Category Archives: Domestic Business

The Humble, High-Tech Shipping Container

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MARCH 4, 2014

shipping containersAsk somebody to name the most important inventions of the second half of the 20th century, and you may hear of the silicon chip, the contraceptive pill, or the hydrogen bomb. Few would answer the shipping container. “Yet those humble, standard-sized steel boxes, invented in 1956, have changed the world,” writes The Economist (Mar. 1, 2014).  Some economists think the shipping container has done more for global trade than every trade agreement signed in the past 50 years.

Even revolutionary products can be improved, though, particularly after half a century of service. One idea just proposed at the American Association for the Advancement of Science, is to make containers out of carbon-fiber composites. Such containers would be easier to use, because they would be lighter and might be folded flat when empty, saving space. A carbon-fiber container would need to travel only 120,000km (three times around the Earth) to prove cheaper than its steel equivalent. It would also be more secure, because it would be easier to scan without being opened.

That is an important consideration. In 2006, Congress passed a law requiring all containers arriving from abroad into American ports to be scanned to make sure they do not contain drugs, illegal immigrants, or fissile material. Doing this has proved hard, though, and the deadline for compliance is constantly being pushed back. Scanning steel needs high-power X-rays, or even gamma rays. These are expensive and dangerous. Carbon-fiber could be scanned with “soft” X-rays, which are easier to generate and use.

Another way to improve containers’ security is to track them properly. At the moment, authorities in a given port are usually told only about a container’s most recent movements. Better to give each container a comprehensive history, recording every port it has visited and every ship that has carried it. Such data could be crunched to detect suspicious patterns.  Carbon-fiber containers, fitted with sensors, a travel history and the ability to talk to the authorities, may one day replace many customs officials.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

The Case of the Vanishing Drugs

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FEBRUARY 25, 2014

The Aethon Tug mobile robot delivering meds at U. of Maryland hospital

“Hospitals have a drug problem.,” writes The Wall Street Journal (Feb. 24, 2014),  ”and they’re looking to technology to solve it.” The problem is the way medications are being mishandled by hospital pharmacies and wards. Inventory management is inefficient, drugs are too often misplaced, and narcotic medications are prone to theft.  In addition to turning to password-protected dispensing machines, RFID tags and roaming robots to deliver prescriptions, hospitals are adopting software that tracks every dose of medication to identify suspicious activity.

By making it easier to track medicines, the changes give nurses more time to spend with patients. Mercy Hospital in St. Louis, for example, estimates that its medication-tracking system saves the hospital $600,000 a year just in time lost from pharmacists, technicians and nurses locating meds. The new systems also help improve patient safety by identifying staffers who are siphoning drugs for their own use, a problem known as “diversion.” About 15% of health-care professionals are addicted to prescription drugs at some point in their career. These drug-related inventory losses cost millions each year. The software also allow hospitals to better manage inventory by not stocking medicines that are never used, or by keeping just enough of expensive drugs on hand to meet demand.

At the University of Maryland Medical Center, mobile robots deliver medications to nursing units. Pharmacy staffers print a label, scan and place the medication in one of the robot’s locked drawers, and then enter a destination into a program that communicates wirelessly with the robot. The robot navigates its way to the right unit, where a nurse uses a passcode and fingerprint scanner to retrieve the medication. Delivery reliability—how often the drugs arrive at the unit as promised—has increased by 23%, and delivery predictability—how often they get there within the time promised—has risen by 50%. The per-trip cost with a robot averages $2.40, down from $5.50 for hand delivery, and in its first year the system freed up 6,123 hours of nurses’ time.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Wal-Mart Ramps Up Global E-Commerce

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FEBRUARY 23, 2014

A worker at Wal-Mart's "dark store" in Mexico City

Wal-Mart says it has cracked the code for speedy, same-day grocery delivery—in Mexico. As retailers like Wal-Mart and Amazon.com rush to expand home delivery in the U.S. to groceries, the retail giant is looking across the border for help: Its high-end Mexican grocery chain, Superama, already delivers groceries in as little as 3 hours.

Wal-Mart has ramped up its global e-commerce operations over the past few years, writes The Wall Street Journal (Feb. 19, 2014), in hopes of catching up to online rival Amazon.com. The company vowed to match Amazon’s service offerings within 2 years. Currently, only about 2% of Wal-Mart’s sales come from the Web.

The company has been testing home-grocery delivery in Colorado and California, but it hasn’t announced a timeline for taking the service nationwide. It is also experimenting with grocery delivery in such cities as Buenos Aires and Santiago, Chile. Wal-Mart says it is “committed to being the online global leader in grocery delivery.”

Mexico provides $27 billion in sales and contributes 6% of the company’s global sales. Superama helped Wal-Mart achieve a 92% market share in the home delivery of groceries in Mexico. A fifth of its grocery orders arrive via mobile-phone apps, computers and tablets. The service is strongest in Mexico City, where much of Mexico’s wealth is concentrated. The capital’s snarled traffic and cramped grocery stores make delivery from Superama appealing for the well-to-do.

The majority of the grocery deliveries in Mexico come from supermarkets that are open to the public. But in the future, Wal-Mart de México plans to deploy more “dark stores”— spaces used exclusively to fulfill online orders. Such “closed” stores are more efficient: Wal-Mart’s inaugural dark store in Mexico City handles the same volume of orders as 5 stores open to the public.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.