The logistics of organ transplants – supply but inefficient distribution

An essay in the Wall Street Journal by David Weill titled ‘Supply Isn’t the problem with Organ Transplants” (December 6, 2019), describes the increased supply of organs in the US but an inefficient distribution of the organs to patients who need them, thus creating apparent shortages in the minds of patients and their families. He describes the organ procurement process, managed by network of 60 non-profit organ procurement organizations (OPOs), who operate under the department of Health and Human services oversight, and sets prices. He describes the increased deaths due to the opioid crisis, the eight different thoracic and abdominal organs that can be used from the cadaver, and the rush by various teams to get these organs and match it with their patients. But the matching of available organs to patients depends on the readiness to do the transplant, and delays in that stage may end up with a situation whereby 30% of lung transplant patients die because they never found a donor. What can be done to improve the logistics of supply and demand and thus provide better use of the donor organs ? Should OPOs be measured based on their success in placing organs ? Should doctor workloads be flexed to provide priority to use available organ transplants ? Can technology help improve the grim performance metrics for organ use in the US?

Posted in Coordination, delivery, hospital, logistics, Service Operations, Supply Chain Issues, transport | Tagged , , , , , , | Leave a comment

The benefits of recycling robots to enable recycling efficiency

An article in, titled “Recycling robots raise millions from top venture firms to rescue an industry in turmoil”, describes challenges faced by US recycling companies as a result of China’s lowering of the contamination threshold for recyclable content combined with lack of sufficient labor given the healthy US economy. This has enabled the competitiveness of technology solutions using computer vision, robots, machine learning etc to identify and sort garbage into sorted piles of plastics, cartons etc. With a higher pick speed (twice as fast of humans), higher accuracy and longer working hours, automation seems to be a competitive alternative. Should landfilling prices be increased to incentivize use of automation to recycle rather then throwing all of the garbage in the landfill ? Should separation at the source i.e., moves to separation of barge by consumers be encouraged so that the robots tasks become simpler and thus improve the recycling economics ? Should greater benefits (perhaps through lower sales taxes) be provided for purchase of products with higher recylced content ?

Posted in Capacity, competitiveness, Cost, productivity, recycling, Sustainability, technology | Tagged , , , , | Leave a comment

Target claims a 90% handling cost reduction for same day shipping options

An article in titled “Target CEO says cost of handling online orders drops 90% when shoppers use same-day options” claims that shipment from stores enables retail efficiency and decreases cost by 40% associated with from a distribution center. Those costs decrease by 90% when customers pick up online orders from the store or curbside. The benefit of satisfying demand from retail locations already close to the customer provides brick-and-mortar retailers a competitive edge over Amazon. How should Amazon adjust to compete with Target – build more distribution centers ? Increase their investment in robotics at their distribution centers ? Increase Amazon lockers for customer pickup close to their offices?

Posted in Capacity, competitiveness, Cost, Ecommerce, emb2021, Supply Chain Issues | Tagged , , , , , | 21 Comments

Planning for Brexit related upheaval

An article in the Wall Street Journal (February 1, 2019) titled “Secret Truck Routes and backup Storage”, describes plans by one UK company, Heller Maschinenfabrik GmbH. The company gets 60% of its components weekly from suppliers across Europe, assembles it product and ships it to Germany. The company has purchased additional storage space, has plans to stockpile components, has plans for a secret transport route to avoid congestion in Dover and plans for additional staff. But all of this is on hold until the potential Brexit scenarios become clearer as they involve additional costs of over 150,000 pounds. Given the inability to pass on these additional costs, is Heller’s decision to stockpile components and remain in the UK the optimal decision or should the company make plans to move its assembly operations ? Should the company postpone any capacity expansion plans in the UK, as is has done in the past, until uncertainties are resolved ? Should Heller create an alternative source for assembly in Germany immediately and thus have other options to supply customers ?

Posted in Capacity, congestion, Cost, disruption, logistics, manufacturer, mgmt5612019, Operations Management | Tagged , , , , | 58 Comments

Is the inability to source custom screws a reason why it is difficult to build iPhones in the USA ?

An article in the New York Times (January 28, 2019) titled “A Tiny Screw shows why iPhones won’t be “Assembled in the USA”” describes the difficulties that Flextronics, Apple’s assembler of the high end Macbook Pro in Austin, Texas, faced in sourcing custom screws. The article describes their search for a supplier who could deliver 28,000 screws, and their option being a single supplier who could make at most 1,000 screws a week and took 22 trips to deliver the required volume. The claim is that such supply chain gaps make assembly of electronic products, which often requires design changes and quick delivery given the lean nature of the supply chains, difficult in the USA. But it also claims that availability of tooling engineers in China, and labor costs in China of $2.10 per hour, as additional reasons. Does the story of the difficulty in sourcing screws reflect poor inventory planning for components i.e., why wouldn’t Apple buy a large quantity of the required low cost components and decouple procurement from usage or is the sourcing difficulty valid given design changes ? Would assembly be easier if designers were constrained to use standard parts for low end items, such as screws, so as to alleviate the assembly bottlenecks ? Does Apple find assembling in the USA difficult because the supply chain is managed by Flextronics, Apple’s supplier, rather than Apple itself ?

Posted in Capacity, competitiveness, Cost, delivery, emb2021, Global Contexts, logistics, Operations Management, ordering | Tagged , , , , | 20 Comments

Growing retail logistics options for customers causing confusion ?

An article in the Wall Street Journal (November 18,2018) titled “Black Friday Shoppers Beware:Online Shopping Gets More Complicated” describes the many options for shopping and pickup at retail stores. At Target there are 6 options from store purchase, to curbside pickup or DriveUp, to free in-store pickup or Order Pickup, to Delivery From Store to the customer’s home for a $7 fee, to delivery same-day all year around for a $99 annual fee. These same features have different names at WalMart and Macy’s. Within the store, customers can use regular checkout or checkout using their phones. Customers are expected to use different modes depending on the task, perhaps using OrderUp around Thanksgiving and Driveup around Christmas. Will these varying options create customer confusion and decrease sales ? Should customers be provided a guarantee that the net prices will not change substantially across these different modes or should they be asked to value their time appropriately when choosing across these options ? Should stores create a choice survey to enable customers to pick the best option that suits their goals ?

Posted in consumer, Cost, delivery, Ecommerce, logistics, retailers, Service Operations | Tagged , , | Leave a comment

TSA’s plans to reduce queues at US airports

An article in the Wall Street Journal (November 14, 2018) titled “”The Struggle to Make Airport Lines a Little Less Awful” Reports that in 2018 only 2.4% of passengers in the top 40 airports waited more than 20 minutes, compared to 4.24% in 2016. However, average wait times in regular lines increased from 5.87 minutes in 2016 to 6.48 minutes in 2018, wait times during peak summer increased 10 to 12 minutes. Travelers using TSA PreCheck waited less than 5 minutes 92.6% of the time. Should the focus be on average time, or on ensuring that PreCheck, which involves paying a fee, has fast service most of the time ? Should investments in technology, such as CT scanners or facial recognition for international arrivals, be justified based on average wait time reduction, or be provided as a service for paying customers who are ready to pay for faster processing ? Should security queue time guaranteed be linked to airline premium customers, with airlines charged for such access ?

Posted in airport, Capacity, queue, Service Operations, technology | Tagged , , , , | Leave a comment

IoT success requires an ecosystem

An article in the Harvard Business Review (August 7, 2017) titled “Success with the Internet of Things (Iot) Requires chasing more than the cool factor”, claims that inter-connectivity and a partner ecosystem is a precursor to leveraging the benefit of IoT. Harley Davidson is reported to have connected their information technology (IT) systems with their operations to generate an “IoT enabled plant”. The reported savings include “reducing the production schedule from 21 days to 6 hours, operating cost savings of $200 million, improved production efficiency and reduced downtime”. What are the challenges to integration of the IT system and operations to generate savings ? What are the challenges associated with the creation of a successful ecosystem across companies ? How should incentives be adjusted to enable real-time collaboration ?

Posted in Capacity, Collaboration, Cost, IoT, Supply Chain Issues, technology | Tagged , , , , | 38 Comments

Tesla acquiring trucking capacity to complete deliveries by December 31

An article in the TechCrunch site titled “Tesla acquires trucking companies to squeeze in more deliveries before Dec. 31” describes the federal electric vehicle tax credit of $7,500 that winds down by Dec 31st, and is available only to customers who take delivery of their vehicle by year end. With production expected to rampup to 7,000 vehicles per week, delivery has been a bottleneck. The article claims that Tesla has purchased some smaller trucking companies and reserved capacity to complete deliveries. How should the company ensure that delivery capacity is synchronized with production rate and customer delivery schedules ? Since production volumes of 7,000 each week will require production of 50 cars per hour across all shifts and days, how should the supply chain be managed to eliminate surprises in delivery or manufacturing ? Given earlier reports of supplier payment delays by Tesla, can suppliers be expected to cooperate to deliver the desired volumes by year end while enabling Tesla to maintain profitability ?

Posted in Capacity, car, consumer, Cost, delivery, emb2020, logistics, manufacturer, Tesla | Tagged , , , , , | 31 Comments

Should the lower shipping prices from China to the US end ?

An article in the Wall Street Journal (October 17, 2018) titled “No More Mail Privilege for China as U.S. to end deep discounts in packages” describes the classification of China as a “tier 3” country while the U.S. is a “tier 1” country, thus permitting subsidized postal rates, from 40% to 70% reduced rates, from China to the U.S. These shipments are small packages, weighing 4.4 lbs or less,from auto parts to jewelry to housewares. Does this one way subsidy provide an unfair advantage to Chinese companies over the US or a reduction in supply costs for users of these products ? Will making the transport costs symmetric in both directions result in fairer supply chain flows ? Should similar actions be taken with Singapore and other countries too ?

Posted in consumer, Cost, delivery, Global Contexts, logistics, manufacturer, Prices | Tagged , , , | 1 Comment