Our latest podcast is all about data analytics. Barry Render speaks with his son, Charlie Render, president of Render Analytics, about his real world experience using data analytics to solve problems around forecasting, sustainability, and quality. Charlie shares some recommendations for students who are considering studying or about to graduate in the field of data analytics.
Prof. Howard Weiss raises an interesting issue that is in the forefront of many student’s minds.
Recently,
Shell was sued for air pollution from its plastic plant outside of Pittsburgh
The German government is being sued for allowing high levels of air pollution
Monsanto paid $100M dollars to settle a pollution suit for contaminating streams and lakes in Pennsylvania.
Your Heizer/Render/Munson textbook has a graphic (Figure 1.5) on transforming Inputs to Outputs– but perhaps one more output should be added – pollution.
Pollution is an ever-growing global concern that adversely affects the environment and human health. Reducing pollution should be part of the feedback loop. Here are 8 different types of pollution:
1. Air Pollution is one of the most widespread and harmful forms of pollution. Sources include industrial processes, vehicular emissions, agricultural activities, and natural events like wildfires and volcanic eruptions.
2. Water Pollution occurs when contaminants enter water bodies, such as rivers, lakes, oceans, and groundwater. It can stem from various sources, including industrial discharges, agricultural runoff, improper waste disposal, and sewage.
3. Soil or Land Pollution involves the contamination of the Earth’s soil with hazardous substances. This can result from improper disposal of industrial waste, agricultural chemicals, and improper landfill practices. Soil pollution negatively impacts plant and animal life.
4. Noise Pollution is the excessive or disruptive noise that interferes with normal activities, causing stress and potential health issues (and is a topic in Chapter 10). It often originates from transportation, industrial processes, urban development, and recreational activities.
5. Thermal Pollution occurs when there is a significant alteration of water temperature in natural bodies like rivers or lakes. It commonly results from the discharge of heated water from industrial processes, power plants, or nuclear facilities.
6. Light Pollution involves excessive or misdirected artificial light, which interferes with the natural darkness of the night sky.
7. Plastic Pollution is caused by the improper disposal and accumulation of plastic waste. Plastics persist in the environment for extended periods, harming wildlife and marine ecosystems.
8. Radioactive Pollution involves the presence of radioactive substances in the environment, often from nuclear power plants, nuclear accidents, or improper disposal of radioactive waste.
Addressing and mitigating these various types of pollution is crucial for safeguarding the environment and public health. Implementing sustainable practices, adopting cleaner technologies, and enforcing regulatory measures ( all topics of Supplement 5) are essential steps toward a cleaner, healthier planet.
Classroom discussion questions:
How can operations managers address each of these concerns?
Clearly industrial processes create many different types of pollution. What types of pollution do service organizations create?
Dr. Misty Blessley is Associate Professor of Supply Chain Management at Temple U.
Kraft Heinz, the fifth largest food and beverage company in the world (founded in 2015 with the merger of Kraft Foods and H.J. Heinz companies), is on a mission to reduce, recycle and replace virgin plastics in their packaging, including their tomato ketchup bottles. In 1983, as did many firms at that time, Heinz introduced plastic bottles as the packaging of choice for its famous tomato ketchup distributed to the retail grocery channel.
Virgin plastic is newly produced plastic, and Heinz has a goal of eliminating 100 million pounds by 2030. This is a reduction of 20% when compared to their 2021 baseline. Kraft Heinz recently stated: “When deciding what packages to focus on, we first see if there’s an opportunity to remove any unneeded plastic, then we look for opportunities where we can reduce plastic weight, add recycled content, or replace plastics with other types of materials, while ensuring we do not compromise the product quality and [do] meet consumer expectations.”
Kraft Heinz was able to reduce plastic by simply removing the bag from some products and worked towards their recycling objective by swapping some virgin plastic with recyclable plastic. They are also replacing their plastic ketchup bottles with a paper-based bottle made of 100% sustainably sourced wood pulp. A prototype is currently being tested, for this first of its kind in the sauce category.
Rethinking the Ketchup bottle, Heinz teams with Pulpex to deliver paper-based packaging
The firm is partnering with Pulpex, a packaging technology company focused on delivering sustainability through renewable packaging. If the bottle in the photo looks new yet familiar, it is because Pulpex is innovating with Heinz’s iconic ketchup bottle, the same one seen on Heinz ketchup (at restaurants, as an image on foil packs and dip and squeeze packs, etc.) since 1876.
Classroom discussion questions:
1. Product decisions are fundamental to firm strategy and to competitive advantage (see pages 161 – 162 of your Heizer/Render/Munson OM text). Given the need for sustainability in operations and supply chain management, why and how has packaging become part of the product decision?
2. Why do you think Kraft Heinz and Pulpex both feel that familiar looking packaging is a customer expectation?
Dr. Misty Blessley is Associate Professor of Supply Chain Management and Academic Director of Experiential Learning at Temple University
Walmart is the world’s largest retailer, with an historically strong brick and mortar presence. According to a recent article in Supply Chain Dive (June 2, 2023), “E-commerce is a growing channel for Walmart, and associated waste and packaging are some of the company’s priority areas as it tackles emissions — particularly Scope 3, or value chain, emissions.”
But what exactly are Scope 3 emissions, how is Walmart tackling emissions in this category, and why it is important to do so?
Walmart’s paper bag mailer packaging.
According to the World Resources Institute’s Greenhouse Gas Protocol, Scope 3emissions are those that occur in the upstream and downstream value chain.(Scope 1 emissions are tied to a firm’s facilities and Scope 2 emissions relate to purchased energy). What makes Scope 3 emissions so important to address is that this category is about ten times the magnitude of Scopes 1 and 2, according to Walmart’s Chief Sustainability Officer.
Walmart is tackling Scope 3 emissions in its e-commerce by replacing all plastic mailers with paper mailers. This one change will eliminate the need for 2,000 tons of difficult to recycle plastic over the next seven months. A change such as this has huge longer-term implications. Additionally, Walmart has invested in technology in about half of its fulfillment network that helps create custom-fitted packaging. This change is estimated to eliminate the need for packing filler by 60%. Following through to the customer’s hands, upon placing an order they have the option to opt out of receiving their pick-up orders in single-use plastic bags, which is expected to keep millions of bags out of circulation.
Walmart has pilots for reusable or refillable packaging in some categories. They “have a goal for all global private brand packaging to be recyclable, reusable or industrially compostable by 2025,” and they are making strides. In viewing themselves as one node in a larger supply chain, Walmart also encourages their suppliers to consider their alternatives for reducing packaging waste.
Classroom discussion questions:
In what ways is Walmart practicing good corporate social responsibility?
How has Walmart looked beyond design and production for sustainability, to include product distribution?
The history of the mining industry is littered with environmental destruction, pollution and detrimental impacts on local populations. But the raw materials it provides—including nickel, cobalt and lithium—are crucial to the transition for electric vehicles. The global race to secure a supply of these critical materials is on, but can it be done sustainably?
A nickel mining site in Sorowako, Indonesia
The big global miners’ stark message: Recycling is the only green source because most deposits contain such low concentrations of metals and minerals that, while methods can be improved to minimize damage, recovering the materials will always be messy and destructive. Most miners have been making efforts to clean up their practices. Some are even investing in recycling, but these aren’t likely to produce a meaningful supply any time soon.
Indonesia supplies about half the world’s nickel, a crucial input for EV batteries. Ford and VW are investing billions of dollars into the local supply chain as a low-cost source that they can directly control. But there are serious questions about destruction of the country’s rainforests in pursuit of the metal. Russia also mines nickel, but westerners are wary of buying from the country after its forces invaded Ukraine. New Caledonia—a French island group in the Pacific—is another possible source, but there are concerns about environmental impact there too.
Another option is to mine nickel from the seabed. It is less destructive than Indonesian sources, but environmental groups worry about damage to the relatively untouched deep sea ecosystem. A major problem is—ironically—that heightened scrutiny of new projects on environmental and social grounds is significantly raising the costs of the new mines necessary to fuel a low-carbon global economy.
Until there are significant developments in recycling, battery technologies, or both, there are tough trade-offs to be made in the transition to EVs.
Classroom discussion questions:
Why is there a shortage of mines to produce the minerals needed in EV batteries?
What are the ethical issues involved in the transition to EVs?
Big retailers are rolling out machines in their e-commerce distribution operations that make packages sized specifically to fit the items being shipped, potentially reining in some of the big volumes of cardboard generated as online shopping has grown.
Walmart is using machines from packaging-technology company Packsize that take dimensions needed to ship an item, then cut, crease and glue corrugated cardboard to make custom boxes. The machines then label and seal the packages.
Walmart said it has installed machines that churn out custom boxes at 12 of its fulfillment centers, and plans to add the technology to more. It has been able to cut down the amount of cardboard and filler material it uses per order by making individual boxes.
Amazon has also been increasing its use of made-to-fit packaging to ship items from books to shoes. It started using custom packaging in 2016 and is expanding its use of the technology.
Retailers traditionally have used boxes of set sizes to fill online orders, many of them not suited to the enormous array of products now available online. The push to deliver goods faster has also put a premium on speed in fulfillment centers, leading workers to stuff goods in the closest available boxes. But the speed and functionality of machines that make custom boxes has improved in recent years.
The accumulation of cardboard in households, trash heaps and recycling centers has been one visible result of the surge in online shopping in recent years. Each order has added to the boxes reaching Americans’ doorsteps, including containers that can be far bigger than the items inside.
Besides being better for the environment, the made-to-fit boxes can help companies cut shipping costs because the shipments take up less space in trucks and delivery vans.
Classroom discussion questions:
How do companies benefit from better packaging?
Are there other ways to improve packaging beside machines such as the one shown above?
Welcome to our newest Operations Management text feature–bimonthly podcasts on topics we think you and your OM students will find interesting.
Jay and I will be creating 8-9 minute podcasts–posted on this blog. They will be tied to specific chapters in the text. Assignable auto-graded exercises using this podcast (in the form of multiple choice questions) are available in our MyLab OM. To learn more about these assignments in MyLab, contact your Pearson rep at https://www.pearson.com/us/contact-us/find-your-rep.html
Today’s topic relates to Supplement 5, Sustainability in the Supply Chain. In it, we talk about new government regulations, the clothing industry, Apple, and greenhouse gasses. Let us know what you think. The next podcast will be released in two weeks on the topic of Blockchains.
Last year, H&M began rolling out a traceability platform for its recycled polyester and man-made cellulosic fibers, such as viscose, that can contribute to deforestation. It uses blockchain technology (see Chapter 11) to track and verify the use of sustainable fibers in garments. H&M has more than 600 commercial product suppliers who make their products in over 1,500 factories in Europe, Asia and Africa. The company says: “The closer we get to our 2030 goal for all our materials to be either recycled or sourced in a more sustainable way, the more traceability we gain.”
A host of supply-chain regulations went into effect in recent years and more are on the way, exposing companies to potential penalties and public criticism if found to be negligent. Many businesses, especially small and midsize ones, have a limited view of their supply chains and are struggling to broaden their oversight.
New European Union rules require larger companies operating there to identify, prevent and remedy risks to human rights and the environment in their supply chains, such as minimum age requirements, worker safety, pollution and biodiversity loss. There are a host of other regulatory developments threatening toaffect companies’ supply chains. These include modern slavery laws in the U.S., such as the 2021 Uyghur Forced Labor Prevention Act.
Unilever has a sprawling global supply chain, with around 54,000 suppliers in 150 countries. The company tracks commodities such as palm oil and soy with satellites, geographical data and photos. But software that simply manages supply-chain data isn’t a silver bullet as it is difficult for companies to self-police the information they get from their suppliers. One startup, Wiliot, provides tiny tracking tags the size of postage stamps that can follow goods as they move, helping companies ensure materials aren’t coming from areas at risk of deforestation.
Classroom discussion questions:
What other regulations in the US and the EU govern industry sustainability standards? (Hint: see Supp. 5 in your Heizer/Render/Munson text)
Why are supply chains so difficult to manage with respect to human rights and the environment?
Apple is adding pressure on suppliers to get on board with its carbon-neutrality goal, highlighting the difficulties in tackling greenhouse-gas emissions from global supply chains, reports The Wall Street Journal (Oct. 26, 2022). The iPhone maker said that it would review the work of suppliers to specifically decarbonize their Apple-related manufacturing, such as by running on 100% renewable energy, and track their yearly progress as it strikes supply agreements. Apple already requires suppliers to report overall emissions from their operations and energy purchases, respectively known as Scope 1 and 2 emissions.
Close to 30% of Apple’s suppliers haven’t committed to using 100% renewable energy in the production of the company’s goods. In 2020, Apple set a goal to reach carbon neutrality across its entire business by 2030, aiming to cut emissions by 75% and develop carbon-removal projects for the remaining 25% of its footprint. The gap underscores the challenge large companies face in getting their supply chains in line with their climate change goals.
Scope 3 emissions, which cover suppliers and the use of a company’s products, account for the overwhelming bulk of a company’s carbon footprint. A big problem facing companies like Apple with global supply chains is that their suppliers are largely dependent on countrywide sustainability goals. For instance, most energy available to Apple’s Chinese suppliers comes from coal. “The truth is, no company or their suppliers are on track to reducing all three scopes of emissions. Current environmental circumstances require efforts most companies cannot humanly meet,” said one industry expert.
Still, Apple said that more than 200 suppliers have said they would power all Apple-related production with 100% renewable energy by 2030. Among the suppliers to make the commitment is Foxconn, which is the biggest assembler of iPhones and has operations in China, India and other regions. Others include Corning, Nitto Denko, STMicroelectronics and Taiwan Semiconductor Manufacturing.
Apple’s Scope 3 emissions stood at 23.1 million metric tons of carbon-dioxide equivalent in 2021, declining from 27.3 million in 2017. In 2021, the company’s Scope 3 emissions accounted for more than 99% of its carbon footprint. Since many of the lagging suppliers are in emerging markets where there is a lack of access to renewable energy or affordable contracts, companies with sprawling supply chains like Apple need to encourage collaboration. “Engaging low-maturity suppliers requires close partnership and collaboration, all while supply-chain organizations grapple with conflicting priorities such as supply disruption and inflation,” said another industry leader.
Classroom discussion questions:
Why is it hard for suppliers to meet the standards Apple is setting?
Will Apple be able to reach carbon neutrality by 2030?
Additive manufacturing has long been heralded for its flexibility as a production method, writes Industry Week (Oct. 18, 2022). More recently, additive’s ability to safeguard against global supply chain challenges has helped accelerate adoption, making it a leading technology for many manufacturers. In addition, additive possesses unique benefits that are complementary to sustainability and automation, which are increasingly important to manufacturers as they look to build the factory of the future. We discuss the concept in both Chapter 5 (see page 170) and Chapter 7 (page 290).
Industrial organizations are beginning to further use additive manufacturing to achieve their environmental goals. Stricter European and U.S. regulations are driving companies to focus on environmentally friendly production methodology. For instance, Ford and Volvo are using 3D printing across their production lines and printing components, tooling and spare parts. Additive allows these goods to be produced on-demand, on-site, and at scale, eliminating the bulk of carbon emissions from transportation and delivery models. As the scale of these applications grow , they could have an even bigger impact on reducing emissions in the manufacturing sector.
And there is very little waste associated with additive. Compared to “subtractive manufacturing”, such as CNC machining, where materials are cut away and disposed of, additive manufacturing can reduce waste and materials costs by nearly 90% while also improving energy use by 25 to 50%. These benefits extend to the related supply chains and lead to more efficient production paths that help businesses lower their environmental footprints.
Additive manufacturing can also help deliver end products to users swiftly and efficiently, boosting supply chain resiliency. COVID-19 exposed the weaknesses of companies with limited flexibility that were highly dependent on traditional manufacturing setups. Hospitals and medical clinics, for example, were hit hard when the pandemic impacted global supply chains, cutting off access to much-needed medical equipment and supplies. To combat the shortage, additive manufacturing was used to produce supplies on demand quickly, locally and in low to mid volumes.
On-demand 3D printing reduces the amount of capital tied up in work-in-progress and finished goods inventories, enabling manufacturing agility. Engineers can design their parts in-house and iterate as often and as quickly as needed. Local facilities can print designs on-demand from files sent across the globe or print securely from a nearby supplier.
Classroom discussion questions:
Describe the difference between “additive” and “subtractive” manufacturing.
The majority of solar panels are ending up in landfills
Many are winding up in landfills, and in some cases, contaminating groundwater with toxic heavy metals. Only 1 in 10 panels are actually recycled. The challenge over how to handle truckloads of contaminated waste illustrates how cutting-edge environmental policy can create unforeseen problems. “The industry is supposed to be green,” said an industry expert. “But in reality, it’s all about the money.”
“This trash is probably going to arrive sooner than we expected and it is going to be huge,” writes Harvard Business Review. “While all the focus has been on building this renewable capacity, not much consideration has been put on the end of life of these technologies.” Disassembling panels and recovering the glass, silver and silicon is extremely difficult.
Highly specialized equipment, furnaces, and workers are needed. Panels are classified as hazardous materials, which require expensive restrictions on packaging, transport and storage. The economics of the process don’t make a compelling case for recycling. Only $2 to $4 worth of materials are recovered from each panel. It costs $20 to $30 to recycle a panel versus $1 to $2 to send it to a landfill.
The number of installed solar panels in the next decade will exceed hundreds of millions in California alone, and that recycling will become even more crucial as cheaper panels with shorter life spans become more popular.
A lack of consumer awareness about the toxicity of panels and how to dispose of them is part of the problem. “There’s an informational gap, a technological gap, and a financial gap,” say experts. The only solution seems to be extended producer responsibility, in which the cost of recycling is built into the cost of a product at its initial purchase. Business entities in the product chain — rather than the public — would become responsible for end-of-life costs, including recycling costs.
Classroom discussion questions:
Supp. 5 in your Heizer/Render/Munson text deals with this issue in detail. Which model(s) can be applied here?
What is the “systems view,” the “commons view,” and the “triple bottom line view” in this case?
Contrary to observations in Supplement 5 (Sustainability in the Supply Chain) of your text, an energy-starved world is turning to coal as natural-gas and oil shortages exacerbated by Russia’s war against Ukraine lead countries back to the dirtiest fossil fuel. From the U.S. to Europe to China, the world’s largest economies are increasing coal purchases to ensure sufficient supplies of electricity, despite prior pledges by many countries to reduce their coal consumption to combat climate change.
Trucks carrying coal in India, where coal powered generation hit a high this year.
Parts of the U.S. are boosting use of coal power, as high demand for electricity amid unusually hot temperatures pushes regional power grids to the brink of blackouts this summer. China, the world’s biggest coal consumer, is expanding production of the fuel and its use in power generation, spooked by shortages last year that caused country-wide electricity cuts and outages. India is also leaning hard on coal as energy demand increases.
Coal use fell in many major Western countries over the past decade, displaced by cleaner forms of energy that became more cost-competitive. Natural gas became more plentiful thanks to the American fracking boom and Russian exports to Europe. Wind and solar power also gained, buoyed by falling prices and government subsidies and mandates. In addition to Germany, Italy, France, the U.K., the Netherlands and Austria have now said they are preparing to restart coal-fired power plants, boost their production or keep them running longer than planned.
The resurgence of coal, which emits around double the carbon dioxide as natural gas, further threatens to set back international efforts to keep global temperatures under 2 degrees Celsius.
Classroom discussion questions:
Why is increasing coal consumption an issue impacting operations managers?
What are ISO 14001 and 50001 and how do they relate to this article?
To the Bumble Bee Seafood Company, improving the sustainability and the quality of packaging go hand in hand. The company just announced new outer packaging for its multipack tuna cans made of readily recyclable paperboard. It is the first shelf-stable seafood brand to replace its shrink wrap packaging with a recyclable alternative.
The paperboard is made of 100% recycled material with at least 35% post-consumer content, and is certified by a major sustainability nonprofit. The new packaging has debuted on 23 SKUs, from 4- to 12-can packages. By moving from shrink wrap to paperboard, Bumble Bee will eliminate 23 million pieces of plastic waste per year. (This is an important topic in Supplement 5 in your Heizer/Render/Munson text).
This change from shrink wrap to paperboard will move the brand from 96% to 98% readily recyclable packaging. Both the new paperboard packaging and the metal tuna cans are curbside recyclable. A company survey that found 67% of consumers wanted its product packaging to be more recyclable.
“If you think about it, the U.S. recycling system was designed 50 years ago. It was designed for paper and bottles. It’s not designed for the type of flexible plastics that we have today,” said the company’s VP of global corporate responsibility.
Classroom discussion questions:
Why is Bumble Bee making this change?
What other product designs do your students note that have become more sustainable?
For many consumers concerned about their food, packaging has become a major factor in deciding what to buy. More than 2/3 consider it important that the products they buy are in recyclable packaging, according to one report. Another study found 58% of consumers said they were likely or very likely to purchase food products in packaging that clearly states it is reusable or recyclable.
So Coors just announced that it will begin moving out of plastic rings this year from its packaging globally in favor of fully recyclable and sustainably sourced cardboard-wrap carriers. To support the move to more sustainable packaging, Coors is investing $85 million in its operations to upgrade machinery to allow its entire North American portfolio — covering more than 30 brands that currently use plastic rings — to use cardboard wrap carriers by the end of 2025. Coors estimates the move to cardboard-wrap will save 1.7 million pounds of plastic waste annually by 2025. The announcement moves Coors closer to its goal of ensuring its packaging is 100% reusable, recyclable or compostable, and consumer-facing plastic packaging is made from at least 30% recycled content by 2026.
Many sustainability-minded food companies, from Nestlé and PepsiCo to General Mills and AB InBev, have improved their packaging to help them meet their own environmental goals. Coors would be the largest beer brand in North America to move away from plastic rings.
What started out as a few companies making changes to sustainable packaging has quickly gained momentum across the industry. Nestlé is moving at least some of it Carnation Breakfast Essentials offerings from plastic bottles to Tetra Pak cartons made with paper it claims is responsibly sourced. General Mills’ Nature Valley Crunchy granola bars moved to fully recyclable plastic wrappers and PepsiCo’s Frito-Lay division is introducing a compostable bag for its Off The Eaten Path brand. Coca-Cola has introduced bottles made from 100% recycled plastic material while Mars Wrigley has created biodegradable wrappers for Skittles.
Classroom discussion questions:
Why is Coors making this move?
What is the “triple bottom line” (see page 195 in your Heizer/Render/Munson text) and how does it apply here?
Over the past five years, there has been a 71% rise in online searches for sustainable goods globally, according to The Economist. Consumers are engaging with sustainable businesses in ways that they previously ignored. This trend isn’t just in first-world countries, please click on the graphic. Consumer satisfaction in developing and emerging economies is also tied to concerns around climate change, and many want businesses to commit to protecting nature and natural systems.
According to McKinsey:
Consumers often consider a company’s environmental footprint before purchasing products.
77% of the public thinks plastic is the least environmentally responsible type of packaging. Paper was deemed the most environmentally safe material.
66% of the public (and 75% of millennials) say that they consider sustainability when they make a purchase.
Customers now align themselves with brands that are compatible with their values and priorities. With environmental stability as a high priority for many people, it’s important that operations managers do their part to lower their carbon footprint. “The shift in consumer buying, with more consumers willing to pay extra for environmentally friendly products, reinforces the need for companies to increase their commitments to responsible business practices,” said the head of sustainability at a large consulting firm.
Industries and companies are listening to their consumers about what they want. Over 50% of C-level executives in the fashion and textile industry have claimed that consumer demand is driving their brands to create sustainable products and best practices. Many of these companies have been sourcing sustainably produced raw materials to create their apparel. The trend of sourcing organic and sustainable materials has also been seen in the food, cosmetic and pharmaceutical sectors. These industries have been making a concerted effort to use sustainable materials.
Classroom discussion questions:
What are some examples of successful product designs that are sustainable? (Hint: see pages 197-8 of your Heizer/Render/Munson text).
Why is corporate social responsibility becoming more broadly accepted in C-suites?
Prof. Howard Weiss raises an interesting issue that is in the forefront of many student’s minds.
Pollution is an ever-growing global concern that adversely affects the environment and human health. Reducing pollution should be part of the feedback loop. Here are 8 different types of pollution:
Dr. Misty Blessley is Associate Professor of Supply Chain Management at Temple U.
Dr. Misty Blessley is Associate Professor of Supply Chain Management and Academic Director of Experiential Learning at Temple University
