessary food waste.

Recognizing this problem, California became the first state to standardize food date labeling with a law that just went into effect and applies to all food products sold within the state. Products sold outside the state are exempt. The law is aimed at reducing food waste and lowering greenhouse gas emissions.

The expected benefits are substantial. Standardized labels should reduce consumer confusion, preventing the premature disposal of safe food and eliminating an estimated 70,000 tons of food waste annually in California. Consumers and retailers should also realize significant economic savings through reduced waste, while fewer discarded food products will lower methane emissions from landfills and benefit the environment.

These regulations have important implications for manufacturers, processors, and retailers. Companies selling products in California must comply with the new requirements by requiring packaging redesigns that use only the standardized “Best If Used By” and “Use By” labels and prohibiting “sell by” dates. Employees will require training and must also be able to explain the new system accurately to customers. Finally, inventory management systems and stock rotation procedures must be updated to ensure products are handled according to the new labeling standards.

Classroom Discussion Questions

How can you tell if food is safe after its “Use or freeze by” date?
Does your state have laws regarding packaging labels?

Guest Post: The Gas Station Life Cycle

Prof. Howard Weiss, retired from Temple U., shares his thoughts with our readers monthly.

The history of gasoline service stations provides an excellent illustration of life cycles as discussed in Chapter 5 of your Heizer/Render/Munson textbook

Before There Were Gas Stations The first practical gasoline-powered auto was developed in 1886 by Carl Benz. Prior to that, some inventors experimented with steam-powered vehicles, while others relied on kerosene because it was inexpensive, widely available, and burned efficiently. Early motorists purchased gasoline in bulk containers from pharmacies, blacksmith shops, or general stores and then poured the fuel into their vehicles using a funnel. Although this process seems inconvenient today, it was sufficient when automobiles were still a novelty.

Life Cycle Stage 1: Introduction

In 1905 the Automobile Gasoline Company opened the first gas station, in St. Louis. The station consisted of little more than a curbside pump with a hose, allowing motorists to fuel their vehicles directly instead of using portable containers. Gasoline sold for 25 cents a gallon. In 1913, the first drive-in service station opened in Pittsburgh, and also expanded the customer experience by offering free air, water, crankcase service, tire installation, and road maps.

Life Cycle Stage 2: Growth

During the growth stage, automobile ownership expanded rapidly, and so did the number of gasoline outlets. By the 1920s, major oil companies had standardized station designs and logos, creating recognizable national brands. Self-service fueling was introduced in the 1940s and became commonplace during the 1970s, reducing labor costs while increasing customer convenience. Today, many filling stations are combined with convenience stores such as Wawa, where merchandise sales often generate higher profits than gasoline itself.

Life Cycle Stages 3 & 4: Maturity and Decline

The number of gasoline outlets peaked at around 285,000 in 1975 and then entered a steady decline. Small independent stations found it increasingly difficult to compete with larger, multi-pump convenience stores that benefited from economies of scale and higher-margin retail sales. The number has been fairly constant at about 145,000 since 2000.

The growth of EV charging stations, beginning around 2007, interestingly, has not yet produced a corresponding decline in the number of gas stations. The future of gas stations will partially depend on the pace of EV adoption, but its history remains an excellent example that not all life cycles have the same shape.

Classroom Discussion Questions;

What information would you want in order to forecast the number of gasoline outlets that will exist in 2040.
Could linear regression be used to forecast the number of electric charging stations in 2040?

OM in the News: Giving M&M’s a MAHA Makeover

As we note in Chapter 5, Design of Goods and Services, the dynamic market places changing demands on products. Such is the case for M&M. Mars, the manufacturer of M&Ms, under pressure from the “Make America Healthy Again” (MAHA) campaign, is striving to make them without artificial dyes.

So M&M’s will mark a milestone in their 85-year history in August, debuting a version temporarily missing two hallmarks colors: brown and blue. Mars plans to color the remaining foods with dyes derived from natural sources.

The task is proving much harder and more expensive than it sounds, writes The Wall Street Journal (June 23, 2026). Blue is proving difficult to re-create affordably, and at scale. To complete the challenge, the company couldn’t reliably churn out brown M&M’s, which, it turns out, include a fair bit of blue. Some 100 employees are working on its natural-color efforts. A quarter of them are dedicated solely to finding a proper blue!

Companies have scoured the globe in search of raw materials to create a natural blue food color that can withstand changes to heat, light and pH. They have experimented with juice from a fruit found in Central and South America, petals from the butterfly pea flower in Southeast Asia, and spirulina (which works best, but leaves a sticky film akin to dental plaque inside the factory pipes).

All this means that Mars must upgrade more than 300 machines across its plants to handle spirulina. The company is installing new mixing tanks, paddles and motors. Moreover, new cleaning equipment will also be required to blast machines on the M&M’s lines for longer stretches, with hotter water and more force.

The company pledged a decade ago to cut artificial dyes from all of its human food. But it changed course for candy, saying many consumers weren’t worried about the dyes in those products.

This M&M story illustrates the pervasiveness of issues with new or altered designs. As is often the case at M&M and elsewhere, cross functional teams are needed for experimenting, international suppliers must be developed, capital investment for new equipment must be devoted, and new maintenance procedures to keep equipment working must be created.

Classroom discussion questions:

Why is the move to healthier candy so difficult?
Why not just drop the brown and blue M&M’s?

OM in the News: The U.S.’s Greatest Breakthroughs

As we discuss in Chapter 5, Design of Goods and Services, new products are the lifeblood of every company–and every country. According to The Wall Street Journal (April 24, 2026), here are the top 10 inventions coming from the U.S. that had the greatest impact on society.

1. The Internet— Erasing the constraints of geography, it became the central nervous system of the global economy. It enabled trillion-dollar industries, upended retail and media, and democratized access to information on a scale unseen since the Gutenberg press. It is now the indispensable infrastructure of the 21st century, facilitating nearly every economic and social interaction, and transmits more data in a second than it did in an entire month in the 1990s.

2. Lightbulb— Edison’s 1879 invention fundamentally restructured the human relationship with time and severed dependency on the sun, transforming the U.S. night from a period of dormant isolation into a commercial and social frontier, paving the way for the 24-hour city.

3. Integrated Circuit–By the late 1950s, the future of computing was stymied by size. The breakthrough arrived in 1958 when Texas Instruments built the first integrated circuit. Modern chips can contain more than 50 billion transistors; early integrated circuits contained just a handful of components.

4. Personal Computer–Before the mid-1970s, computers were hulking mainframes housed in climate-controlled rooms, accessible mainly to governments and large corporations. The desktop revolution accelerated the Information Age by placing analytical power in individuals’ hands.

5. Airplane–Human flight went from myth to reality on a cold morning in 1903. Aviation fundamentally compressed space and time, turning grueling ocean and train voyages into routine flights.

6. AC/DC Power–Unlike direct current (DC), alternating current (AC) could travel vast distances before being safely lowered for household use, and served as a catalyst for global industrialization. By decoupling power generation from power consumption, AC meant that massive factories no longer had to be anchored to rushing rivers or local coal plants.

7. Telephone–For society, the telephone collapsed a massive continent into a single, interconnected neighborhood. Demand for switchboard operators brought hundreds of thousands of women into corporate offices, reshaping the clerical workforce.

8. Smartphone–The introduction of the smartphone–crystallized by the 2007 debut of the iPhone–collapsed multiple devices into a single pocket-sized tool. By combining an intuitive multitouch interface with always-on internet connectivity, the smartphone became a universal remote control for modern life. U.S. users average more than 5 hours a day on their smartphones.

9. Refrigeration–Mastering refrigerated transport and storage decoupled society from its local geography, allowing the cattle ranges of the American West to feed the East Coast via insulated, ice-cooled railcars. Less than 1 in 5 American households had a mechanical refrigerator in 1930; by 1950, 4 in 5 did.

Workers unloading a reactor vessel for the world’s first full-scale civilian nuclear plant in Shippingport, Pa.

10. Nuclear Power— After the first atomic power station in 1957, commercial nuclear power is again being re-examined, driven in part by the energy demands of AI and the push for climate-neutral power. A uranium-fuel pellet the size of a fingertip packs as much energy as roughly one ton of coal or 149 gallons of oil.

Classroom discussion questions:

What is your ranking of these top 10?
What should be the next 15 inventions in the list?

Guest Post: Food Processing Ingredients

Prof. Howard Weiss shares his insights monthly. Howard created the Excel OM and POM software that we provide free with our book.

A recent Philadelphia Inquirer article (February 19, 2026) reports that “The grandson of the inventor of Reese’s Peanut Butter Cups has lashed out at the Hershey Co., accusing the candy company of hurting the Reese’s brand by shifting to cheaper ingredients in many products.”

In prior years consumers expressed dissatisfaction when Nutella reduced the amount of cocoa in its product. One reason for the change in the recipes for these two products is the high cost of cocoa. Clearly, a change in a recipe will affect inventory, material (ingredient) costs, and the supply chain.

The most infamous recipe change is probably “New Coke” which was introduced in 1985. Consumer backlash forced Coke to revert to its original recipe. Recently, Coke announced it will add a new product made with cane sugar rather than corn syrup.

Food taste and recipes can vary for a number of legitimate reasons. The recipe for Twinkies was changed in order to extend its shelf life from 25 days to 45 days. Butterfinger took an alternative approach and double-wrapped its candy. Several food processors have changed recipes in order to eliminate certain food dyes or additives or reduce sodium, including Kraft Macaroni and Cheese and Turkey Hill ice cream.

The same product may have a different recipe for sales at bulk stores rather than supermarkets. Colas may have a different amount of corn syrup in bulk stores.

Sometimes recipe changes are inadvertent. In one case consumers complained about the taste of meals they cooked using 4C Italian Bread Crumbs. 4C investigated and found that trace amounts of cinnamon were in the bread crumbs and should not have been. There are many examples of bacteria being in processed food which would affect the health of the person eating the food. This is different. There is a processing problem but it will NOT cause health issues just taste issues.

The repercussions of food quality are different than the repercussions of food safety. Food safety problems can lead to recalls, liabilities, brand damage and penalties. Failure to maintain taste can result in brand damage and product returns.

Classroom discussion questions:
1. Identify other products in which change resulted in complaints or safety issues.

2. What are the main changes these days to food products?

OM in the News: The Short Life Cycle of Amazon Go

It doesn’t seem that long ago that we posted the news that Amazon was opening 57 Amazon Go cashierless bricks and mortar store grocery sores.

We even highlighted this exciting digital-driven advancement in an OM in Action box in Chapter 5 (see page 175). But as we also point out in in our discussion of product life cycles in that chapter (Design of Goods and Services): “Products are born. They live and they die.”

The e-commerce giant just announced that “its branded stores failed to deliver a distinctive customer experience with an economic model that could be scaled up successfully.” This marks the latest pivot in Amazon’s more than decadelong effort to break into physical retail, reports The Wall Street Journal (Jan. 28, 2026).

Amazon Go’s convenience stores, which let customers check out electronically without waiting in line, also never resonated with shoppers on a large scale, and the company has trimmed its fleet by more than half since 2023. The company does, however, license its Just Walk Out technology to retailers at more than 360 locations in five countries, including colleges and universities, sports arenas, hospitals and airports.

Amazon plans to continue experimenting with bricks-and-mortar retail. The company just won approval to open its largest-ever store in Orland Park, Ill., where it will sell groceries, general merchandise and prepared foods. The megastore, which at 230,000 square feet will be big enough to fit nearly two Target stores, will incorporate in-person and digital shopping.

Product life cycle can span a few days (a concert t-shirt), months (seasonal fashions) years (NFL Madden football), or decades (Boeing 737). Amazon Go lasted eight years.

Classroom discussion questions:

Why did Amazon Go fail?
Name a few other products that also exhibited short life cycles.

OM in the News: Taco Bell Uses OM to Know What You Want to Eat at 2 a.m.

Taco Bell is considered the GOAT of new product ideas, testing hundreds to develop viral hits like Doritos Locos Tacos and Baja Blast, writes The Wall Street Journal (Nov.22-23, 2025). Its product development team (see Figure 5.3 in your Heizer/Render/Munson text) systematically generates, tests, and implements new menu items, focusing on limited-time offerings (LTOs) that keep the brand relevant and appealing. And as we point out in Figure 5.1, the higher the percentage of sales from new products, the more successful the firm.

Here is how it works at Taco Bell’s New Product Development Team:

New products are engineered to use ingredients and equipment already available in restaurants, minimizing the need for additional resources and reducing training time for staff. This approach ensures that operational changes are minimal and that new items can be introduced without disrupting established workflows.

2. Using rapid testing, hundreds of concepts are evaluated annually, but only those that meet operational standards and customer demand advance to market testing. This ensures that only efficient, scalable items reach the menu.

3. Most new items are offered for 4-6 weeks, allowing for frequent menu refreshes without overburdening operations or inventory management. This strategy keeps the menu dynamic and enables the company to respond quickly to changing consumer preferences.

4. LTOs are crafted for quick and consistent assembly, supporting high throughput and maintaining quality across all locations. Operational teams are trained to execute new items efficiently, ensuring that service standards are upheld even during periods of high demand.

5. New menu innovations are developed with profitability in mind, leveraging cost-effective ingredients. This focus supports growth and helps Taco Bell remain competitive in its sector.

6. The company tracks same-store sales and operational metrics, enabling it to identify opportunities for improvement and maintain operational excellence.

7. The product development team operates in a collaborative environment. Leadership encourages experimentation.

8. Operational decisions are informed by market research and consumer feedback, ensuring that new products align with customer preferences and operational capabilities.

Taco Bell’s operational strategy enables efficient product innovation, rapid deployment, and consistent execution, supporting both profitability and sustained market leadership in the fast-food industry.

Classroom discussion questions:

What items at McDonald’s and Starbucks are LTOs?
Why is Figure 5.1 so important?

OM Podcast #42: An Interview with the Founders of Canada’s Simpla Foods

We’re back with another inspiring episode of the Heizer/ Render/ Munson OM Podcast. In this episode, Barry Render sits down with Canadian entrepreneurs Katie Wookey and Ari Davis, co-founders of Simpla Foods, a plant-based yogurt company that’s redefining sustainability and supply chain innovation in the food industry.

Barry explores how Katie and Ari turned a personal health journey into a thriving business now sold in over 300 stores across Canada. The couple shares their experience with co-packing and contract manufacturing, explaining how outsourcing production has allowed them to scale efficiently while staying focused on product development and sustainability.

Heizer Render Munson OM Podcast · OM Podcast #42: An Interview with Simpla Foods

Transcript

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 all our episodes delivered straight to your device!

Guest Post: EV Charging– Driving Toward Universal Accessibility

Prof. Misty Blessley at Temple U. looks into an issue facing EV owners.

New Jersey is removing Tesla Superchargers from Turnpike and Parkway service areas and replacing them with universal chargers provided by Applegreen Electric. These new stations will feature CCS1, CHAdeMO, and J1772 connectors, making them compatible with a wider range of EVs. Tesla owners can use these chargers with adapters. Most newer Tesla models can accommodate J1772 (Level 2) and CCS (DC fast charging) connections through external adapters.

This shift reflects a broader trend toward open-access infrastructure aimed at increasing accessibility for all EV drivers. It also introduces new OM considerations around the production, availability, and use of adapters.

The Shift Toward Open Infrastructure
New Jersey’s decision mirrors historical tech battles between proprietary systems and open standards. Tesla, like Apple in its early days, built a closed ecosystem. The state’s move to universal chargers signals a shift toward interoperability over exclusivity. As one article put it, “Up until recently, the vast network of more than 1,600 Tesla Supercharger fast EV charging stations in the U.S. was a perk exclusive to Tesla owners.” That exclusivity is
now being replaced with inclusivity, with the cost falling on Tesla drivers now being dependent on an external device.

In this context, adapters become the modern equivalent of USB driver software, seemingly minor components that play a major role in user experience and system reliability.

Adapter Implications for Operations and Supply Chain
 Forecasting and Demand Planning: Widespread reliance on adapters will drive new demand. Manufacturers must scale production, distribution, and after-sales support.
 Inventory Management: Retailers and even rest stops may need to stock or rent adapters, creating SKU complexity.
 Station Capacity: Adapters can increase setup time, and Level 2 chargers provide only 13–25 miles of range per hour—far slower than Tesla’s V3 Superchargers (over 200 miles in 15 minutes), potentially reducing the number of EVs that can be charged at a station.

 Risk and Reliability: Adapters introduce new points of failure because they are mechanical devices prone to wear, damage, or user error. This raises customer service and warranty cost concerns.

Classroom discussion questions:
1. In Ch. 11 of your Heizer/Render/Munson textbook, component standardization is discussed. What are the benefits of standardizing EVs and charging stations?
2. What advice would you provide to operations managers on the adapter implications mentioned above?

OM in the News: Additive Manufacturing–Faster and More Versatile

Additive manufacturing (AM) is changing every year, writes Industry Week (Jan. 24, 2025). Design and manufacturing will take advantage of not only new 3D printers in 2025, but also new materials and software that all together drive new ways to use additive.

Speed and its benefits: 3D printers are getting a lot faster. The latest iterations can be up to 5 times faster than their predecessor printers. When you can make a prototype five times faster than before, you don’t just do the old processes faster; you use new processes – like agile process (see Chapter 3), for example. Hardware can become more like software, with multiple iterations a day not out of the question.

Mass customization: AI and machine learning will play a larger role in enabling truly personalized products at scale, optimizing designs based on customer preferences and real-time feedback. This will lead to faster and more cost-effective production of personalized items, from medical implants to consumer goods, allowing even small-scale manufacturers to compete with traditional mass production.

Distributed manufacturing: Additive will enable production to move closer to the end customer, reducing lead times and environmental impact. Digital databases will replace physical inventory, and manufacturing will happen on demand.

Hybrid processes: The integration of additive with traditional manufacturing techniques can integrate data feedback loops for enhanced precision in multi-material and complex geometry production. This hybrid approach will be used to create high-performance, lightweight parts for industries like aerospace and automotive, expanding the use of additive manufacturing for critical, high-precision applications.

Classroom discussion questions:

How would you define additive manufacturing?
Provide an example of a product made with this technique. (Hint: see Chapter 5 of your Heizer/Render/Munson text)

OM in the News: AI Is Becoming Every Product Designer’s Companion

Artificial intelligence tools like ChatGPT and Microsoft Copilot have already proven their value in many product designers’ daily design work, asking questions about design decisions and giving advice on design and CAD strategies. (See Chapter 5 in your Heizer/Render/Munson OM text). But AI is moving beyond being a tool to becoming an active collaborator, reports Industry Week (Jan. 24, 2025). There are a huge number of exciting AI applications in design:

Generative design as a standard: AI-driven generative design tools are becoming more popular, producing optimized solutions that human designers might never consider. These tools will seamlessly handle constraints like material properties, manufacturability and sustainability.

AI-Powered decision support: Product designers are increasingly relying on AI to analyze massive datasets, predict performance outcomes and recommend design improvements. AI-powered digital engineering tools that accelerate physics simulation through “simulation surrogates” are helping designers make faster, smarter decisions throughout the product lifecycle. AI models trained on numerical analysis can run simulations up to 1,000 times faster.

Human-AI collaboration: The best results come from teams that embrace a symbiotic relationship between AI and human creativity. AI can help human designers answer questions by doing the legwork and analysis on documents and information. AI will provide expert advice on how to use other computing tools like computer-aided design (CAD), product data management (PDM), and simulation, much like expert human designers provide advice to their colleagues. The latest conceptual industrial design tools take simple sketches and generate rendered design concepts based on text prompts, such as “orange and black controller, Nintendo-like.” Meanwhile, AI assistants for computer-aided manufacturing (CAM) software–see Chapter 7– can quickly produce machining strategies, reducing time spent on CAM programming and making manufacturing processes more efficient.

Customer-centric design: AI is also playing a significant role in aligning products with customer preferences. The latest AI product development solutions mine product reviews and other customer feedback data to synthesize design directions tailored to consumer tastes or specific attributes like performance. This insight can help teams create products that better meet market demands.

Classroom discussion questions:

How is AI revolutionizing product design?
Are there disadvantages in becoming AI-dependent?

OM in the News: The U.S. Made T-Shirt

The U.S. is awash in a sea of cheap imports that has destroyed much of the domestic apparel industry. In 2023, less than 4% of the apparel purchased in America was made here, reports The Wall Street Journal (Dec. 31, 2024). Then, there is Walmart, whose aisles are piled high with goods this holiday season. But one item sticks out: cotton T-shirts that were made in America and cost $12.98.

It wasn’t tariffs that made the $12.98 shirt economically feasible, says the CEO of American Giant, the U.S. apparel company producing them. It was Walmart’s heft—and guaranteed orders. The country’s biggest retailer—and importer of consumer goods—pledged in 2013 to buy more items that were made, grown or assembled in the U.S. In 2021, Walmart increased its goal and promised to spend billions more each year through 2030.

American Giant said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant’s suppliers wouldn’t have had the confidence to make the investments in automation and other upgrades that drove down production costs. The company buys yarn that is grown, spun, dyed and sewn in the U.S., contracting with suppliers mainly in the Southeast. It also owns cutting and sewing facilities in N. Carolina and Los Angeles.

How did American Giant get the price down from the $40-$60 it usually charges for a T-Shirt? By automating parts of the process to keep labor costs low, it was able to compete with countries such as Vietnam and China where workers are paid a fraction of the U.S. minimum wage.

“You can make almost anything here, as long as it doesn’t require lots of labor,” says the CEO. To fulfill Walmart’s order for hundreds of thousands of shirts, the company tweaked the design and then spent $1 million on machinery designed to make production faster and more efficient.

The T-shirts arrived in 1,700 Walmart stores and were up against other 100% cotton T-shirts selling for half as much. But those shirts didn’t have any American emblems. Walmart bars suppliers from using the term “American Made” or the American flag on products that aren’t made in the U.S. Despite the success of American Giant and a handful of other apparel companies that have figured out how to produce domestically, it is unclear how much Americans care about buying products made in the U.S.

Classroom discussion questions:

Could American Giant have reshored without Walmart?
What are the key OM decisions that were made?

OM in the News: Airbus’s “Airplane of the Future” Struggles

Designing a new product (see Chapter 5) is never easy and corporate history is full of great products that flopped—Betamax, Commodore’s Amiga computer, the Ford Edsel, and Aston Martin’s 1974 Lagonda car. For the Airbus A220 commercial jet, avoiding a similar fate seems like a constant struggle.

Here are my observations from an insider’s perspective. My first job out of college was as a “loft lines” engineer at McDonnell Douglas (now Boeing), designing the wing of the DC-10 jumbo jet, a plane that failed badly (but the wing never fell off!). From there I went to GE to work on design of the CF6-6 engine, designed to power the DC-10. The reality is that creating a jet engine is as complex as creating a new jet. Still, what is happening to the Pratt & Whitney PW1500G engines for the A220, is troubling.

The durability problems affecting A220 engines have hit this aircraft hard, forcing airlines to cancel flights and ground crews. PW1500G’s were supposed to last 20,000 flight cycles, but are being sent to the shop at 5,000. Some are being sent in before 600 cycles. About 15% of global A220s are grounded.

The A220 should be the pride and joy of the aerospace industry, writes The Wall Street Journal (Sept. 11, 2024). It is the only “clean-sheet” single-aisle plane built in recent years—the A320 and Boeing 737 designs go back to 1986 and 1966, respectively. When it entered service in 2016, it sported a lightweight airframe full of composite materials, large windows and a redesigned cockpit. It reduced fuel burn per seat by 25% and became beloved by pilots and passengers alike.

But now, cancellations are outpacing orders. EgyptAir, which flies in a hot and dusty region harsh on aircraft, got rid of its 12 A220s earlier this year. Cyprus Airways added two brand-new A220s, only to see both of them affected by engine troubles. Its CEO said the jet shouldn’t be sold until the problems are solved.

Scarcity of parts and lengthy repair-shop waiting lists mean that there is no quick fix. Some of the overhauls to the A220’s engines are particularly lengthy: A whole-new combustor design won’t be rolled out until 2027. And recent experience has taught airlines to distrust timelines. The headache for Airbus is that it needs to reach and sustain a production rate of 14 A220s a month in order to break even on them, up from 6 currently.

Classroom discussion questions:

Which other commercial jets have suffered major setbacks in the past decades?
In what ways is this an OM issue?