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Industry Leaders Criticize Oil Train Regulations

By APICS staff | 0 | 0 | August 05, 2014

New safety rules will soon go into effect for oil trains in the United States, a response to the rise of shale oil transport due to fracking, Reuters reports. The changes, taken separately, seem small and incremental—fractions of inches of steel, differences of a few miles per hour in speed limits, reducing explosive gases—but taken together, the reforms have the potential to upend the practice of shipping oil by rail.

Industry leaders are pushing for legislators to ease the regulations, arguing that certain measures would only marginally improve safety but severely hurt profitability. "Safety improvements are needed but that can be done without destroying the business,” says Charles Drevna, president of American Fuel & Petrochemical Manufacturers.

A primary concern for industry representatives is speed. Fears are that speed limits for oil trains might be set at 30 miles per hour as opposed to a 40 mile-per-hour limit the industry recently agreed to. Further, oil producers fear that rules might be enacted that require crude to be de-gassed before shipping, which would add to field expenses.

GE Relies on Data Collection to Develop ‘Brilliant Factory’      

Tens of thousands of tiny sensors are quietly collecting data about each step in the manufacturing of a battery at a General Electric (GE) factory in Schenectady, New York. Sensors measure factors such as humidity on the factory floor and how much pressure a machine is applying to a particular battery component.

This is all part of an effort by GE to create a “brilliant factory,” the Washington Post reports. It involves a system in which machine parts constantly relay information to operators who can schedule maintenance before a breakdown. The entire manufacturing process stands to improve from what GE executives call the “industrial internet,” a twist on the popular term “internet of things.”

GE is developing software to manage the data collected from these thousands of sensors, says Christine Furstoss, global technology director. But, it’s a challenge to build one system that thousands of suppliers can also use. Last year, the company invested about $105 million in Pivotal, a start-up that publishes big data software. “One particular part might touch three suppliers and two GE factories,” Furstoss says. For GE, “It’s really [about] linking all of those systems together—being able to get the data to look the same, without forcing big systems out onto the suppliers.”

P&G to Focus on Top-Performing Brands

Over the next two years, Procter & Gamble (P&G) leaders plan to sell, discontinue, or eliminate as many as 100 brands in order to cut costs and tighten focus on the most lucrative product lines, reports Bloomberg Businessweek.

The company is the largest consumer products manufacturer in the world, carrying household names Tide detergents, Pampers diapers, Crest toothpaste, and Gillette razors in its portfolio. Earlier this year, P&G started selling off some of its businesses, including most of its pet food operations. Those sales reaped $2.9 billion for brands such as Iams and Eukanuba.

Currently, 70 to 80 brands constitute 90 percent of P&G’s sales and more than 95 percent of its profits in the last three years, Chief Executive Officer A.G. Lafley explains. He says marketing, research and development, manufacturing, and the company’s supply chain all will benefit from having fewer brands on which to focus.

“This will be a much smaller and less complicated company of brands that will be easier to operate,” Lafley says. The strategy will lead to a “significant rationalization” of product items and a more “significant pruning” of unproductive selling units. Company officials are not currently revealing the names of all brands that will be cut.

Boeing Warns of Potential Pilot Shortage

According to Boeing forecasts, about 533,000 commercial pilots and 584,000 maintenance technicians will be needed over the next two decades, prompting worry about a looming pilot shortage, the Seattle Times reports. US supply of these professionals is matching demand, currently, but “there could be an issue in … developing countries if we don’t come together and deal with it,” says Sherry Carbary, vice president of flight services at Boeing.

According to a Government Accountability Office report, flight schools are seeing fewer students entering programs due to high education costs and low pay at regional airlines for entry-level pilots. The report adds that many regional airlines are experiencing difficulties finding qualified entry-level first officers.

“The market is having problems right now for the first time in my 45 years with the aviation business,” says John Nance, pilot and commentator. He adds it’s nearsighted to deny that a pilot shortage looms. The greatest need for pilots and technicians will be in the Asia-Pacific region, according to Boeing forecasts. 

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