Category: Supplement 5

OM in the News: Europe Tells Textile Producers to Manage Their Own Waste

Producers that sell textiles in the European Union will have to cover the cost of collecting, sorting and recycling those materials, under a new directive to reduce waste in the fashion industry. The EU is adopting a new law whereby producers will have to oversee the management of waste from clothing to blankets to curtains, reports The Wall Street Journal (Sept. 11, 2025). The directive covers the full life cycle of a product and aims to motivate producers to “reduce waste and increase the circularity of textile products,” since they will be bearing the cost of managing that waste.

EU Pushes Rules for Circular Economy

The EU is looking to reduce the environmental impact of the fast-fashion industry. Some 12.6 million tons of textile waste are generated in the EU each year. It estimates that just 1% of textiles are recycled worldwide.

 The law will apply to all producers, including those using e-commerce tools and irrespective of whether they are established in an EU country or outside the bloc. Smaller companies will have an additional year to comply with the requirements.

“This legislation will accelerate the move towards circular business models and more sustainable consumption,” said a recycling consultant. “The requirements will bring added costs and operational pressures for producers at a time when many are already under strain.”

Elsewhere, the EU is to set new targets on food waste. From 2031, member states will be required to reduce food waste generated during processing and manufacturing by 10%, while the target for shops, restaurants and households will be 30%. Every year, almost 60 million tons of food waste, amounting to about 291 pounds per person, is created within the EU.

Classroom discussion questions:

  1. Supplement 5 in your Heizer/Render/Munson text introduces the term “circular economy.” What does that mean and how does it apply in this EU case?
  2. Discuss the OM implications of this new directive? Does it impact U.S. firms?

OM in the News: The Future of Trash Pickup and AI

Americans are among the top producers of trash per capita. Each person in the U.S. disposes of nearly a ton of refuse annually. Simplifying trash day, and diverting the 80% of reusable material that still ends up in landfills, is one key to solving our problems.

Urban planners, the refuse industry and cities across the country are reimagining how we manage and dispose of our waste, reports The Wall Street Journal (Aug. 28, 2025). The New York City and MIT are among those leveraging AI, robotics and electric power to tackle a growing garbage crisis fueled by cheap products and throwaway culture.

Most of Americans don’t recycle regularly, citing the inconvenience and confusion involved in sorting their trash. To help people up their sustainability game, sanitation engineers are promoting a new system: the single-stream model. The operation is simple—residents throw everything into one trash bin. Then, that waste is transported to a remote facility, where AI-powered cameras and robots sort it, diverting items that can be recycled. The goal is to have a system that’s more circular, that can reuse and recycle things more.

AI can also identify items such as electronics that contain hazardous or valuable materials—including copper, silver, gold and rare-earth minerals—and send them on for disassembly and harvesting before they enter the waste stream.

Individual garbage bins or piles of plastic bags aren’t only an all-you-can-eat buffet for rodents—but also malodorous, leaky and inefficient, requiring endless noisy stops from garbage trucks on collection day.

The new NYC shared Empire Garbage Bins.

To solve these problems, cities are moving toward containerization: large, centralized bins shared by a street or neighborhood. One NYC neighborhood  is already piloting a program of such containers, with plans for citywide expansion in the future.

Smart bins could even ping dispatch offices when they are ready for pickup. Large collection vehicles could be used more sparingly, and with fewer stops—thus decreasing noise, pickup time and pollution. In the future, the parameters that we use could be, ‘Is it full? Or is it smelly?’ Then collection on that bin can take place only if the contents meet those conditions.

AI-optimized routing and trash-loading technologies could also help make pickups shorter, less frequent and less disruptive.

Classroom discussion questions:

  1. How could AI be used to help recycle?
  2. What are the major inefficiencies of most garbage collection and recycling systems?

OM in the News: The Environmental Cost of Quizzing AI

Every time you ask Google’s Gemini a query, it takes the same amount of energy as watching 9 seconds of TV. So says Google’s new report detailing the energy consumption, emissions and water use of its generative AI that users turn to every day for everything from writing tips to fact checking. A single Gemini text query emits 0.03 grams of carbon dioxide equivalent and consumes about 5 drops of water.

Microsoft plans $80B for data centers as power constraints loom

The tech giant appears to be looking to ease brewing anxieties about AI searches: that frequently using generative AI such as Gemini can be detrimental to the environment.

Global demand for AI is ramping up rapidly, writes The Wall Street Journal (Aug. 21, 2025). Electricity demand from data centers worldwide is set to more than double by 2030 to about 945 terawatt-hours, which is more than Japan’s total electricity consumption. A single AI-focused data center can use as much electricity as a small city of 100,000 and as much water as a large neighborhood. But the largest ones, that haven’t been completed yet, could consume 20 times more as much. It’s a particular problem in the U.S., with data centers making up 1/2 of its electricity demand growth over the next 5 years.

OpenAI Chief Executive Sam Altman, when asked how much energy a ChatGPT query uses, responded “the average query uses about the amount an oven would use in just over one second, and 1/15 of a teaspoon of water.”

The type of query we feed to generative AI also matters, however. Energy demands can be dampened if we can remove some of that back and forth, and make our prompts a little simpler and easier to understand. Shorter, more concise prompts, along with using smaller AI models, can dramatically reduce energy use.

Tech giants are announcing many new clean-energy power agreements to fuel their AI ambitions, including Google, which recently announced new power deals from geothermal to hydropower. It also plans on an advanced nuclear reactor project in Tennessee.

It’s important for tech companies to divulge how frequently their AI is receiving queries. If it’s being used by one person, emissions are lower, but that’s different if it’s billions of people at 30 data centers across the world.

Classroom discussion questions:

  1. Why is the growth of AI searches an OM issue?
  2. How can this growth be contained, or minimized?

OM in the News: Polyester Is Driving Up Fashion’s Emissions

Greenhouse gas emissions from clothing companies are mounting, reports The Wall Street Journal (July 24, 2025).  The spike is fueled by supercharged apparel production, as well as a mounting reliance on virgin polyester. Virgin polyester, a material made from fossil fuel-created plastic, is the latest industry trend.

Polyester now makes up 57% of total global fiber production. The market share of recycled polyester used in clothing has recently dropped, pointing out that the material costs more than its virgin counterpart.

Environmental concerns about apparel have proliferated since the arrival of ultrafast fashion companies, which churn out low-cost clothes direct-to-consumer to satiate lightning-quick trend cycles.

Activists hold banners as they gather in front of bags of textile waste delivered in Paris

Recycling clothing can be especially tricky when fibers are woven together, for example cotton and polyester, which are often blended to lower costs and provide stretch in fabric.

But consumers are growing worried about clothing shedding microplastics that could harm human health and the environment. There’s also been concern about “forever chemicals” in textiles used to make workout gear.

New technologies including artificial intelligence are helping brands to get a better handle on their clothing stock, piloting made-to-order methods that significantly reduce waste by producing only what is needed.

Some countries are taking swift action to try and blunt the harms of fast fashion. France recently adopted a bill to tax each fast fashion item €5 ($5.87 ) which will increase to €10 by 2030.

Classroom discussion questions:

  1. Why is fast fashion an OM issue?
  2. How else might AI be used to improve sustainability in the fashion industry?

Guest Post: Mass Timber–A Sustainable Alternative Worth a Closer Look

Temple U. Professor Misty Blessley raises an interesting point in her Guest Post

Mass timber refers to beams, columns, or panels composed of smaller wood pieces bonded together using fasteners, such as nails, or other adhesives. These engineered wood products are increasingly being used in the construction of high-rise buildings, praised for their strength, durability, versatility, and sustainability.

At a time when the U.S. is relying on steel imports to meet demand—and tariffs threaten to drive prices higher, causing delays or cancellations of some construction projects—mass timber presents a compelling alternative that deserves objective evaluation. Mass timber as a building material is gaining traction.

The Benefits:
Mass timber offers a significantly smaller carbon footprint compared to traditional materials like steel. As a renewable resource, wood supports sustainability goals, and “track and trace” technologies now enable end-to-end transparency, from forest to finished product. Notably, mass timber is reported to match steel in strength and is fire resistant. Additionally, clear-cutting practices, which involve harvesting most or all trees in an area simultaneously, allow for high productivity. Once harvested and processed, the prefabricated nature of mass timber allows for faster construction and shorter project timelines.

The Trade-Offs:
Despite its advantages, mass timber comes with concerns. Critics have raised the issue of greenwashing, questioning whether its environmental claims are justified. Also, building codes, historically designed with steel in mind, can lengthen project times because they are still evolving to accommodate this new material. Finally, while competitive, costs have been reported to be marginally higher than conventional options.

Classroom discussion questions:

  1. In Supplement 5 of the Heizer/Render/Munson textbook, sustainability is defined as meeting the needs of the present without compromising the ability of future generations to meet their needs. Consider the trade-offs of clear-cutting through the lens of environmental sustainability.

    2. Seven TQM tools are discussed in Chapter 6. As a project manager of a new building using mass timber, create a cause-and-effect diagram and conduct an initial analysis of what should be considered in preparing to embark on the project. Include all of the four M’s – material, method, manpower, and machine.  

 

OM in the News: The Biofuel Controversy

The battle lines are being drawn on the alternative fuel debate and the steps that will contribute to the International Maritime Organizations’s (IMO) emission reduction goals, reports The Maritime Executive (Feb. 17, 2025).  Major shipping lines and non-government groups are calling for the IMO to exclude biofuels from its list of green alternatives to traditional fossil fuels. They argue it would be unsustainable and could produce more harm than good.

Nearly a third of global shipping could run on biofuel in 2030– up from less than 1% today. But the price advantage of biofuels would result in unsustainable demand. Carriers have invested in the use of biofuels derived from used cooking oil and animal fats. With the supplies limited, just 2.5 – 3% of shipping could run out of used cooking oil and animal fat biofuels by 2030. Two interesting facts:

  • The vast majority of biofuels will come from palm and soy (60%), which are heavily linked to deforestation.

  • Close to 300 millions bottles of vegetable oil could be diverted to powering ships every day in 2030, putting pressure on grocery prices.

(There was a doubling of the use of palm oil biofuels in the EU between 2010 and 2020 following the introduction of a law promoting biofuels in cars.)

There is a debate in the EU on the competition for food supplies if the oils were also to be used as biofuels. “As things stand the IMO risks doing more harm than good. Palm and soy biofuels are devastating for the climate and they take up vast amounts of land,” argues one shipping exec. The fuel-intensive shipping industry would need farmland about the area of Germany to produce enough crops to meet its increased biofuel demand.  Land that could be used for farming would need to be converted to growing biofuel crops, while burning vegetable oil in ships will deprive supermarkets of a staple food item.

This could pose a serious climate problem, as palm and soy are responsible for 2-3 times more carbon emissions than even the dirtiest shipping fuels today, once deforestation and land clearance are taken into account.

Classroom discussion questions:

  1. We open the Supp. to Chapter 5 (Sustainability in the Supply Chain) with an example of airlines switching to biofuels. Is this a realistic approach given the above article?
  2. Make the case for and against shippers switching to biofuels.

OM Podcast #31: The Impact of AI on Jobs and on the Environment

In our latest podcast, Barry Render interviews Charlie Render, President of Render Analytics, which helps businesses of all kinds implement AI.  Charlie is also the creator of the popular job-search engine, Apply Genie (ApplyGenie.ai). In this episode, Barry and Charlie discuss the impact of AI on the environment and on jobs.

 

 

Transcript

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

 

Charlie Render

Have you subscribed to this podcast on Apple podcasts? Just go to your Apple podcasts app, search “Heizer Render OM Podcast,” and subscribe to get all

Prof. Barry Render
Prof. Barry Render

our podcasts on your mobile device as soon as they come out!

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM. See our earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more! https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

OM in the News: Junk Is Needed for the New Electric Era

Circuit boards from thousands of different products arrive at Glencore’s Rhode Island facility, where the company determines the copper content and the value of the waste.

One of the world’s largest miners is digging into America’s junk drawers, old phones and landfills. The quarry: bits of copper to meet the needs of the energy transition and data boom.  Shredded cellphones, obsolete computer cables and chewed-up cars are heaped 30 feet high outside Glencore’s 97-year-old copper smelter deep in Canada’s boreal forest. There, the scrap is melted with copper concentrate from mines to produce fresh slabs of metal.

Shifting from fossil fuels to more renewable electricity promises to remake commodity markets, writes The Wall Street Journal (Nov. 21, 2024). If America requires less crude oil and coal, it will in turn need copper for everything electric. “In the next 25 years we will consume more copper than humanity has consumed until now,” says Glencore’s  recycling head.

Data centers being built to facilitate AI and store smartphone videos are full of copper. So are the phones. Even if rich mine deposits are found, it takes decades to bring them online. That prevents miners from responding quickly to new demand, which leaves scrap to balance the market. Copper never goes away and is infinitely recyclable.

Miles worth are strung through homes and cars and along rights of way, carrying electricity and drinking water. But a lot sits in junk yards and landfills. When prices rise, there is more incentive to get it. Copper prices are currently among the highest ever. Nearly half of demand will be met with recycled copper by 2050, up from about a third today.

Germany’s Wieland began construction in 2022 on a $100 million recycling facility in Shelbyville, Ky. Another German firm, Aurubis, is building an $800 million recycling facility in Augusta, Ga. Glencore recently bought a failed electronics recycling facility in Arkansas and will use it, too, to gather scrap. Glencore found that the concentration of copper in landfilled auto fluff can be more than twice that found in geologic mines.

Classroom discussion questions:

  1. Why the demand for copper?
  2. What makes copper recycling attractive?

OM in the News: Plastic Recycling’s Wasted Opportunity

Here at the Render household, we take our recycling very seriously. Each Tuesday, a garbage truck collects the contents of our bin. It contains lots of plastics—shampoo bottles, yogurt cups, milk jugs and more. But how much actually gets recycled?

Just 14% of waste plastic containers and packaging are sent to a recycling facility, according to the most recent EPA report. Another 17% gets incinerated. Nearly 70% goes to landfills. Waste paper and cardboard do better: 81% gets recycled. The rate for glass containers is about 31%. For aluminum, including cans and foil, 35%.

Recycling plastic is a challenge because of chemistry…and business, writes The Wall Street Journal (Oct. 22, 2024). The U.S. used to export recycling to China, but the country stopped taking most foreign waste in 2018. If American companies aren’t interested in making new products from recycled plastic, there’s no incentive to develop the infrastructure to collect, sort and reprocess old packaging.

Over five decades after soda makers first turned to plastic bottles, America’s PET bottle recycling rate stands at under 30%

There are seven categories of plastic resins. Most types aren’t even considered for curbside recycling. Meanwhile, businesses have touted their containers as recyclable as they look to keep consumers and regulators happy. Yet for recycling to work, there has to be demand for all the used plastic that we toss. Today virgin plastic is both cheaper and better.

The numbers on plastic items range from 1 through 7. But having a number doesn’t make it recyclable. PET—polyethylene terephthalate, used for soda and other drink bottles—goes by number 1 and is the most highly recycled plastic in the U.S.  at 29%. HDPE—high-density polyethylene, found in milk jugs and detergent containers—is number 2 at 27%. PP—polypropylene, which bears the number 5 and is commonly used in yogurt and butter containers—hasn’t been widely recycled in the U.S.

Most flexible supermarket bags are not accepted in curbside recycling bins. Rigid containers made from polyvinyl chloride (No. 3), polystyrene (No. 6) or multilayer plastics (No. 7) shouldn’t go in blue bins either. Sorting and cleaning a wide assortment of plastic containers is expensive, in part due to the many different pigments and other additives used. Throwing bags, six-pack rings and other flexible plastics into blue bins can mess up a recycling facility’s sorting machinery. And pieces smaller than a credit card won’t be sorted.

Classroom discussion questions:

  1. What is the recycling policy on your campus and is it effective?
  2. What is the solution to this problem?

OM in the News: The Ziploc Bag Dilemma

Billionaire Fisk Johnson has been on a crusade to contain the plastic waste crisis.  He has gone scuba diving among plumes of plastic sludge. He has funded research on how microplastics are damaging for human health. And he has made trips to Congress to ask for regulations placing responsibility on consumer-goods companies to recycle the plastic waste their products generate.

Companies like his! For 20 years, Johnson has been at the helm of one of the biggest consumer companies in the world—and a major manufacturer of products packaged in plastics. He is CEO of family-owned SC Johnson, which makes Ziploc bags, Mrs. Meyer’s Clean Day soaps and Windex cleaners.

“On one hand, I see plastic as one of the most useful, versatile and cost-effective materials developed in the last century,” Johnson testified in Congress. “On the other hand, as a lifelong conservationist, I also have seen how plastic has become one of the more profound emerging global pollutants that is affecting planetary, animal, and human health.”

That paradox is one of the most challenging questions confronting businesses—how to balance the tide of consumerism with escalating environmental concerns? Are consumers prepared to pay more and change the way they get their soap, cleaners and food to drastically reduce plastic waste?

SC Johnson still relies on plastic for packaging many of its products, and single-use plastic films like Ziplocs aren’t commonly recycled. Close to 40% of the world’s millions of tons of plastics produced are used in packaging and 85% of that plastic ends up in landfills, writes The Wall Street Journal (Oct. 13, 2024). Johnson says he has introduced sustainable packaging, including Windex bottles made from recovered plastic, but that regulations and fees on companies using plastics are needed so companies like his can remain competitive. Alternatives like glass can be costly, fragile and leave a bigger carbon footprint, he adds.

“You could say, alright, well, single-use plastics is a terrible business, and we should just get out of it,” says Johnson. “But somebody else who’s less well-intended is going to just take that up. It’s a free market. My argument is that it’s better off in our hands.”

Classroom discussion questions:

  1. Is there a solution to this dilemma?
  2. What would be your strategy as head of OM at SC Johnson?

Guest Post: The Global Initiative for Green Shipping Corridors

Our Guest Post comes from Dr. Drew Stapleton, Professor of Operations Management at the U. of Wisconsin-La Crosse

Last year, the US Department of Energy and the UK Department for Transport simultaneously requested information relating to the establishment of a green shipping corridor (GSC) between the countries. The GSCs are “maritime routes that showcase low- and zero-emission lifecycle fuels and technologies with the ambition to achieve zero greenhouse gas emissions.”

GSCs have been gaining popularity in recent years. In 2021, nearly two dozen nations expressed their support for the zero-emission routes by signing onto the Clydebank Declaration, which sets the goal of establishing at least five GSCs by 2025. Since then, development has begun on two such corridors—one between LA and Shanghai, and the other between Montreal and Antwerp. By sharing cost and risk burdens by the key stakeholders in the production of zero-emission ships and the use of green fuel oils, the GSC is conceived as an effective policy mechanism and logistics strategy to reduce GHG emissions at sea as well as to mitigate business risks in the value chain.

The ports of LA, Long Beach and Shanghai have announced the creation of the first- ever green shipping corridor designed to accelerate emissions reductions at three of the world’s largest container ports and from vessels in transit from China to Southern California. Leaders from the globe’s largest carriers are on board. Maersk, CMA CGM, Hapag-Lloyd and other shipping lines called for an end date to building vessels powered only by fossil fuels.

Maersk established a net-zero emission target to be reached in 2040. The Danish ocean carrier also aims to procure 100% net-zero steel by 2050 for use in its vessels. CMA CGM’s goal to reach net-zero emissions in its operations is set for 2050. As part of its decarbonization efforts, the French ocean carrier launched a program that incentivized shippers to return their containers early in exchange for carbon credits. Hapag-Lloyd has a goal to reach net-zero emissions in its operations by 2045. MSC has set up a goal to reach net-zero by 2050.

The U.S. believes GSCs are a key means of spurring the early adoption of zero-emission fuels and technologies that will help to achieve zero emissions no later than 2050, and calls on all countries to adopt ambitious actions to create a clean maritime future.

Classroom discussion questions:

  1. Are the emission targets realistic?
  2. Provide details regarding the Clydebank Declaration.

OM in the News: Artificial Intelligence vs. Sustainability

Google just released its environmental report. It doesn’t make for comforting reading. Despite the tech giant’s best efforts to operate its business sustainably, GHG emissions rose 13% from a year earlier and are up almost 50% compared to a 2019 baseline.

The reason? Artificial Intelligence. Or rather the expansion of data centers required to service the needs of its insatiable appetite.  But as The Wall Street Journal (July 8, 2024) writes, Google isn’t alone in this. The sustainability reports of other tech firms tell similar stories. 

Of course, it is not just the power demands of data centers that are driving up the emissions numbers. It is the construction of the infrastructure that is also carbon heavy. So we won’t know if any of the efficiencies AI brings truly offset its environmental costs until those centers are all up and running.

Google and Microsoft have vowed to slash emissions by the end of the decade, but new disclosures show their numbers are moving in the wrong direction. The AI boom is substantially responsible for the lack of progress. Large language models like ChatGPT are powered by energy-intensive data centers, and AI is projected to increase electricity demands from data centers by 50% by 2027.

To address the issue, they’re getting creative. Amazon Web Services is pursuing a deal to buy energy directly from a nuclear power plant on the East Coast. Microsoft has eyed small-scale nuclear, too, and unlike many of its peers, it is an enthusiastic purchaser of carbon offsets. Google’s sustainability report was accompanied by an announcement that it had partnered with BlackRock to build a one-gigawatt pipeline of solar capacity in Taiwan. The company also touted its data center efficiency metrics, saying Google-owned data centers are 1.8 times more energy efficient than average.

Despite these efforts, now that the numbers are trickling in, it’s becoming clear that the growth of AI has presented real challenges to tech companies that have long sought to position themselves as climate leaders.

Classroom discussion questions:

  1. High tech firms have long promoted their sustainability goals. What can they do now that AI is demanding massive new sources of power?
  2. How is this an operations management issue?

OM in the News: The Green Energy Transition Isn’t Easy

“Despite extravagant hype, the green-energy transition from fossil fuels isn’t happening. Achieving a meaningful shift with current policies is too costly,” writes The Wall Street Journal (June 25, 2024).

Globally, we spent almost $2 trillion in 2023 to try to force an energy transition. Over the past decade, solar and wind energy use has soared to record levels. But that hasn’t reduced fossil-fuel use, which increased even more over the same period.

Research shows that when countries add more renewable energy, it does little to replace coal, gas or oil. It simply adds to energy consumption. For every 6 units of green energy, less than one unit displaces fossil-fuel energy. While renewable energy sources worldwide will dramatically increase up to 2050, that won’t be enough even to begin replacing fossil fuels—oil, gas and coal will all keep increasing, too.

During the 19th-century transition to coal from wood, overall wood use increased even as coal assumed a greater percentage of energy needs. The same thing happened during the shift to oil from coal: By 1970, oil, coal, gas and wood all delivered more energy than ever before.

With a thirst for affordable energy, oil and coal energy use has doubled, hydro power has tripled and gas has quadrupled in the last 50 years. The use of nuclear, solar and wind power has surged.  During past additions of a new energy source, researchers found it has been “entirely unprecedented for these additions to cause a sustained decline in the use of established energy sources.”

Solar and wind aren’t better, because unlike fossil fuels, which can produce electricity whenever we need it, they can produce energy only according to the vagaries of daylight and weather. They are cheaper only when the sun is shining or the wind is blowing at just the right speed.

When we factor in the cost of 4 hours of storage, wind and solar energy solutions become uncompetitive with fossil fuels. Further, solar and wind are almost entirely deployed in the electricity sector, which makes up only 1/5 of all global energy use. As we struggle to find green solutions for most transportation, we have yet to address the energy needs of heating, manufacturing or agriculture. And we are ignoring the hardest sectors like steel, cement, plastics and fertilizers.

Classroom discussion questions:

  1. What can managers do to help the need for sustainable operations given these statistics?
  2. Will solar, wind, and nuclear take over the bulk of energy production? Why or why not?

OM in the News: Kicking the Plastic Can Down the Road (Again)

In 2020, dozens of major companies joined the U.S. Plastics Pact, signaling a commitment to minimizing plastic waste. Their goals included phasing out plastic straws, cutlery and intentionally-added PFAS, also known as “forever chemicals”; recycling or composting half of their plastic packaging; and making sure 100% of plastic packaging would be reusable, recyclable or compostable—all by 2025.

A NYC parade participant wears plastic bottles to raise awareness of recycling

Signatories include major brands like General Mills, Nestlé, Kraft Heinz and Coca-Cola, the largest known contributor to global branded plastic waste. Retailers like Walmart and Target and packaging and materials suppliers also signed.

Now, with the 2025 deadline close at hand, the U.S. Plastics Pact has pushed back to 2030 many of the target dates, writes The Wall Street Journal (June 11, 2024). It is not the first time companies have pushed back timelines for aggressive recycling targets. Coca-Cola and Nestlé both made public promises as far back as 2007 that didn’t come to fruition.

Today, less than 10% of plastic waste in the U.S. is recycled annually. While companies frequently tout pilot projects for plant-based plastics or paper bottles, the problem is expected to get worse in the future. Companies had hoped to collectively hit 100% reusable, recycled and compostable packaging by 2025, but the numbers remained below 50%. As for the target aimed at eliminating “problematic and unnecessary materials” including cutlery and plastic straws, not a single one of 11 materials singled out for elimination was confirmed for across-the-board removal in time for the deadline.

Three of the five targets outlined in the new road map are very similar to the 2020 version. Commitments to recycle 50% of plastic packaging, produce 100% recyclable packaging and use 30% recycled content in packaging have been pushed to 2030. Some companies cited an unrealistic time frame and potential increased costs as reasons why deadlines are being missed.

Classroom discussion questions:

  1. How can alternative product designs help meet the U.S. Plastic Pact goals?
  2. What international quality standards relate to sustainability? (See Supp. 5 in your Heizer/Render/Munson text).

 

OM in the News: Why Chocolate Prices are Soaring

Starting the end of 2024, chocolate makers that sell or produce in the EU will have to show that the cocoa they use wasn’t grown on land cut from forests since the end of 2020, reports The Wall Street Journal (May 20, 2024). In practice, it means that each morsel of cocoa that makes its way into the bloc will need to be linked to the GPS coordinates of the farm where it was harvested. Because the EU is the world’s largest chocolate market, the law will also apply to global confection giants like U.S.-based Mars, the maker of M&M’s, or Switzerland-based Nestlé.

A farmer cuts a cocoa pod to collect the beans inside in Ivory Coast

Ivory Coast, the world’s no. 1 cocoa producer, has mapped 80% of the country’s 1.55 million cocoa farms. Failure to map all  farms could take more beans out of the market, worsening current shortages. Farmers have traditionally responded to cocoa shortages by clearing forests to make way for more farmland. That’s not an option under the new EU legislation.

The EU initiative is part of a growing movement (see Supp.5) to make raw materials—including agricultural products and minerals used in smartphones and electric cars—traceable, with the goal of reducing the potential harm they inflict on the environment and local populations.

Ivory Coast was once covered in dense rainforest. But over the past 60 years, 90% of the country’s forest cover has disappeared, making it one of the countries with the highest annual rates of deforestation in the world.

For consumers, the EU law couldn’t have landed at a worse time. Unseasonable weather as well as cocoa-tree diseases have hit harvests across West Africa, the source of 70% of the world’s cocoa beans. Stockpiles this season are the lowest in 45 years, as demand outstrips supply for a fourth consecutive season. Prices for cocoa recently touched a record high of nearly $11,500 a ton, about four times as high as they were a year ago.  Those increases will come on top of a 12% rise in the price of U.S. chocolate candies in 2023 and a 14% increase in 2022.

In times of high prices, companies also often shrink the size of their products or tweak recipes to use less cocoa.

Classroom discussion questions:

  1. What are the advantages and disadvantages of this EU plan?
  2. What options do supply chain managers at Marrs and Nestle have?