Category: Supplement 5

OM in the News: AI, Data Centers, Climate Control, and the Future of OM

As companies gathered for Climate Week, a tension was impossible to ignore: the same firms showcasing emissions‑reduction progress were simultaneously accelerating one of the most energy‑intensive buildouts in modern operations—AI data centers. These facilities have become a lightning rod for communities and regulators, especially as their power and cooling demands surge, reports The Wall Street Journal (Sept. 21, 2026).

For operations managers, the implications are profound. A standard AI‑ready data center consumes as much electricity as 100,000 households, and the largest facilities under construction will use 20 times more, driven primarily by cooling loads required to keep high‑density compute equipment stable. This is no longer an IT issue—it is an operations ecosystem challenge involving energy procurement, water usage, thermal engineering, community relations, and regulatory compliance.

Climate control is emerging as the defining constraint. Gas‑turbine backup systems raise air‑quality concerns. Water‑intensive cooling technologies trigger scrutiny in drought‑sensitive regions. States like Virginia are already issuing new standards for water use and energy efficiency, signaling a wave of regulatory pressure that will reshape site selection and facility design.

At the same time, national security priorities are pushing for rapid AI expansion, creating a dual mandate: scale fast, but scale responsibly. Companies are responding with renewable power purchase agreements, advanced cooling systems, and more transparent community engagement. Yet firms still struggle to communicate how their operational plans address environmental risks—especially to residents living near proposed sites.

For OM leaders, the strategic question is shifting from How do we build more compute? to How do we build sustainable, resilient, community‑aligned compute capacity? This requires integrating energy modeling, climate‑risk forecasting, water‑management strategies, and cross‑functional planning across engineering, facilities, and public affairs.

AI may ultimately help solve climate challenges—from grid optimization to disaster prediction—but only if its physical footprint becomes operationally sustainable. The next frontier in operations management is mastering the climate‑control and infrastructure demands of AI at scale.

Classroom discussion questions:

  1. How should operations managers balance the explosive growth of AI data‑center demand with rising environmental and community constraints?
  2. What innovations in cooling, energy procurement, and facility design could meaningfully reduce the climate impact of AI‑driven data centers?
  3. How does the community concern with the infrastructure demands of data centers relate to the “Factors That Affect Location Decisions” in Chapter 8, Location Strategies?

OM in the News: Seaweed’s Rise in a Sustainable Supply Chain

For centuries, coastal communities have tapped marine environments for food, trade, and early industrial materials.  Ancient East Asian cultures harvested kelp as elite food, tax payment and even currency. In 1658, a Japanese innkeeper accidentally discovered agar by leaving seaweed jelly out in the freezing night air, revolutionizing food and medicine production.

Today, that same resourcefulness is powering a new wave of innovation as seaweed transitions from a traditional commodity into a high‑value industrial input. For OM, this shift represents both an emerging opportunity and a complex execution challenge.

Seaweed’s natural advantages make it uniquely suited for sustainable supply chains, reports ASCM Insights (Sept. 10, 2026). It requires no freshwater, no arable land, and grows rapidly—an appealing profile as organizations face tightening resource constraints and rising sustainability mandates. Researchers and manufacturers are now converting marine algae into bioplastics, fertilizers, renewable fuels, livestock feed, and even biochar, which can lock in up to 80% of the plant’s carbon. These applications don’t just support environmental goals; they create new pathways for operational resilience and carbon‑credit strategies.

Innovation is accelerating across sectors. UK researchers have developed biodegradable alginate‑based plastic films that can reduce single‑use packaging waste. In the U.S., aquaculture projects are transforming native sugar kelp into natural oils for personal care products, bio lubricants, and plastics—supported by federal investment aimed at strengthening domestic supply chains and reducing reliance on imported palm and coconut oils. These breakthroughs demonstrate how seaweed can serve as both a sustainable raw material and a strategic lever for reshoring critical inputs.

But scaling seaweed‑based materials is far from simple. High processing costs, fragmented midstream capacity, and regulatory tensions between multinational processors and local harvesters create operational friction.

Mastering this transition requires rigorous planning and inventory control.  Operations managers must navigate evolving material flows, optimize production networks, and turn early‑stage innovations—like seaweed‑derived inputs—into long‑term competitive advantage.

Seaweed’s industrial future is taking shape and organizations that build the operational expertise will lead as marine‑based materials scale.

Classroom discussion questions:
  1. Seaweed-based materials promise sustainability benefits, but there are steep processing costs. How should operations managers evaluate whether an emerging raw material is truly scalable?
  2.  How can supply chain leaders balance efficiency, regulatory compliance, and community impact when integrating new natural resources into global production networks?

OM in the News: AI Data Centers, Water, and Sustainability

Large water tanks at the Meta data-center campus in Arizona

Amazon, Google, and Microsoft are among the tech companies spending an estimated $1 trillion on AI infrastructure this year and last. In some regions, they are using far more water than they report, depending on how data centers are powered. And their water consumption is projected to grow rapidly in coming years. Water demands of the biggest infrastructure buildout in U.S. history could lead to regional fights over who gets an increasingly scarce resource, writes The Wall Street Journal (July 3, 2026).

Google’s just-released 2025 sustainability report is an instructive example. The company said it consumed 10.9 billion gallons of water—a 34% increase from 2024—almost all for data-center cooling. Meta’s  water use was 19 billion gallons in 2024. Meta has a plan to “become water positive in 2030,” in part through water-restoration projects. Microsoft has announced data centers that will have zero water use, as well as a commitment to “community-first AI infrastructure.” This includes a pledge to “replenish more water than we use.”

Cheap land and cheap power have put data centers in the high water-stress areas such as Arizona. About 2/3 of new data-center construction in the U.S. is in water-stressed areas. Phoenix is an example: the total water demands of data centers there amount to 3% of the city’s annual water use. By 2031, they could be in excess of 20%, a number approaching total water used by residents to maintain all of Phoenix’s lawns and landscaping.

Recently, Nvidia said it had solved the data-center water issue, showing off a closed-loop cooling system that doesn’t require additional water once filled. Unfortunately, most existing data centers use evaporative cooling systems that are energy-efficient but water-hungry, and retrofitting those could be prohibitively expensive.

In these boom times, it’s clear why AI data centers are in the spotlight. And the lack of transparency and widespread use of non-disclosure agreements by many data-center builders has only drawn more suspicion and distrust. These are among the reasons that $170 billion of AI data-center capacity has been blocked, stalled or canceled since 2024.

Classroom discussion questions:

  1. What solutions are being considered to deal with electricity and water demands?
  2. Are data centers overbuilding?

OM in the News: Waymo is Repurposing its Old EV Batteries

A Waymo car drives up a hill in San Francisco.

Where do all the used EV batteries go? Alphabet’s Waymo has found a wonderful solution: recycle its old electric-vehicle batteries as storage for solar power. The plan is to reuse thousands of its EV batteries, finding a new use for the old batteries as large-scale energy-storage systems that can stash power to shore up the electric grid.

Its fleet of self-driving cars go through EV batteries far more frequently than regular electric vehicles because the autonomous ride-hail cars rack up more miles more quickly. That means batteries from its autonomous cars would be repurposed at a faster rate than those from a personal EV.

An energy storage system in Lancaster, Calif.

To repurpose EV batteries, the units are removed from the cars, tested and ultimately packed into 9-foot tall “cabinets,” which look like small shipping containers. Each cabinet contains dozens of old EV batteries.

The system captures excess solar energy during periods of low demand and eventually makes it available to consumers via the electricity network through wholesale markets where power is traded. That helps firm up the grid. The company estimates that one cabinet could power an average home for up to three months, writes The Wall Street Journal (June 4, 2026).

Each battery reused can add $8,000 to $10,000 in added electric power value. The clean energy startup is part of a budding desire for businesses to get more out of the glut of electronic waste. “To take an asset made for one purpose and use it for a different purpose—it is fairly novel,” said a company exec.

Classroom discussion questions:

  1. Frame this as a “triple bottom line” issue as in Supp. 5 of your Heizer/Render/Munson text.
  2. What happens to EV batteries that are not repurposed?

OM in the News: Making Renewable Natural Gas Directly from Waste

A new method for treating sewage sludge from a wastewater treatment plant efficiently created renewable natural gas while reducing the cost of the treatment. The work could help communities sustainably clean up waste while getting renewable natural gas for their energy needs.

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When workers at Washington State U. pretreated sludge collected from a nearby wastewater facility, they produced 200% more renewable natural gas compared to current practices and reduced the final disposal cost by nearly 50%. Renewable natural gas could be used in the same way as fossil-fuel based natural gas for a wide variety of uses, including for electricity generation, home heating, or for transportation without the same climate effect as fossil fuels.

“This technology basically converts up to 80% of the sewage sludge into something valuable,” said Prof. Ahring in WSU Insider (April 21, 2016). The WSU team added a pretreatment step, treating the sludge at high temperature and pressure with oxygen added before the anaerobic digestion process. The small amount of oxygen under high-pressure conditions acts as a catalyst to break down the long polymer chains in the material. The team showed that their pretreatment resulted in reduced cost to treat the sewage from $494 to $253 per ton of dry solids.

“This approach not only enhances carbon conversion efficiency and methane yield but also enables direct production of pipeline-quality renewable natural gas with minimal CO2 content — addressing two major limitations of existing sludge-to-energy systems into a single, scalable methodology,” said Ahring.

Wastewater treatment facilities use large amounts of electricity to clean up municipal wastewater, making up between 3% and 4% of the total electricity demand in the U.S. They are often the largest user of electricity in a small community. Their treatment processes also contribute to global warming, adding about 21 million metric tons of greenhouse gases to the atmosphere annually.

About half of the 15,000 wastewater treatment plants in the U.S. use anaerobic digestion to reduce sewage waste and make biogas, but the process, in which microbes break down the waste, is inefficient and struggles to break down all the complex molecules in the sludge.

Classroom discussion questions:

  1. Why is wastewater such an important issue?
  2. Referring to Supplement 5 in your Heizer/Render/Munson text, how does this support the triple bottom line?

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 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.

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Prof. Misty Blessley
Prof. Barry Render
Harry Ziff

 

 

 

 

 

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OM in the News: AI Push Is Costing a Lot More Than the Moon Landing

It’s bigger than the railroad expansion of the 1850s, the Apollo space program that put astronauts on the moon in the 1960s and the decadeslong build-out of the U.S. interstate highway system that ended in the 1970s.

We’re talking about the data centers now being built and financed by some of the world’s biggest companies in the artificial-intelligence boom. Four U.S. tech giants—Microsoft, Meta, Amazon, and  Google—are planning to spend $670 billion to build out AI infrastructure this year alone as they scramble to increase the computing power needed to operate and scale their AI-related endeavors.

And if you compare this spending to some of the biggest capital efforts in U.S. history by percentage of gross domestic product, you can see exactly how staggering the figures are, reports The Wall Street Journal (Feb. 9, 2026). In fact, it’s dwarfed only by the Louisiana Purchase, completed in 1803, which doubled the size of the U.S. and consumed 3% of the GDP.  (The AI buildout is projected at 2.1% of GDP, while railroads in the 1850s were 2%, the US highway system was 0.4%, and the Apollo space program was 0.2%).

The four companies’ capital spending has been increasing as a percentage of their annual revenue the past few years. In 2026, Meta’s spending could amount to more than 50% of its sales for the first time ever.

How is this build-out an OM issue? First, as we discuss in Chapter 2, these four companies are betting that they will attain competitive advantage by competing on low-cost and response. Second, our chapter on sustainability (Supp. 5) points out the costs of carbon footprints, which data centers generate heavily. Third, as we note in the chapter on location strategies (Ch. 8), the centers locate where power is cheap and plentiful.

As of late 2025, Northern Virginia has 64 data centers under construction, solidifying its position as the world’s largest data center market. The region hosts over 550 existing facilities.  They consume massive amounts of power, comparable to the total usage of large states like Minnesota.

Classroom discussion issues:

  1. Discuss the plusses and minuses of this massive construction trend.
  2. What do the builders hope to obtain?

Guest Post: Rethinking the Solar Energy Value Chain Through Circularity

 

Dr. Yagmur Arioz recently completed her PhD at Ankara Yıldırım Beyazıt University.

As the world gradually turns away from fossil fuels and shifts its focus toward solar energy, a critical question arises: Is the life cycle of these technologies truly sustainable? What happens to solar panels at the end of their useful life, or can we prevent waste before panels even reach that point?

The traditional “take–make–use–dispose” paradigm is no longer viable. In the context of solar energy, the circular economy must be embraced as an
intelligent system that optimizes energy fluctuations and integrates energy flows across the entire value chain, from production to consumption.

Although solar panels are often portrayed as green heroes in the fight against climate change, they still carry the risk of generating waste throughout manufacturing, installation, and operation. Overcoming this risk requires adopting the “cradle-to-cradle” approach. This vision emphasizes a value chain in which materials are continuously recovered, effectively eliminating the notion of waste and the need for disposal.

Designing components to be reusable, detachable, and upgradable requires questioning actual needs and fundamentally transforming operational models. However, because short-term cost concerns often overshadow these models, they  are neglected hidden champions of the circular economy. Despite UN recommendations, uncertainties regarding the
sustainable management and circularity of solar energy continue in many countries. What is required is the establishment of common standards and the alignment of collection and recycling methodologies across countries.

Discussions on circularity in solar energy often overlook the social dimension. Yet this dimension serves as a powerful lever for
sustaining more livable societies and addressing poverty in all its forms. From China to Africa, and from certain regions of Europe to developing economies, inspiring examples of this transformation are already emerging. When circular solar energy strategies are integrated into impoverished regions, they not only provide an energy solution but also meet electricity needs through circular approaches, directly improving quality of life through access to clean water, sanitation, health, and education.

If we stopped viewing solar panels merely as technical devices and instead reimagined them as instruments of social transformation, embedded within circular economy principles, could we not address not only the global energy crisis but also structural inequality, powered by the sun itself? What may appear today as modest steps and incremental decisions may, in fact, carry the spark of a profound transformation.

OM in the News: AI Is Mining Our Trash for Treasure

Here’s a job the computers can take without much complaint: sorting recyclables. For humans, it is a foul, laborious job that entails standing over a conveyor belt, plucking beer cans and detergent bottles from a stream of refuse. The job pays little and is hard to fill.

At one recycling facility near Hartford, machines are taking over the dirtiest jobs, reports The Wall Street Journal (Jan. 8, 2026). A few workers remain on the line, mostly to watch for hazardous items. Otherwise, the system of conveyors, magnets, optical sorters and pneumatic blocks runs largely unmanned. The technology allows them to sort up to 60 tons an hour of curbside recycling into precisely sorted bales of paper, plastic, aluminum cans and other materials. The material is sold to mills, manufacturers and remelt facilities, which pay more for cleaner bales.

AI is used to instantly spot recyclables and send instructions to machinery down the line at to remove them.

Watching over it all are computers that analyze material as it passes by at 7 mph. The devices use AI to identify recyclables, flag food-grade material, gauge items’ mass, assess market value and calculate points at which a robotic claw might best clasp each piece.

 The U.S. 50% aluminum tariff has lifted demand for scrap metal, while pulp mill closures have left box makers more reliant than ever on old corrugated containers. And consumer goods companies want to reclaim their bottles as states adopt extended producer responsibility laws aimed at reducing plastic pollution.

Part of the problem: Americans’ poor recycling habits are an obstacle to profit. A lot of beer cans and delivery boxes never even make it to sorting centers. A study in Virginia’s waste stream showed that 28% was recyclable, yet the system was stuck at a recycling rate of about 7% no matter how much it spent trying to teach people how and what to recycle.

The big breakthrough in recycling technology has been combining vision recognition systems with pneumatic blocks. Using puffs of air to separate items has proved much faster and more accurate than robotic pickers, which are limited to about 40 items a minute, compared with thousands for pneumatic system.

Classroom discussion questions:

  1.  Why has recycling been so inefficient?
  2. Should job loss through automation be a concern?

Guest Post: Drinking Graywater Beer?

Prof. Misty Blessley, at Temple U., raises an interesting sustainability issue.

Every drop of water on Earth is part of a continuous cycle. The same water brewed into beer eventually  travels through wastewater systems before being treated and returned to the environment, ready to be consumed again. Gray water is defined as: wastewater from showers, baths, bathroom sinks, and washing machines, excluding toilet water (blackwater) and water from kitchen sinks/dishwashers.

A San Francisco firm, Epic Cleantec, makes this cycle explicit by brewing beer with recycled graywater from showers and laundry. Buildings globally use 15% of all potable water, yet almost none reuse it. Partnering with nearby Devil’s Canyon Brewing Company, it created two beers—Shower Hour IPA and Laundry Club Kölsch, using water purified through a multi-stage system until it meets or exceeds potable water standards. Their approach demonstrates how scarce resources can be sourced in new and innovative ways.

Reusing waste water can help counteract climate change

The supply chain implications are significant. Brewing is water-intensive, requiring several gallons of water for every gallon of beer produced. As climate volatility and drought increasingly pressure municipal water supplies, integrating recycled water helps mitigate supply risk. Pairing this with drought-tolerant barley and hops further enhances supply chain resilience by mitigating upstream agricultural vulnerabilities.

Epic Cleantec’s model represents circular economy principles in action: closing loops, recapturing resources, and turning waste streams into valuable inputs. Many other food and beverage companies are embracing similar strategies. Rubies in the Rubble (UK) creates condiments from surplus produce that would otherwise be discarded. Upcycled Foods, Inc. (U.S.) produces SuperGrain flour to make bread from spent brewing grain. Planetarians (U.S.) transforms spent yeast and soybeans into a vegan meat product that is competitively priced compared to chicken and below beef.

Epic Cleantec emphasizes the circularity of its inputs to build consumer acceptance, hoping customers celebrate the closed loop. For details on the “circular economy” see Supp. 5 of your Heizer/Render/Munson text.

Classroom Discussion Questions:
1.  Forecasting is covered in Ch 4 of the Heizer/Render/Munson textbook. How would you forecast demand for beers made with recycled graywater, given potential consumer hesitation?
2.  TQM Tools are covered in Ch 6. Which tools should the two firms use to ensure water quality and process reliability throughout treatment and brewing?

OM in the News: Salvaging Critical Minerals From Old Laptops and Phones Isn’t So Easy

While electronic waste (e-waste) seems almost infinite, from fried computers to dormant BlackBerry phones, securing discarded tech for metals recycling can be quite tricky.

Electronic waste is dropped on to a conveyor belt during a process to harvest rare earth and other metals in France.

Recycled lithium, copper and other critical minerals can find new life in everything from electric vehicles to battery storage. The push to recycle metals in the U.S. comes amid intensifying efforts to compete with China, which dominates the critical minerals market, reports The Wall Street Journal (Dec. 1, 2025).

“It’s like urban mining,”  said one industry CEO, explaining the benefits of reusing metals from old electronics and scrap waste instead of procuring it directly from the earth. “Rather than going into the mines, we go into our communities,” he said.

Collecting e-waste can be tricky because there isn’t a strong infrastructure to retrieve devices directly from homes, scrapyards, manufacturers or collection sites, and some consumers have privacy concerns when handing over old hardware that could hold personal information.

Meanwhile, large quantities of e-waste are being shipped abroad. About 2,000 shipping containers of electronic waste are sent each month from the U.S. to countries in Asia, particularly Malaysia. But the need to increase the domestic supply of critical minerals has become more urgent, as is evident in the U.S.’s near-total reliance on Chinese imports for lithium-ion batteries.

Shipping e-waste abroad rather than recycling it in the U.S. is “a tragic lose, lose, lose proposition,” said a second industry expert. “The country misses out on the value from the critical metals going to waste, as well as recycling jobs for local workers.”

Most lithium-ion batteries on the market are likely to be hazardous when they are disposed of because they could catch fire or explode if not handled carefully. The environmental footprint of lithium-ion battery recycling emits less than half the greenhouse gases of conventional mining and refinement of metals, and uses about one-fourth of the water and energy of mining.

The global consumption of lithium was estimated to be 220,000 metric tons in 2024—a 29% jump from 2023. But tech recycling in the U.S. has a long way to go. E-waste recycling collection, from relying on municipal return sites to retailer take-back programs, is irregular and fragmented, so recyclers often cannot rely on steady, predictable volumes.

Classroom discussion questions:

  1. Why doesn’t the U.S. recycle all its e-waste?
  2. Could AI help in recycling? (See Supp. 5 of your Heizer/Render/Munson text).

OM in the News: Methane Emissions and the Fashion Industry

Savvy shoppers looking for luxury often hunt for high-quality materials such as 100% wool or genuine leather. But these two materials are responsible for an outsize share of the fashion industry’s methane footprint, reports The Wall Street Journal (Sept. 15, 2025). 

Fashion needs to be more sustainable

Methane traps far more heat than carbon dioxide; it’s 86 times more potent in contributing to global warming in a 20 year time frame than carbon emissions are. These carbon emissions come mainly from animals such as cows, sheep and goats belching out the gas.

Leather and wool are particularly harmful to the environment. The materials make up only 3.8% of the apparel industry, but producing them accounts for 75% of fashion’s methane footprint.

Buying a high-quality piece of clothing made of a natural fiber such as wool will last longer than a cheaper, less durable version made of fossil-fuel derived polyester. But the fashion industry doesn’t do enough to address the environmental impact of animal-derived materials.

Man-made polyester also has a major impact on the planet, particularly as fast fashion companies pump out cheap pieces to satisfy ever-evolving trends—many of which end up in landfills. Greenhouse gas emissions from clothing are ballooning. The global fashion industry is responsible for emitting about 8.3 million metric tons of methane every year, which means its footprint will amount to nearly 4 times the methane emissions released by France annually. Ultimately, shoppers are better off buying fewer pieces of clothing and shopping secondhand when they can to lower methane and carbon emissions.

Sourcing new materials is especially harmful. Producing textiles, from extracting raw materials to manufacturing, accounts for 92% of the fashion industry’s greenhouse gas emissions overall. There is increasing anxiety about where mountains of clothing end up when they’re discarded. The European Parliament is going to adopt a new law requiring producers to oversee textile waste from clothing to blankets and curtains.

One challenge lies in fabric complexity. Most modern textiles are blends of natural and synthetic fibers—like cotton, polyester, and elastane. Yet most recycling technologies today, which are still primarily mechanical, can only process single-material fabrics.

Classroom discussion questions:

  1. Are your students aware of the emissions from different types of fabrics?
  2. Which is worse for the planet–polyester clothes or wool?  Why?

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