fuel efficiency – The OM Blog by Heizer, Render, & Munson

OM in the News: Is Platooning the Next Logistics Big Wave?

Ten states in the last year have cleared the way for trucks to travel with as little as 40 feet between them, reports Supply & Demand Chain Executive (July 26, 2018). Platooning is an emerging vehicle technology in which digitally tethered convoys of 2 or more trucks travel closely together to reduce drag and increase fuel efficiency. The trucks must have a radio-based technology called vehicle-to-vehicle communications and automatic emergency braking systems.

Earlier this year, Volvo Trucks and FedEx teamed up to create a 3-truck convoy on a stretch of North Carolina 540. Volvo estimated that some fleet customers could achieve fuel savings of up to 10% using platooning.

“Automated platooning technology allows trucks to reducing aerodynamic drag, fuel consumption and tailpipe emissions,” said an industry expert. “The business case for the trucking companies is the fuel savings.” Peloton Technologies, a Calif.-based company, claims more than 7% fuel savings by trucks accelerating and braking at close distances. If the trucks can share information about braking activity, direction, speed and potential obstacles they can maintain a closer-than-usual following distance. The platoon also can reduce traffic congestion and react quickly to potential obstacles.

Most state legislatures are voting overwhelmingly in favor of the changes, which focus on loosening regulations concerning the distances driver must maintain between vehicles. In 5 years, it is estimated, the entire country will be on board. Georgia and Tennessee were the first states to fully welcome platooning, passing legislation in 2017.

Classroom discussion questions:

Why is platooning an important logistics issue?
What is the next logical step in trucking efficiency?

Video Tip: Why UPS Drivers Don’t Turn Left And You Probably Shouldn’t Either

Vehicle routing problems involve finding the best route between points

It might seem strange, but UPS delivery vans don’t always take the shortest route between stops. The company gives each driver a specific route to follow and that includes a policy that drivers should never turn through oncoming traffic unless absolutely necessary. This means that routes are sometimes longer than they have to be. So, why do they do it?

Every day, along with thousands of other companies, UPS solves versions of the vehicle routing problem (see Online Tutorial 5). In these mathematical problems, you are given a set of points and the distances between them, and you have to find the best route(s) to travel through all of them. Best is usually defined as the route with the shortest overall distance. Vehicle routing problems are used to organize many things, from coping with more delivery trucks in cities and hailing taxis to catching chickens on a farm.

UPS has designed its vehicle routing software to eliminate as many left-hand turns as possible. Typically, only 10% of the turns are left turns. As a result, the company uses 10 million gallons less fuel, emits 20,000 tons less carbon dioxide and delivers 350,000 more packages every year. The efficiency of planning routes this way has even helped the firm cut the number of trucks it uses by 1,100, bringing down the company’s total distance travelled by 28.5 million miles – despite the longer routes. The TV series Mythbusters tested this idea and confirmed that, despite many more turns, the policy of only turning right does save fuel.

Here is an entertaining 1 minute video illustrating the point. You could show it when discussing sustainability (Supp.5) or process analysis (Ch.7).

OM in the News: The Last Mile at UPS is by Golf Cart

Walking down the street today here in Winter Park, FL (temperature 83 degrees), I chatted with my local UPS driver. But, as you see in the photo, it is not a big brown truck he is driving–rather a golf cart. A large storage pod, next to my gym and about a mile away, is his supply depot and he makes several runs a day to replenish his cart and small trailer. It turns out that UPS uses pods throughout the state of Florida where it makes the most sense for golf cart deliveries.

Here are some of the advantages:

(1) Part-time employees are hired to help with this effort, creating jobs. (2) The environmental benefit to the community includes reduced noise. (3) Customers and employees like the approach. (4) UPS reduces energy usage, fuel consumption and emissions while providing an economical way to conduct business. (5) Golf cart helpers provide earlier delivery times. The majority of golf cart deliveries are made prior to 4 p.m. During the holidays, residential deliveries made using a UPS package truck driver are generally made in the late evening due to the additional volume spikes. (5) Golf carts pose an environmentally friendly method of delivering packages–the average golf cart gets 20+ miles per gallon.

A local UPS manager said: “It’s a lot more effective. We can keep the big, noisy trucks away at night by making holiday deliveries during the day. Safety is the main reason why we do it. And with blended in savings of fuel costs, we figured why not?”

Classroom discussion questions:

From an OM perspective, what are the advantages and disadvantages of the golf cart approach?
Should they be used all year round–or just seasonally?

OM in the News: From Alaska to Allegiant–Airlines Differ in Efficiency

Airlines are always obsessing over fuel costs. It’s a crucial aspect of their business, after all, and accounts for 1/3 of their operating expenses. So you might think that all the major airlines do roughly the same things to minimize their fuel use. But that doesn’t seem to be true. The Washington Post (Sept. 21, 2013) reports that there’s actually a surprising amount of variation in how airlines burn fuel. It ranked the 15 biggest U.S. airlines by fuel efficiency and found very large disparities, as seen in the attached graph.

The least efficient airline, Allegiant Air — a low-cost carrier that targets smaller airports — used 26% more fuel than the most efficient, Alaska Airlines, to achieve a similar level of transport.

So why is there such a huge disparity? Here are a few possibilities:

— Differences in technology: About 1/3 of the variation likely comes from the fact that different airlines use different technology — they don’t all deploy the most advanced, efficient aircraft. Allegiant, for instance, has a fleet of McDonnell Douglas aircraft that dates back to the 1970s. Alaska Airlines, by contrast, uses newer Boeing planes that have technologies like “winglets” to reduce fuel burn.

— Differences in operations: Technology can’t explain all the disparity in fuel efficiency. Some airlines, like Southwest, manage to operate older aircraft quite efficiently. Other airlines, like Virgin, have newer aircraft but are relatively inefficient.

— High oil prices don’t necessarily drive fuel savings. The most efficient airlines aren’t necessarily the most profitable. Allegiant was the least-efficient airline in 2010 but also the most profitable. That’s because it tends to serve airports that other airlines neglect, giving it more leverage to raise prices on routes.

Classroom discussion questions:

1. What is the difference between efficiency and effectiveness? (see p.13 in Chapter 1)

2. Why does this issue matter?

OM in the News (with video): Boeing’s 4th Generation 737 Takes Shape

If you’ve ever flown, chances are you’ve ridden on a 737. Boeing’s strategy of product enhancement (Ch.5) has made the 737 the best-selling commercial aircraft in history, with 9,745 built since 1968. The newest version, the 737 Max, which is scheduled to make its debut in 2017, is designed with new engines to burn less fuel than its three predecessors, to help airlines’ costs and leave less of a carbon footprint on the environment.

Before the Max, writes USA Today (April 14-15, 2012), there were three versions of the plane: the Original that took flight in February 1968; the Classics, which began flying passengers in 1984; and the Next Generation, which made its debut in 1998 with new wings and engines that enabled it to go farther and faster while burning less fuel. All represented enhancements in the original concept of a narrow-body jet with the ability to fly medium to long-haul distances. (Here is a great time-lapse 2.5 minute video of a 737 being built for Southwest that you can show in class).

At its most basic, the Max will be the same 737 stalwart the public has come to know. It’s a single-aisle jet that will ferry up to 215 passengers, but with higher efficiency. Outfitted with new engines, the Max will use 10% to 12% less fuel than its most current peer, the Next-Generation. That holds particular appeal for airlines, with jet fuel making up 25% to 40% of their costs, and whose profitability is threatened as the price of crude oil stays around $100 a barrel.

Even with Max, demand remains so high for the 737 that Boeing in January began delivering current model 737s at the unprecedented production pace of 35 a month. It plans to ramp up to 42 a month at the start of 2014 . Will a completely new single-aisle plane will arrive eventually? “It’s something that we’ll definitely do at some point,” says Boeing.

Discussion questions:

1. Why has Boeing chosen product enhancement over a new single aisle plane?

2. How have cell phones been enhanced over the past 2 decades?

OM in the News: UPS Turns to Lighter Trucks for Efficiency

For as many times as it has tested electric, hybrid, and other alternative powertrains for its trucks, UPS has run into the same issues of complexity and cost. Now it’s trying a simpler route to fuel savings. Although competitor FedEx and other fleet deliverers such as Staples, At&T, and Frito-Lay have turned to electric (see our blog on electric trucks on Dec.10, 2010), UPS is looking lighter. Using light-weight composite materials, the delivery company is able make trucks 1,000 pounds (about 10%) lighter than today’s familiar brown “package cars”.

USA Today (June 9,2011) reports that with less weight, the new trucks can have smaller diesel engines that save 40% on fuel use–without the complexity of high-tech batteries, hybrid systems, or other advance technologies that can run up total costs. “This technology is available to us today. We don’t have to worry about plugging it in or getting propane”, says UPS’ engineering director.

The first batch of trucks is being built by Utilimaster, in Indiana, using an Isuzu chassis, powered by a simple Isuzu 150-horsepower clean-diesel engine. Isuzu, which no longer sells cars in the US, maintains a vigorous truck operation here. It sees the new diesel as a chance to trump hybrids because “we didn’t think people were going to be able to afford a hybrid or electric vehicle”. The fuel savings don’t just come from lower weight and a smaller engine. With a sleek new look, the trucks are 13% more aerodynamic than competitors.

Comparing this approach with electric/hybrid alternatives shows once again that there is more than one way to skin the cat of increased operations efficiency.

Discussion questions:

1. What are the advantages and disadvantages of the alternatives discussed?

2. Why doesn’t every company switch to one of these new technologies?