Augusta University is Georgia's health sciences university and a national center for cyber security education. Home to the state’s only public academic medical center, Augusta’s world-class clinicians are bringing the medicine of tomorrow to patient care today. The university is comprised of nine colleges, including one of the nation's oldest medical schools, the Medical College of Georgia; the Hull College of Business; and the state's only dental school, the Dental College of Georgia.

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Dr. Richard Franza is a faculty member who formerly served as the dean of the James M. Hull College of Business. Franza's primary areas of expertise are Operations Management (OM), Management of Technology (MOT), and Project Management.

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James M. Hull College of Business

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au-expert-talks-hurricane-helenes-impact-on-the-supply-chain

Faculty, James M. Hull College of Business

Hurricane Helene tore a path of destruction beginning at Florida’s Big Bend region and stretching up through Georgia, South Carolina, North Carolina, Tennessee and Virginia. As those affected have slowly been able to grasp the scope, a different form of trouble in the aftermath is creating a ripple effect  that will be felt around the region, country and even the world.

Western North Carolina is at the heart of the problem leading to sourcing, transportation and disruption issues. While still trying to understand the full scope of the impact in the most remote areas, ongoing recovery efforts continue following the storm where the death toll has risen to over 250 as of Oct. 14.

According to Rick Franza, PhD, professor in the James M. Hull College of Business and an expert on operations and supply chain management, said lessons learned from the COVID-19 pandemic and the collapse of the Francis Scott Key Bridge at the Port of Baltimore incident earlier this year can help with mitigation of risk and recovering during these problematic times.

“The biggest thing you’re always dealing with in situations like this is uncertainty,” said Franza. “You can’t expect everything. You can’t anticipate everything, but we learned a lot from COVID and then the Baltimore bridge collapse and the supply chain disruptions those caused.”

Franza said North Carolina is a case study in disruption to the supply chain at three different points: the source, manufacturing and transportation.

“When we think about supply chain disruptions, people don’t typically think about it affecting the physical supply, but rather the transportation and logistics,” said Franza. “This one’s a little trickier because you have one industry affected by the supply of raw materials, another affected by the manufacturing of supplies and so many more will be affected by transportation problems.”

Problems in manufacturing One industry that has been heavily impacted by the storm is the medical field, particularly the manufacturing of IV fluid bags.

Baxter International, one of the largest producers of IV fluid bags in the country, has a manufacturing plant located in Marion, North Carolina. According to the American Hospital Association, the Marion plant produces 1.5 million IV bags per day, which equates to 60% of the country’s supply.

 “There are two big questions affecting the supply chain for those IV fluid bags,” said Franza. “If you lose a manufacturing facility, like the one in Marion, does another facility or a competitor have the ability to add capacity, even if it’s just a short term? The other piece of it is, even if they have the capacity, do they have the raw material inputs? So it’s a ripple effect.”

In the wake of the storm, Baxter announced its other manufacturing facilities would increase their capacity. Thanks to its new Mount Carmel Mega Distribution Center located in Mississippi, the company feels confident it will be able to meet the needs of hospitals across the country. Baxter plans to increase allocation levels for direct customers from 40% to 60% and for distributors from 10% to 60%. They are also increasing allocations for designated children’s hospitals by 100%.

Problems at the source Just outside the town of Spruce Pine, a town of less than 2,200 people located in the Blue Ridge Mountains, are two mines that produce an estimated 80% to 90% of the world’s most pure quartz. The quartz found in those mines is used in the manufacturing of semiconductors for microchips for everything from smartphones to cars to medical devices and more.

 The two companies that manage those two mines, Sibelco and The Quartz Corp, shut down operations on Sept. 26 ahead of the storm. As recovery efforts continue in the region, there remains more uncertainty as the full scope of the damage continues to be realized, and there is no certain timeline for when things will get started again.

“The issue with natural resources like quartz is, unless you’ve come up with some method of producing an artificial version of it, you can’t really make it somewhere else,” said Franza. “Since there isn’t currently an alternative, it then becomes a question of is the mine accessible or how long until it is accessible and people can get back to regular operations?”

Problems with transportation In Western North Carolina, entire roads along with buildings and other structures were wiped out as streams and rivers surged and mudslides occurred.

On top of getting the mine back up and running, there is also the problem of getting the raw quartz where it needs to go.

“Once you are able to access the ability of the mine to get back online, you then have the problem of whether the raw material can get where it needs to go to be processed,” said Franza. “A big problem in western North Carolina is entire roads are gone, and it’s not a simple repave. On top of that, Interstate 40 is estimated to be shut down until sometime next year, so transportation in that area is going to be extremely difficult for quite a while.”

 The good news is that quartz and the microchips that it is used in are not perishable items, and some chip manufacturers may have several weeks’ worth of quartz supply built up to be able to continue production. But an extended shutdown will likely mean even more chip shortages, similar to the global chip shortage that began in 2020 and lasted through 2023 due to the COVID-19 pandemic and the tightened restrictions in the countries that manufacture those chips.

The loss of roads is not the only source of recent transportation problems, as immediately following the during the storm there was a three-day disruption in imports at 36 ports, including shutting 14 down stretching from Maine to Texas, as 45,000 dockworkers went on strike over pay.

While that disruption could have caused serious issues, particularly for the upcoming holiday season, Franza said many companies have learned from previous disruptions, and most of the goods needed for Cyber Monday, Black Friday and preparing for the holiday season were already in the country.

“I have heard that somewhere between 80% to 90% of the items for the holidays are already here, so the dock workers’ strike would not have been as much of an issue for the holidays, but there would definitely have been things you’d run out of.”

 Franza said the biggest problem during situations such as this is misinformation.

“One of the biggest problems is most people are uninformed,” Ranza said. “Look at the toilet paper shortage at the beginning of COVID. If all of a sudden people rush to buy everything up and hoard it all, you can’t meet that demand so it causes even more problems. People need to be better informed because rumors start and then more problems are caused.”

But Franza reiterated that companies have learned from past events, and that planning has made the supply chain stronger.

“I think we’re better than we were four years ago because each of these crises builds our toolbox on how to plan for and deal with disruptions. It has built resiliency.”



AU expert talks Hurricane Helene’s impact on the supply chain

changes-in-college-football-continue-to-be-driven-by-dollars-and-sense

 The landscape of college sports, and particularly that of college football, has changed significantly in recent years. First, we have seen an almost constant realignment of collegiate athletic conferences, resulting in a few major mega-conferences, such as the SEC and ACC, Big  Ten and Big 12, and the disintegration of a former major conference, the Pac 12.

 Most of the other changes related to the athletes, such as the ease with which student-athletes could transfer from one school to another and the ability for them to be paid for their name, image and likeness. All of these issues were potentially pointing to new business models in college sports, but within the last week, that landscape was shaken even further.

Last week, the NCAA and its five major conferences settled multiple lawsuits to pay past and present student-athletes a total of $2.8 billion. The settlement also laid the foundation for the payments of college athletes starting in fall 2025.

“The major unresolved questions are who will get paid and how much,” said Rick Franza, PhD, professor in the Hull College of Business at Augusta University. “If we ‘follow the money,’ we see that football and basketball (particularly men’s basketball) generate almost all of the revenues, and most of the revenues comes from major conferences. Therefore, most of the player payments are going to go to football and basketball, and given the size of the relative rosters, football teams will be much more costly.”  Franza added that the settlement will further exasperate the revenue and cost differences between major conferences and their smaller conferences as well as between football and the so-called Olympic sports which generate little, if any revenue.

It was always clear that from both a revenue and cost perspective, college football is very different from other sports. Revenues are much higher for the major conferences in football, and there is not the same extent of revenue sharing as there is in basketball due to the NCAA Tournament.

On the cost side, with the new realignment of the mega conferences and expanded geographic footprints, there is a significant increase in travel costs for the Olympic sports.

“While those expanded conferences were mainly driven by football revenues, they are also making all other sports more costly. Therefore, the time has come to separate football from other sports,” said Franza.  One solution was first proposed by Chip Kelly, former Oregon and UCLA head football coach and now Ohio State offensive coordinator. He proposed a 64-school football conference in which the members would share all revenues, including television, which would more easily cover the NIL, and player pay costs. In recent months, similar proposals have been made for a college football “Super League,” which would include up to 80 schools.
 “This makes too much sense not to happen,” Franza said. “It allows the bigger football schools to share the plentiful available revenues while being able to pay the players what they will demand. At the same time, the other college sports would be able to revert to their traditional, geographical conferences and reduce travel costs driven up by the realigned mega- conferences.”  He added that two conferences, the SEC and Big Ten, the most successful under the current alignment, could delay the implementation. Franza also predicts that an agreement taking the first steps toward such a structure will be reached sometime in 2024.

“While it makes a lot of sense to go in this direction prior to the player settlement, it makes even more dollars and ‘sense’ now given the settlement,” said Franza. “While  the SEC and BigTen currently make more money than any other conference, I think they will see the light for what is best for the future of college football.”  Covering the business of sports and looking to know more? Then let us help.

Richard Franza, PhD, is available to speak with media about trending issues like inflation, small business and the economy – simply click on his icon now to arrange an interview today.


Changes in college football continue to be driven by dollars (and sense?)

with-the-port-of-baltimore-all-but-closed-how-will-the-supply-chain-be-impacted

Following the incident of the container ship crashing into the Francis Scott Key Bridge at the Port of Baltimore and the bridge collapsing, there are now some supply chain concerns. While they may not be felt right away by consumers, there are a number of businesses that will be affected by it.

 Rick Franza, PhD, professor in Augusta University's James M. Hull College of Business and an expert on operations and supply chain management, said one immediate impact is where container ships will be diverted to for offloading.

The Port of Baltimore is a major shipping hub and ranks first among U.S. ports for autos and light trucks. Now those ships will have to find other ports to unload their goods, which becomes a logistical problem as much as anything.

“Most ports on the East Coast are at 70% to 80% capacity, which is where you want to be. You don’t want to have much more than that, but they’re going to have to,” said Franza. “It could affect a good bit of the eastern half of the United States.”  Ports in Savannah, Charleston and New York, among others, will have to become the destination for those currently sitting outside Baltimore and those en route from around the world.

The good news, Franza said, is that most foreign car manufacturers have plants in the United States so it will likely only affect those consumers looking for a certain brand or even a specific model. 

 Baltimore is also one of the furthest inland ports and has the best rail service coming from it. The outbound goods coming off the ships will now face more of a transportation hurdle when they are diverted to another port.

“It’s not just the capacity of the port, that’s one thing, but it’s also their capacity of the outbound items,” he said. “It may be more trucks are needed, and new routes are needed to move inventory. It now becomes a whole different set of providers for the trucks because it’s no longer the people in Baltimore.”  Franza added companies will also have to decide which distribution centers they may want to use, whether it’s closer to the area they serve or closer to the port. All those factors affect where the items from overseas end up.

While it’s not a good scenario, at the end of the day, he feels the consumer likely won’t see much of an impact.

 “First of all it’s going to take a while before we see any effect on certain things,” Franza said. “The bad news for inflation is that it’s going to raise the cost of transportation for the goods coming off the ships. Will businesses absorb the cost or pass them along to consumers?”  Looking to know more? Then let us help.

Richard Franza, PhD, is available to speak with media about trending issues like inflation, small business and the economy – simply click on his icon now to arrange an interview today.


With the  Port of Baltimore all but closed, how will the supply chain be impacted?

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