Blog Post 5: A New Problem Facing Industrial Engineers

This is my fifth and final blog post. In this blog post, I am going to discuss one of the major issues that Industrial Engineers will face in the near future. This problem is the expansion of the Panama Canal. The canal is set to be completed by 2014 and will present many new challenges for anyone involved.

The Panama Canal is facing a major expansion that is doubling its overall capacity by allowing much larger vessels to transit. This means that there will be a significant increase in container shipping on both the East and Gulf coasts. The problem is finding out which third party logistics providers are ready for the sudden increase in twenty foot equivalent units.

Industrial Engineers can gather different organizations’ maximum capacities and current running capacities of warehouses to analyze. Once the data has been analyzed, the projected increase in containers can be added in. Then, data analysis can be done again using the projected numbers. At this point, recommendations can be made to the respective companies. According to the utilization percent, different measures will need to be taken.

For example, if a warehouse has a maximum capacity of 200,000 square feet and a running capacity of 180,000 square feet, the utilization percent is 0.90. Then, if you add in a 20% increase in shipping from the expansion, this warehouse will not be big enough. This could make the company much less successful than if it would have been properly prepared.

In conclusion, it is highly unlikely that all organizations will see the same increase in shipping. Therefore, each individual organization needs to do preliminary data analysis and make projections. The recommendations made to the company would be purely from the data analysis. However,  a company’s success in the future could be determined by the Panama Canal expansion and its possible impacts.