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magazine home > archives > spring 2004 > features

When the FedEx Institute of Technology opened in November, University officials promised cutting-edge research would be a major component of the facility. Researchers at the FedEx Center for Supply Chain Management are helping fulfill that goal through innovative and surprising approaches.

Smooth Operators
by Jamie Peters

Dr. Ernest Nichols
Under the leadership of director Dr. Ernest Nichols Jr., the FedEx Center for Supply Chain Management devises creative problem-solving techniques for such diverse clients as L.L. Bean, Memphis Housing Authority and the Shelby County Criminal Justice System.

In every business model, lost time often translates to lost profits. But in a business that is essentially predicated on extending mortality's deadlines, wasted seconds also can mean the difference between a life saved and a life lost.

For health-care professionals in emergency departments, high-pressure situations arrive in sporadic bursts, pressing them to "make life and death decisions at any point in time with trauma center patients. And so they need to know what's going on all the time," says Dr. Brian Janz, associate director of the FedEx Center for Supply Chain Management at the University of Memphis.

So when the Regional Medical Center in Memphis, commonly known as the Med, wanted to understand more effectively how and where patients spent their time in the trauma center, Janz and his team adopted the same technology that Wal-Mart currently is deploying throughout its entire supply chain: Radio Frequency Identification, or RFID.

While the flow of retail goods in the Wal-Mart system and the movement of patients on gurneys through a trauma unit have almost nothing in common operationally, both outfits are using RFID toward a common goal: gaining efficiencies.

For the Med, it's an effort that is designed to improve the level of care — one that ultimately could render common complaints about endless stays in hospital emergency departments a thing of the past.

Packages, OK, but patients?

As the Med project shows, supply chain management is an expansive realm for innovative technologies. And the FedEx Center for Supply Chain Management is seizing these opportunities to conduct inventive projects in a wide range of industries.

Boiled down to its most basic elements, supply chain management is the integration and management of the flow of goods from suppliers to distributors to the end customer. In effect, the discipline involves a "collaborative effort by companies to optimize the entire system," says Dr. Ernest Nichols Jr., associate professor of supply chain management and director of the center, which is located in the FedEx Institute of Technology.

Over the past couple of decades, an increasing number of companies have developed more formalized supply chain management practices to gain a competitive edge, says Mike Dominy, senior analyst of business applications and commerce at Boston-based consulting and research firm, The Yankee Group. "Supply chain management has moved out of the back room and into the board room," Dominy says. "Executives view managing supply chains effectively as an important factor in their competitive strategies."

Drs. Janz and Otondo

At the Regional Medical Center in Memphis, U of M professor Dr. Brian Janz pushes Dr. Robert Otondo, also a U of M professor, on a gurney as part of an innovative test of radio frequency identification technology (RFID) tags that are secured to patients to account for their locations in the trauma unit.


Like most trauma centers in the United States, the Med has faced the recurring challenge of accounting for the exact whereabouts of patients at all times during their visits, according to Janz, who is also an associate professor of management information systems. His research findings indicated that the Med was unable to account for two hours of an average six-hour stay for a patient.

The test is designed to formulate whether RFID technology can answer the challenges posed by a fast-paced emergency care environment. Following research and project installation, the actual test began in February and was slated to run through March. Nearly every patient admitted to the trauma center was outfitted with an RFID tag, which is similar in size and shape to a pack of chewing gum. The battery-powered device, which contains a small chip, is attached to the patient with self-adhesive wrapping. Thedefault placement area is the ankle, says Janz.

Twenty-three pairs of antennae wired above door frames in the trauma center detect the radio signals emitted from the devices when a patient on a gurney passes by, and 23 accompanying black boxes—the RFID readers—relay the information to a database. Through an Intranet network, the system logs the tag number, the reader number and the time it passed by the reader, pinpointing the specifics of each patient's location. "With this kind of data, hospitals will be able to make proactive decisions," says Janz. When, for example, "a patient is moving toward a crowded x-ray department, hospital staff may bypass the bottleneck and divert that patient to CT scan," Janz explains.

The Med test underscores the center's increasing involvement with Memphis-based companies. In its early years, the center did most of its work with FedEx customers throughout the United States and internal FedEx projects, Nichols says. The package-shipping giant has been the center's predominant source of funding since its establishment in 1993. In turn, the center has conducted numerous projects for the company. "It is something that brings us best practices from the industry. (The center) has that at its fingertips," says Craig Simon, vice president of FedEx Solutions, who credits a project conducted by Nichols and a team in late 2002 with helping his group build the foundation to grow. "It's nice to be able to work with them in a more relaxed environment than it would be if we were bringing in a large consulting company."

The center, which is completely supported by external sources, funnels a portion of the funds it has generated through projects into the Fogelman College of Business and Economics, Nichols says. Spurred by an increased need by area businesses for graduates with expertise in supply chain management, Fogelman began offering an undergraduate major in the discipline almost two years ago, which evolved from its former logistics marketing program. "The business community here has been clamoring for a degree program in supply chain management for years," says Dr. Gregory Boller, associate professor and chair of the marketing and supply chain management department. "We (Memphis) are the distribution capital of the world."

From court to the slammer

The center has undertaken projects for clients as diverse as First Tennessee, L.L. Bean, Memphis Housing Authority and the Shelby County Criminal Justice System. If the last item on that list sounds like a non sequitur, others thought the same thing when Nichols began leading a team on the project in 2000. "Some of my colleagues were like, 'What are you doing in criminal justice?' But when you think about it, you've got a supply chain there," says Nichols.

Faced with a federal lawsuit challenging the conditions of the jail, an overcrowded population that hovered around 3,000 and a financial squeeze, the justice system needed to make some changes. "We've got a complicated system—very fragmented —and we needed to have more of a focus on efficiency," says Bill Powell, criminal justice coordinator for Shelby County.

In a two-phase project, Nichols' team devised a number of recommendations to address the manifold stresses on the system. In one key measure, the team recommended that district attorneys become involved in a screening process right after a suspect is arrested, which the system eventually adopted. "What was happening was the police would arrest someone," according to Powell. "We would send them to court and then the prosecutor would look at it and might say, 'You know this case isn't really worth anything. Let's just dismiss it.' In the meantime you've locked the person up for a few days or they've had to make bond and try to get a lawyer."

The system also started staffing judicial commissioners around the clock and on weekends, which helps expedite the release of certain individuals. "It used to be if you were arrested on Friday, you didn't go before a judge until Monday morning," Powell says. "So this would be a delay in getting your bond set and pretty much getting stuck in jail until you could get a judge to review that case."

The justice system incorporated these strategies, along with some data-driven efforts recommended by the U of M team, into a jail population management plan. The creation of Powell's job about two years ago also stemmed, in part, from the research conducted by Nichols' team. "Prior to some of our work, there was virtually no system-wide oversight or system-wide performance measurement," Nichols says. The multifaceted strategies have produced tangible results. As proof, Powell points to the system's jail population that hovered around 3,000 several years ago. Now, it's at about 2,000.

Traffic decongestant

Professor Amini
As one of the leaders of a geographical information system test at the bustling FedEx Memphis hub, U of M professor Dr. Mehdi Amini is studying how to reduce traffic congestion at what is considered to be the largest airfreight center in the world.

At the FedEx Memphis hub, airplanes, trucks, conveyors, dollies and people move with efficiency dictated by the pressures of rigidly set deadlines for delivering packages on time. At peak hours, the operation buzzes with the energy of a caffeine jolt followed by a chaser of adrenaline. But agility is as important as speed. The hub, which handled 7.29 billion pounds of cargo in 2003, is considered the largest airfreight center in the world, and a daunting number of variables keep the system in a perpetual state of controlled chaos.

As a result, the hub faces the constant challenge of traffic congestion. At the beginning of 2000, a project team led by Dr. Mehdi Amini, associate director of the FedEx Center for Supply Chain Management, and Dr. Michael Racer, director of industrial systems and engineering at the U of M, began examining ways that would help relieve bottlenecks. Major structural changes to the facility were not an option because of the sheer size of the operation and the substantial amount of capital invested in the infrastructure supporting it. The challenge for the team: finding a way to collect and analyze data of the system in an automated, timely manner.

The solution: a geographic information system, or GIS, a digital map that tracks designated points in the hub. The data is relayed to a database and translated to a user-friendly visual display. The technology enables FedEx employees to pull up detailed statistics such as 60 percent of the vehicles arriving in a certain spot at 8 p.m. are fuel trucks. The data can be used to divert a certain amount of traffic for more efficient uses of the resources. But every choice harbors the potential of a domino effect and its negative consequences. "One decision that you make as a service provider can affect the entire system in one way or another. Your decisions are not isolated," says Amini, who is also a professor of supply chain management.

Keeping that in mind, the team currently is working on the second phase to devise the most effective applications of the blueprint for managing the flow of all the different pieces of traffic through GIS. "In a dynamic system like the hub ... one night is different than another night depending on the packages that are arriving. So you cannot have a static way to manage this system," says Amini.

After all, that's not an option at the FedEx Center of Supply Chain Management, where dynamism rules.


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