Squeezing Every Cent from a Barrel of Oil

Squeezing Every Cent from a Barrel of Oil

July 13, 2021

A barrel of oil is no longer a leaky cask. Rather, it is an economic concept.

As a result, creating value along the supply chain has evolved from streamlining operations to exploiting operational and commercial synergies. The emphasis has shifted from vertical integration and expertise in specialized energy sectors to a tightly coordinated system in which every opportunity to increase profit margins is pursued. The agile system has the potential to quickly address supply-and-demand imbalances through access to energy storage and a focus on spot sales rather than long-term contracts. A certain quantity of oil can only be produced once, but it can be traded multiple times to maximize profit throughout the supply chain.

 


Video Spotlight: Difficult Cooperation in the Oil Industry


This post is based on the Forbes article, Is a Complex Value Chain Squeezing Every Cent from a Barrel of Oil?, by M. Ashraf, June 23, 2021, and the YouTube video, The Terrifying Oil & Gas Shock of 2021|$10 Gas Spike, by MHFIN, July 5, 2021. Image source: Grassetto/iStock/Getty Images.

Discussion Questions:

1. Why are vertical integration and specialization along energy product lines outdated? Are those systems essentially “leaky” barrels?

Guidance: Rockefeller, the Continue reading

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Hacks and Cracks Disrupt the Supply Chain

Hacks and Cracks Disrupt the Supply Chain

July 10, 2021

Since the onset of COVID-19, shortages of products have been common.

Many shortages were the result of the pandemic, including unexpected increases in demand, and facilities shutdown due to sick workers. With the re-opening of the economy, shortages have continued. Demand spikes, coupled with organizations being unable to re-staff enough workers, has led to product shortages in areas such as lumber.

However, not all disruptions in the supply chain are directly tied to the pandemic. Recently, the Colonial Pipeline was shut down due to hackers. This pipeline is one of the largest in the world, stretching from Houston, Texas into the northeastern United States. Its 5-day shutdown led to gasoline shortages along its length.

Another disruption to supply chains is being caused by a crack in the I-40 bridge in Memphis, Tennessee.  The crack has forced the closure of the bridge for months, and temporarily shut down barge traffic on the Mississippi River. Traffic from this bridge has been diverted to the I-55 bridge, backing up traffic. Memphis hosts FedEx’s largest hub, and is a key artery for many supply chains.

Disruptions such as these illustrate weaknesses in the US infrastructure that can disrupt supply chains.


Video Spotlight:  Continue reading

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Upcycled Food Is Trending

Upcycled Food Is Trending

 

More than one third of the global food production is lost or wasted.

This is a serious problem with humanitarian, economic, and environmental implications. Inadequate handling, storage, and distribution result in food losses while limited shelf life and spoilage of perishable products contribute to food waste. One solution to the problem is the design of new products from waste and byproducts of food processing. The market success of these new products depends on their appeal to consumers and their price.

 


Video Spotlight: Upcycled Food


This post is based on The Conversation article, Upcycling’ Promises to Turn Food Waste into Your Next Meal, by R. Holcomb and D. Bellmer, June 22, 2021, and the YouTube video, Upcycled Food Becomes This Year’s Latest Food Trend, by CBS This Morning, April 17, 2021. Image source: RonBailey/E+/Getty Images.

Discussion Questions:

1. What are the consequences of food loss/waste? Could lower food production levels solve the problem?

Guidance: There are humanitarian, financial, and environmental consequences of food loss/waste. From a humanitarian standpoint, the coexistence of hunger and food loss/waste exposes the intolerable weaknesses of the food supply chains. The economic consequences of food losses are estimated to Continue reading

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