Category: Process Improvement

RESEARCH BRIEF: Understanding the foundational causes of project failure in the cellulosic biofuel industry

By Jeremy Withers, email: jbuilditbigger@gmail.com
 

Cellulosic biofuel for transportation and energy is a renewable pathway to cleaner fuels and ultimately to independence from global fossil fuels.  This pathway is becoming more focused, but with increasing obstacles like: government regulations, supply shortages, and commercial scaling of technology. Thus, leading many companies to search for funding and stakeholder control of technology, the “valley of death (Alexander and Gordon 2009)” for many evolving companies striving to achieve profitable results as fast as possible. Since 2007, 60 biofuel projects have been developed and are currently in one of the three phases of commercialization, below in figure 1. Of those projects only 12% (7) projects have been able to move into late stage commercialization

Figure 1. Front End Loading for potential commercialization (FEL) (Wesner, B. Design for sustainability)
Figure 1. Front End Loading for potential commercialization (FEL) (Wesner, B. Design for sustainability)

The remaining 88% (53) are in the following stages:  38% (23) are stalled in planning, 35% (13) have been cancelled and (8) shut down, and 15% (9) under construction.   Thus, the goal of this research is to gain an in-depth understanding of the causes for the challenges faced by those companies in the cellulosic biofuel industry.

The seven cellulosic biofuel companies in operation currently have a total capital investment of $2.128 billion. Of the seven companies in operation, five technologies have emerged.  Additionally, with so many different technologies still in play the small private investors are backing away, even though the quantity and viability of the cellulosic technology is continually being improved. Essentially, the continuing uncertainty of the existing investment risk has pulled the plug on the many financial private outlets willing to lend money.

The added cost of less external investment has left the cellulosic biofuel industry to bolster a considerably larger part of the financial risk, as well as, having to fund aligning themselves within the cellulosic industry and within the biofuel market as a whole to secure the remaining funds.

References

 

RESEARCH BRIEF: Determinants of Exports Performance

by Edgar Arias, PhD candidate, Virginia Tech

International marketing encompasses the disciplines focused on the trade of goods and services across global boundaries (CharlesDoyle, 2011).  Studying the determinants of exports performance has been one of the major priorities in the field since the 1970s.  However, despite of the tremendous attention devoted by researchers, a comprehensive theory that explains export performance is yet to be developed.  Some consider that knowledge on this field is fragmented, diverse and sometimes even inconsistent, which makes export performance one of the most contentious fields in international marketing (Katsikeas, Leonidou, & Morgan, 2000).  The globalization of businesses, and the importance of exports for industries such as the Hardwood Industry, justify and incentive additional research in pursue of a better understanding of the factors that determine the success of export ventures (Parhizkar, Miller, & Smith, 2010).

Figure 1. Synthesis of performance models (Sousa 2006)
Figure 1. Synthesis of performance models (Sousa 2006)

There have been several studies that have attempted to revise the existing literature on export performance, for example: (Leonidou, Katsikeas, & Samiee, 2002; Shaoming & Simona, 1998; Sousa, Martínez‐López, & Coelho, 2008).  These studies have been able to provide a perspective on what factors have been proposed as determinants of export performance.  Sousa, in particular, studied the literature between 1998 and 2005, and developed a framework that condenses the results of 52 papers in the export performance literature.  In general, Sousa found that most attempts of developing a framework to explain export performance indicate the presence of at least four elements: internal factors, external factors, control variables and moderating variables.  The internal factors relate to multiple dimensions of the firm: firm characteristics (e.g. size, international experience, market orientation, etc.), export marketing strategy (e.g. product, price, promotion, distribution, etc.) and management characteristics (e.g. export commitment and support, education, international experience, etc.).  External factors relate to the environment that surrounds the firm, domestically and internationally: foreign market characteristics (e.g. legal and political, environmental turbulence, cultural similarity, etc.) and domestic market characteristics (e.g. export assistance).  Control factors (variables) may be either internal or external factors that are of no interest for researcher, but need to be controlled in order to suppress any potential effect in the study.  The selection of control variable depends on the research question, so one researcher’s internal or external variable can be another researcher’s control variable and vice versa.  Finally, moderating variables are those that influence the relationship between independent and dependent variables.  Not all studies accounted by Sousa’s in his literature review include either control of moderating variables.  Figure 1 depicts Sousa et al synthesis of performance models.

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Using an A3 to Implement Lean and Energy Saving Recommendations

by Shawn Crawford, M.F.
shawn88@vt.edu 

Energy savings as a result of lean implementation is significantly overlooked (EPA 2007).  By eliminating non-valued added activities lean production processes are missing important opportunities to improve performance and reduce costs. The Lean Energy Tool Kit ( EPA 2007) suggests a number of methods for assessing lean opportunities and reducing energy use with lean methods. An A3 will be used to format the assessment of the lean opportunities and reduce energy use by implementing lean principles.

An A3 is a common tool used in lean manufacturing to solve process problems and implement solutions (Sobek and Smalley 2008). A3s are commonly used by the Toyota Production System (TPS) to implement improvements on the process (Sobek and Smalley 2008).  TPS uses A3’s to solve problems, resulting in effective planning, decision-making, and execution (Shook 2008).  An A3 helps a company identify, frame, and then act on a problem. The following is the format for a basic A3 provided by Sobek and Smalley (2008):

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Biomass Power Plant Supports Efforts in Sustainability at CNRE

 Blacksburg, VA. December  10, 2012. The Department of Sustainable Biomaterials (SBIO) at the College of Natural Resources and Environment (CNRE) recently acquired a biomass power plant to support the SBIO Department’s academic and outreach goals. The unit is capable of generating 10 KW (Kilo-Watts) by using biomass feedstocks such as wood chips, nut shells, coconut shells, corn cobs, and manure. The unit is capable of producing 1KWh for every 1.2 kg of biomass.

power plant commissioning
Rick Caudill, SBIO Department’s Technician, takes notes from biomass international consultant Yaov Palatnik during the generator’s commissioning process.

The unit’s generator is powered by a 3-cylinder combustion engine that uses syngas as fuel. Syngas is produced from carbonaceous materials, such biomass, that reacts with steam or a limited amount of oxygen at temperatures above 750 C to produce mainly nitrogen, carbon monoxide and hydrogen. The gasification process dates back to 1800s where it was used to produce town gas for lighting and cooking. Wood gasifiers were also used to power motor vehicles during World War II fuel shortages. In general the gases produced from the gasification process can be used in other applications such as gas turbines for electrical production, burned for heat generation, or as a source for hydrogen source cells.

The biomass power plant is a great addition to the current and future academic efforts in sustainability at the SBIO Department. There is an increasing interest in the community to learn more about renewable materials and their potential use in energy production and how technology can be integrated in a small-scale system. Also, the SBIO Department’s research efforts will benefit from using the unit to test, characterize, and optimize many of the different type of biomass feedstocks available in the state and beyond. Finally, the undergraduate program at the SBIO Department strives in acquiring and developing systems and technology to support teaching efforts in order to form the best specialists in Sustainable Biomaterials.

If you have questions, or like to see the power plant performing, please contact Dr. Henry Quesada at quesada@vt.edu or 540 231 0978.

Integrating Lean Manufacturing Techniques and Energy Saving Practices Boost Productivity and Cuts Costs

By Dr. Henry Quesada and Dr. Brian Bond

This article was published in the November 2012 issue of Pallet Enterprise.

Cutting energy costs remains a way that many wood products firms can trim operating expenses while continuing to develop new business prospects and serve existing customers. This article reviews the most commonly implemented energy recommendations for both the U.S. manufacturing sector and the wooden pallet sector. This comparison will then help in determining how lean principles can be implemented into your energy management practices and will provide a self-assessment to guide your energy audit process.

Although the majority of wood products manufacturing businesses continue to use multiple sources of energy such as wood waste, natural gas, coal, diesel, and waste oil; electricity represents the highest energy cost (62.5%). There are many resources available to the industry to assist in identifying energy saving opportunities. One of the most helpful energy saving resources is the database of energy recommendations created by the Industrial Assessment Centers at the Department of Energy (DOE), which are research centers tasked with spreading ideas relating to industrial energy conservation.

The full article can be downloaded by following this link.