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OM Podcast #52: Renewable Natural Gas & Heavy-Duty Transportation

We hope you’re having a nice summer!

In our latest podcast, Barry and Misty interview Charles Love, renewable natural gas (RNG) expert for Love’s Alternative Energy. Together they discuss renewable natural gas, how it is produced, distributed, and used as a transportation fuel, as well as its growing role in the future of heavy-duty transportation.

During the conversation, Charles explains the difference between fossil methane and renewable natural gas, describing how RNG is created from organic sources such as food waste, animal manure, and wastewater.

Charles also discusses Love’s extensive operations, the company’s vertically integrated business model, and the important role farmers play in renewable natural gas production. Listeners will learn how renewable fuels create value throughout the supply chain while helping address environmental concerns.

Prof. Barry Render
Charles Love
Prof. Misty Blessley

 

 

 

 

 

Charles shares his perspective on where the industry is headed and why RNG is currently an attractive solution for heavy-duty trucking fleets seeking a combination of cost effectiveness and environmental benefits.

 

TRANSCRIPT LINK

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

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Meet Chuck and Barry at DSI in Orlando

Barry Render and Chuck Munson invite you to a special session at DSI-Orlando Monday, Nov. 24th at 10am in Magnolia 10. Here is the title: “An Exciting New Way to Teach (and Learn) Operations Management.”

Barry Render
Chuck Munson

To help you start the day, we will be serving fresh Krispy Kreme donuts and coffee in the session room. Or stop by the Pearson booth to say hello.

In Memoriam: Professor Martin K. Starr

A few weeks ago, the field of Operations Management lost one its most famous and brightest stars when Marty Starr passed away at age 97 here in Winter Park, Florida.

I consider myself both lucky and privileged to have worked along side Marty for over a decade at Rollins College’s Crummer Graduate School of Business. This was late in his career. Marty held degrees from MIT and Columbia (PhD in 1953) and then spent 32 teaching at the latter. But when I went on sabbatical some 25 years ago, we needed to find a visiting prof to take over my operations courses for a semester. By the best of chances, Marty agreed to take a leave from NYC for a warm winter in Winter Park. He loved it here and never went back!

Rollins gave him the title Distinguished Professor of OM–and indeed was Marty distinguished. He had served as president of the Institute of Management Sciences (now called INFORMS) in 1974 and as president of the Production and Management Society (POMS) in 1995. He was also the longest serving editor-in-chief of Management Science (1967-1982). Both organizations elected him as a Fellow and POMS even created the annual Martin  K. Starr Excellence Award in 2006.

Author of over 20 books and 100 research papers and consultant to the biggest names in industry, the world learned much from Marty’s new ideas about mass customization, modular production, and inventory control. What we learned at Rollins was that Marty was a great colleague and a fantastic teacher. He and his beloved wife, Polly, who passed away a few years ago, never missed a Crummer School or a POMS event or meeting. They were an inseparable team.

Marty is survived by his son Loren , daughter-in-law Gail, and grandson Michael. My wife and I are very happy that they live but 2 blocks away and were here to care for Marty these recent years,

Guest Post: Food Safety and the E. coli Outbreak at McDonald’s

Temple U. Prof. Misty Blessley raises a timely topic that has broad interest for those of us who are fast-food consumers.

Your Heizer/Render/Munson textbook highlights several examples of McDonald’s operations and supply chain practices. In Chapter 6, poka-yoke methods like the aluminum scoop and fry container ensure portion accuracy. Chapter 11 highlights how the company mitigates supply risks by working with multiple vendors and establishing robust contracts. Chapter 9 discusses how McDonald’s balances production flow in its hamburger assembly lines.

However, the recent E. coli outbreak prompted McDonald’s to reevaluate parts of its supply chain to maintain food safety standards. At least 75 people have been infected across 13 states—most reporting they ate a Quarter Pounder before falling ill. The states include Colorado, Montana, Nebraska, and others throughout the Midwest and West.

After tests confirmed that its beef patties were not linked to the E. coli outbreak, McDonald’s has reintroduced Quarter Pounders in several restaurants. Although the Food and Drug Administration (FDA) initially examined both the beef and slivered onions, it ruled out the patties. Early evidence indicates the onions are the likely source, but the FDA’s investigation is ongoing.

Taylor Farms, based in Salinas, California, recently issued a voluntary recall of four onion products due to possible E. coli contamination. McDonald’s identified Taylor Farms as the onion supplier for all locations connected to the outbreak and confirmed its decision to halt orders and deliveries from this supplier.

McDonald’s chief supply chain officer for North America, reassured the public that the outbreak was limited to a specific ingredient and region. He expressed confidence that all contaminated products had been removed from their supply chain and are no longer present in any McDonald’s restaurants.

This outbreak highlights the importance of quick and efficient food traceability for high-risk foods like cut onions. The Food Safety Modernization Act (FSMA) focuses on shifting the FDA’s approach from reactive to proactive. A key part is the FSMA 204 Food Traceability Rule, which requires more detailed recordkeeping for high-risk foods. The rule, discussed in OM Podcast #18: An Inside Look at the U.S. Food Supply Chain, goes into effect in 2026.

Classroom discussion questions:
1.  What are the challenges associated with traceability of cut food items from farm to fork?
2.  How do slivered onions present different food safety challenges than cooked beef patties for McDonald’s?

OM in the News: Supply Chain Management and Artificial Intelligence

Supply chains, our topic in Chapter 11, are the backbone of successful business operations, but their complex nature comes with inherent challenges. And then there’s Artificial Intelligence. AI has emerged as an important player for supply chain management, offering predictive analytics, real-time data insights and automation capabilities that drive efficiency and resilience, writes Supply & Demand Chain Executive (Aug. 17, 2023).

AI acts to mitigate risks for the supply chain by forecasting potential issues, identifying existing threats and helping decrease response time when confronted with supply chain disruptions. When there is a significant delay in response to a disruption, such as in the case of extreme weather, security events or major accidents, the result can cascade throughout the entire supply chain. Implementing AI throughout the supply chain helps firms to more quickly enact immediate and proactive responses to disruptions.

AI is also making strides in streamlining business processes in supply chains to optimally allocate resources and improve effectiveness. AI’s technology can analyze data to understand business patterns and objectives. Using AI, managers can gain a deeper understanding of business operations, and how operations at each step of the supply chain can directly affect the rest of the supply chain.

Theoretically, advancements in AI will mean less human error, quicker production processes and faster responses to supply chain disruptions. And Generative AI, a new generation of applications and natural language interfaces, will deliver additional context and allow less technical personnel across the supply chain to ask questions that will better inform decision makers.

But Supply Chain Dive (Aug. 15, 2023) takes a cautionary view with these three points:

1. SCM involves strategic decision-making, supplier relationship management and negotiation skills, all which require judgment and expertise. While AI can provide data-driven insights and recommendations, final decision-making requires human involvement.

2. SCM professionals engage in complex negotiations with suppliers, considering factors beyond price, such as quality, delivery terms and contractual obligations. Building relationships, understanding market dynamics and finding mutually beneficial agreements are areas where human skills are crucial.

3. Developing and managing supplier relationships involves trust-building, collaboration, communication and understanding the supplier’s capabilities. Humans are essential in evaluating and ensuring supplier integrity, advocating for social responsibility and strong ethical standards.

Classroom discussion questions:

  1. What are the advantages of using AI in supply chain decisions?
  2. Does the article in Supply Chain Dive contradict the one in Supply & Demand Chain Executive?

 

 

Teaching Tip: Unleashing the Power of Active OM Learning

The key to educational success in online OM education lies in the integration of active learning strategies, writes Faculty Focus (Aug. 9, 2023).  Consider the following recommendations to better engage students in online or hybrid learning environments:

Collaborative tools such as virtual whiteboards and group projects. Whiteboards enable students to brainstorm ideas and collaborate to solve problems, draw diagrams, and illustrate operations processes. Group projects serve as powerful vehicles for promoting collaboration and teamwork skills. Groups allow them to engage in shared decision-making, divide tasks, and collaborate on a common OM project.

Interactive activities. We have many interactive activities in our text that can help keep students engaged and motivated in online learning. Take our five MyLab simulations (details how to use them in this 9 minute video): inventory (Ch. 12), quality (Ch. 6), project management (Ch. 3), forecasting (Ch. 4), and supply chains (Ch. 11). Students can manipulate variables, observe outcomes, and analyze data, all within a controlled digital environment. Simulations are particularly beneficial for OM decisions, allowing students to gain hands-on experience and develop critical thinking skills.

Quizzing tools are effective in reinforcing key concepts and assessing student understanding. You can create online quizzes with multiple-choice, true/false, or fill-in-the-blank questions using platforms such as Kahoot!, Quizizz, or Google Forms. These tools often offer features like timed quizzes, leaderboards, and instant feedback, creating a gamified experience that motivates students to actively participate and strive for improvement.

Feedback mechanisms play a crucial role in the learning process. Our MyLab homework system provides instant feedback on whether a student’s answer is correct or incorrect, along with an explanation or hints to guide their understanding.

Opportunities for reflection. Reflection is an important part of active learning, as it allows students to think critically about what they’ve learned and how they can apply it. Writing assignments provide a platform for students to express their ideas and insights. For instance, after completing an OM in the News reading or watching a lecture, students can be assigned reflective essays where they critically analyze the content, connect it to real-world examples, and express their own perspectives.

Multimedia content. Our 50+ company video case studies can be used to engage students and help them visualize real-world concepts. These videos not only make the content more relatable and engaging but also enable students to observe that which cannot be shown in a classroom setting.

By using these tools, we think you can create a dynamic and engaging online learning environment for your students.

Guest Post: Forecasting and COVID

Our Guest Post comes from recently retired Temple U. Professor Howard Weiss, creator of our POM and ExcelOM software

There have been many articles and blogs written about the effect that COVID-19 is having on operations. One of the major areas that needs to be addressed is forecasting. Many companies rely on time-series forecasting as indicated in Chapter 4 of your textbook, but COVID-19 has caused the demand for some products to fall sharply, the demand for other products to rise sharply and the demand for other products to have temporary spikes mainly due to hoarding. Examples of each are in the figure and table below.

Using any of the time-series methods in these situations will cause the forecasts for 2021 and beyond to be incorrect. To overcome these problems one needs to look at using a different method or try to adapt the time-series method by replacing the outliers with demands that are more reasonable to assume had COVID not been a factor.

As the forecasting chapter indicates, rather than looking at past demand the forecasting method “may
be a subjective or intuitive prediction. It may be based on demand-driven data, such as a customer plans to purchase and projecting them into the future. Or the forecast may involve a combination of these, that is, a mathematical model adjusted by a manager’s good judgement.”

Classroom discussion questions:

  1. How could you modify the data outliers if you want to adjust a time-series method?
  2. If you change the method during COVID, how would you measure the quality of the forecast when using a new technique?

OM in the News: Seven Reasons Why It’s Hard to Find a Can of Corn

The front page of The Wall Street Journal (Oct. 14, 2020) highlights yet another fallout from the pandemic. Just when we thought there were enough paper, pasta, and PPE supplies, we are given 7 reasons the coronavirus has hobbled the supply chain for canned corn.

Problem 1: Sweet Corn Supplies Are Finite. Corn for canning makes up the smallest portion of the U.S. crop. Fresh corn is canned right after the harvest in late summer, and that yield is the entire supply for the year.

Problem 2: Land Is Limited. The small number of farmers who specialize in growing sweet corn have set planting plans for the year already.

Problem 3: Corn Is Only Harvested Once a Year. The March surge in food demand led some consumers to stockpile food. Retailers quickly blew through inventories. The next corn harvest is months away, making it hard to restock.

Problem 4: There Aren’t Enough Trucks. Trucking companies shrank their fleets last year to improve profitability. The fleet that remained was too small to handle the March surge in demand. 

Problem 5: Truckers Are Rejecting Contracts. The decrease in trucking capacity drove up prices, prompting some transportation companies to reject existing contracts.

Problem 6: Corn Is Irreplaceable. Food makers can substitute ingredients in some products, like soup or boxed dinners, when an ingredient is scarce. That’s not an option for the main ingredient in foods that are canned individually, like peas or corn.

Problem 7: Hoard Mentality. Sparse shelves begot empty shelves, as people hoarded, fearing shortages. Many products haven’t returned to pre-pandemic inventory levels. Out-of-stock levels for groceries have risen recently, indicating that supply-chain problems persist.

Canned-corn brands expect to increase production 25% over last year. But retailers are starting off with lower inventory, and they don’t know if they’ll be able to keep up with demand through the winter season.

Classroom discussion questios:

  1. What are the OM issues involved here? (Follow the 10 OM decisions outlined in your Heizer/Render/Munson text).
  2. What control do grocers have, if any?