ISDS Term Project Edit Loie Final[1]

8/7/2019 ISDS Term Project Edit Loie Final[1]

1/21

Term Project

ISDS 7313 Global Operations Management

Dr. Ernest Nichols

December 3, 2010

By

Nicci Osborne

Robin Steele

Loie Walters Watkins Formatted:Font color: Red, StrikethroughFormatted:Not Strikethrough


2/21

1

Table of Contents

Business Objectives................................ ................................ ................................ ................................ .2

Market Assumptions ................................ ................................ ................................ ............................... 3

Product Description ................................ ................................ ................................ ................................ 5

Facility Location and Layout ................................ ................................ ................................ .................... 7

Supply Chain and Inventory ................................ ................................ ................................ .................... 9

Total Quality Management Systems ................................ ................................ ................................ ..... 11

Operations Strategy ................................ ................................ ................................ .............................. 12

Competitive Priorities ................................ ................................ ................................ ........................ 13

Core Competencies ................................ ................................ ................................ ............................ 14

Order Winner ................................ ................................ ................................ ................................ .... 15

Order Qualif ier ................................ ................................ ................................ ................................ .. 15

Positioning the Firm ................................ ................................ ................................ .......................... 16

Manufacturing and Costs ................................ ................................ ................................ .................. 16

Process Choice ................................ ................................ ................................ ................................ ...... 16

Capacity Determination ................................ ................................ ................................ ........................ 17

Conclusion................................ ................................ ................................ ................................ ............. 18

References ................................ ................................ ................................ ................................ ............ 20


3/21

2

Business Objectives

W

h

he r

ng ue of

echno

ogy

n var

ou

f

ed

,

apparen

ha

he demand for energy w

ncrea e a we . ur echno og

ca advance have made

fe much ea

er for u , bu hey have

a o pu a ra

n on he env

ronmen . any of he e echno og

ca dev

ce opera e on energy ha

genera

ed

hrough harmfu

ac

uch a

burn

ng coa, wh

ch reea

e

dangerou

ox

n

no

he

env

ronmen. A

hough

h

me

hod

very co

eff

c

en

for c

e

w

h

ead

y

ncrea

ng

popua

on,

no

wor

h

he harm

nf

ced upon

he env

ronmen. A good examp

e of

h

ncrea ed need for energy can be found

n Ch

na where he popu a

on ha r

en from

approx

ma e y 560,000,000

n 1950 o 1,331,534,117

n 2010. (CIT ). ecau e Ch

na ha an

abundance of coa ,

ha become he

r pr

mary ource of energy. A hough coa

co eff

c

en ,

here are ome er

ou concern when exam

n

ng he env

ronmen a effec of burn

ng h

fue .

ue

o var

ou

gae

be

ng reea

ed

no

he env

ronmen

a

a reu

of energy prac

ce

uch a

he bur

ngburn

ng of coa , he eve of carbon d

ox

de and greenhou e ga e ha grown

exponen

a

y and ha

beguno affec

he

ar

h

c

mae.

o

ar

ce cap

have beguno

hr

nk

and here ha been an

ncrea e

n he number of v

o en orm around he g obe. wh

chThe e are

a

conequence

of

he

e harmfu

ga

e

po

u

nghe env

ronmen. The

e

ame energy prob

em

are a o pre en

n he Un

ed a e , he wor d eader

n energy con ump

on. The e prob em

have cau ed Amer

can o re y on more renewab e ource of energy o decrea e he u e of non-

renewabe energy

ource

ha

are dep

e

ng a

a rap

d rae.

emand

ncrea

ng acro

he

wor d, bu upp y rema

n he ame. Th

mean ha a peop e mu f

nd a erna e me hod of

crea

ng energy. In

a

ve

uch a

former V

ce-

re

den

A

ore

o

reen campa

gn have

been formedo coun

erac

he damage we have done

o our env

ronmen. He

ore

ugge

ed

ugge ha we beg

n ax

ng b

g corpora

on who are of en re pon

b e for em

ng arge

amoun of he e ox

n hrough from he

r fac or

e . The propo a wa ha no been we

rece

ved by many compan

e c

a

m

ng who ca

mha

hey wou

d be

axed ba

ed on

unju

f

abe rea

on

.

A reen ec r

c we w

manufac ure, d

r

bu e, and ma

n a

n hydrok

ne

c urb

ne ha

generae energy

hrough

he

eady movemen

of r

ver

and oher wa

erway

.

ur ma

n

objec

ve

o reduce

he po

u

an

ha

are be

ng reea

ed

no

he env

ronmen

by offer

ng an

a erna

ve ha

bo h co effec

ve and econom

ca y fr

end y. To a

our organ

za

on

n he

effor of opera

ng

n a way ha

no harmfu un afe o he env

ronmen , we w

par ner w

h

ee producer Arce or

a . ur paper w

nc ude an ana y

of hree major ee compan

e

ha we ana yzed o arr

ve a h

conc u

on. Th

company ma

n a

n

m

ar ph

o oph

e o

ha

of

reen

ec

r

c.,

n

ha

They be

eve

n opera

ng

n a way

ha

env

ronmen

a

yconc

ou. They haveArce

or

a

emp

oy

evera

env

ronmena

manager

who

e

o

e

purpo e

o mon

or he env

ronmen a affec effec of he

r produc

on proce e are hav

ng

onhe env

ronmen and

o dev

e and

mpemen

way

ha

n wh

chhey can reduce

he

e

Comment [M1]: To whom are you referring iregards to making tech advances and having an

easier life? USA? World population?

Formatted: Highlight

Formatted: Font color: Red, Strikethrough

Formatted: Not Strikethrough

Formatted: Font color: Red


4/21

3

affec . The r da aba e con an y con en y mon or a r, wa er, energy and wa e da a fromfac

e

wor

dw

de. The company-w

de

n

rane

y

em a

ow

h

da

a

o be ava

ab

e

o every

empoyee a

any g

ven

me. I

a

o a

ow

emp

oyee

o

ay upda

ed up

o da

e on emerg

ng

echno og e , regu a ory change and he a e re earch ud e . Arce or a a o focu e on

produc ng ee ha u a nab e.,Th he p ower u age of non-renewab e re ource . o ha

hey w no have o con nuou y u e non-renewab e re ource o re-produce ee for he ame

purpoe

. Th

env

ronmen

a

awarene

wha

make

Arce

or

a

a grea

an

dea

upp

er

for

reen

ecr

c.

ur

m

ar ph

o

oph

e

w

a

ow u

o work co

abora

ve

y

o produce a

produc

ha

nnova

ve and

u

a

nab

e. We hope

ha

o

her compan

e

w

ake heed of

m rrorour proce e and do he ame for he r own compan e mp emen /adop m ar ra eg e

n

he energy and o

her

ndu

r

e

.

ur goa o make h co abora on a permanen par ner h p be ween compan e who depend

on each o her o opera e a he r op mum eve . A hough reen ec r c a new company, we

are confden

ha

he hydrok

ne

c

urb

ne

an

nnova

ve produc

ha

w

on

y become more

re evan / ne a c a we head n o he fu ure. We wan o par ner w h a we -known upp er

uch a Arce or a ear y becau e hey w g ve u he ab y and he cred b y ha we w

need a

a new company. Inve

or

w

have more confdence

n our produc

know

ng

ha

wa

produced u

ng Arceor

a

ma

er

a

. If

h

par

ner

h

p

benef

c

a

o bo

h compan

e

, we

w

con

dermore furherco

abora

on for produc

n

he fu

ure.

From a revenue per pec ve, we are conf den ha h produc w be very prof ab e and a goodnve

men

for any po

en

a

nve

or

oppor

un

y. The ma

n componen

of

h

urb

ne

he

reene Turb

ne are concre

e and

ee

, wh

ch are bo

h very

nexpen

ve renewab

e re

ource

.

ecau e of he e co effec ve componen we e ma e ha he produc on of a 250-foo urb new

co

approx

ma

e

y

x m

on do

ar

. Th

a

o

much

e

expen

ve

han

urb

ne

of a

m ar na ure ha re y on expen ve mechan ca genera or o con nuou y opera e on acon nuou ba . Wh e one can never be ure of how much energy w be genera ed over me;e

ma

e

how

ha

he

e

urb

ne

hou

d w

genera

e $2 m

on do

ar

per year wor

h of

e ec r c y. W h a 30-year produc fe-cyc e ha w genera e abou approx ma e y $60 m ondo ar per urb ne. Co of e ec r c y a con an y chang ng var ab e ha con an ychang ng, bu we e ma e ha e ec r c compan e w pay u 4-5 cen per k owa , wherea co

abou

2 cen

per k

owa

o produce. There

obv

ou

y a grea

prof

o be made

f

he

e

e

mae

prove correc

. We are a

ready curren

y

n nego

a

on

w

h

he TVA (Tenne

ee

Va ey Au hor y) (TVA) ec r c Company concern ng a mu -year con rac for he r gh o oure

ec

r

c

y produced v

a

reene Turb

ne

.TVA

TVA

owned by

he U.

!. governmen

and

a hough a corpora on, hey don make prof or rece ve money from axpayer . TVA hee ec r c y prov der for A abama, eorg a, Ken ucky, pp ,

"

or h Caro na, Tenne ee andV

rg

n

a

erv

c

ng 9 m

on peop

e (www.

va.gov/abou

va).

The ac

ua

mode

of

he

reene

Turb

ne

a comp

e

e

y new

nven

on

ha

we have pa

en

edand wou d ke o expand ou de of he Un ed ! a e g oba y o o her coun r e . Th a

produc

ha

h

gh

y popu

a

ed area

uch a

Ch

na wou

d grea

y benef

from

f u

ed correc

y.




5/21

4

Fo # # ow$ ng our p $ # o% projec% and a & econd-pha& e projec% % o % ake p # ace $ n % he ' u# f of ( ex$ co,'

reen) #

ec%r

$c p

#an

&

%o go g

#oba

#w

$ %h

%he

'reen Turb

$ne. Ch

$na w

$ # #be our f

$r

& %

$n

%erna

% $ona

#

# oca% $ on.

Market Assumptions

We expec0

0ha

0

0he marke

0w

1 2 2re

3pond po

3 1 0 1 ve

2y

0o our produc

0becau

3e

1 0

1 3

3ome

0h

1ng

0ha

0

1 3

needed. The mo3 0 popu2 ar way 0 o genera 0 e energy 1 3 0 hrough burn1 ng coa 2 , bu 0 a 0 0 he curren 0 ra 0 e

of con 3 ump0 1 on we w1 2 2 even0 ua2 2 y run ou0 of 0 h1 3 non-renewab2 e re 3 ource. The hydrok1 ne0 1 c

0 urb1 ne prov 1 de3 3 o many benef1 0 3 0 o peop2 e and 1 0 1 3 a produc 0 0 ha0 w1 2 2 on2 y become more

va2 uab2 e a3 0 he wor2 d popu2 a0 1 on con0 1 nue3 0 o 1 ncrea 3 e. 4 f cour3 e 0 here are a 2 ready vVar1 ou3

0

ype3

ofhydrok1

ne0 1

c0

urb1

ne3

0

ha0

have ju3 0

recen0 2

y begun0

o makemade a p2

ace for0

hem3

e2

ve3

1n

0he marke

0, bu

0we fee

2

0ha

0our produc

0

1 3un

1que and ha

3

0he capab

1 2 1 0 y of pene

0ra

0 1nge

3an

un0apped marke

0. The objec

0

1 3no

0

0o compe

0e, bu

0ra

0her

0o prov

1de an a

2 0erna

0 1ve

0o

0he u

3ua

2

mechan1 3 m of genera 0 1 ng energy. 4 nce peop2 e 3 ee 0 he benef1 0 3 of our produc0 , we are conf1 den0

0 ha0 1 0 w1 2 2 be 3 ucce 3 3 fu2 .

5 1m

1 2ar produc

0 3 4 0 her renewab

2e energy

0echno

2og

1e

3a

2ready

1n

0he marke

0

1nc

2ude

0he

3o

2ar

0 urb1 ne, 0 he w 1 nd 0 urb1 ne, and o0 her form3 of hydra-power genera 0 ed 0 urb1 ne3 . The 3 e produc0 3

ma1n

2y

3erve

0he

3ame purpo

3e bu

0

0hey have very d

1fferen

0way

3of genera

0 1ng energy. The

b1gge

3 0d

1fference be

0ween our produc

0and o

0her produc

0 3

1n

0he marke

0

1 3

0ha

0

0he hydrok

1ne

0 1c

0 urb1 ne 1 3 con3 0 an0 2 y genera0 1 nge3 energy. Un2 1 ke 0 he 3 un wh1 ch 3 e0 3 and 0 he w1 nd 0 ha0 cea3 e 3 0 o

b2ow,

0he curren

0 3of our r

1ver

3and ocean

3are

1n con

0 1nua

2mo

0 1on. Th

1 3w

1 2 2be an advan

0age

1n

0 he marke 0 becau3 e many governmen0 agenc 1 e 3 are 2 ook1 ng for way3 0 o con 3 0 an0 2 y genera0 e

energy. W1 0 h popu 2 a 0 1 on3 grow 1 ng a 0 3 uch a rap 1 d ra0 e 1 0 1 3 no0 enough 0 o 3 1 mp2 y add moreenergy -crea 0 1 ng re 3 ource 3 , bu 0 we mu3 0 f1 nd way3 0 o 1 ncrea3 e 0 he u3 e of0 he3 e re 3 ource 3 . 5 0 ud1 e3

3how

0ha

0becau

3e of

0h

1 3con

3 0an

0genera

0 1ng of energy, hydrok

1ne

0 1c

0urb

1ne

3are 200

0 1me

3

more powerfu2

0han w

1nd

0urb

1ne

3. A

2 0hough

3o

2ar

0urb

1ne

3have proven

0o be

3ucce

3 3fu

2

1n

3 0 a 0 e 3 3 uch a 3 F2 or1 da, 0 he1 r ma1 n prob2 em 1 3 0 ha0 0 hey are h 1 gh2 y expen3 1 ve 0 o 1 mp2 emen0 . (C1 0 e?)

In recen0 3 0 ud1 e 3 , 0 he U. 5 . 6 epar0 men0 of 7 nergy ha 3 1 den0 1 f1 ed over 500,000 po0 en0 1 a2 3 1 0 e 3

where hydropower can be1mp

2emen

0ed.

7 3 0 1 ma

0e

3

3ugge

3 0

0ha

0

0he amoun

0of energy cap

0ured

wou2d be enough

0o power over 67 m

1 2 2 1 on home

3. A 1986

3 0udy by

8

ew York Un1ver

3 1 0y of

free-f2 ow r1 ver power 1 n 0 he U5 A e 3 0 1 ma0 ed con 3 erva0 1 ve2 y 0 ha0 0 here 1 3 12,500 9 W of

undeve2 oped capac1 0 y for energy. Th1 3 1 3 wor0 h abou0 $10 b1 2 2 1 on 1 n e 2 ec0 r1 c1 0 y 3 a 2 e 3 0 oday and

equ1 va2 en0 0 o d1 3 p 2 ac1 ng 22 coa2 -f1 red power p 2 an0 3 (CIT 7 ). A3 0 he demand for energy

con0 1

nue3

0o

1ncrea

3e, we an

0 1c

1pa

0e con

3ump

0 1on

0o

1ncrea

3e by 57% from 2204

0o 2030. Th

1 3

e 3 0 1 ma0 e on 2 y con 3 1 der3 0 he curren0 amoun0 of e2 ec0 r1 c1 0 y u3 age 1 n compar1 3 on 0 o 0 he popu 2 a 0 1 on,

wh1ch

1 3expec

0ed

0o dra

3 0 1ca

2 2y

1ncrea

3e. I

0doe

3no

0

0ake

1n

0o accoun

0

0he r

1 3e

1n popu

2ar

1 0y of

produc0 3 3 uch a 3 e2 ec0 r1 c-car3 , wh 1 ch w1 2 2 cau3 e 0 he demand for e 2 ec 0 r1 c1 0 y 0 o 1 ncrea 3 e fa 3 0 er 0 han

Comment [M2]: Citehttp://www.ucsusa.org/clean_energy/technology

nd_impacts/energy_technologies/how-

hydrokinetic-energy-works.html

Comment [M3]: Citehttp://www.hydrovolts.com/opportunity.htm


6/21

5

expec@ ed. To comba@ @ he need for A ncrea B ed pe@ ro C eum uB age, many au @ omob A C e companA e B arere

Bor

@ Ang

@o car

B

Buch a

B

@he Hybr

Ad, wh

Ach opera

@e par

@ Cy par

@ Aa

C Cy on e

Cec

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Ac

A @y. A

C @hough

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A B

Beem

B

C Ake a good

Adea becau

Be

A @decrea

Be

B

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An

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A @ @ed from burn

Ang ga

Be

B,

A @

a C B o requ A re B @ ha@ we fA nd more wayB @ o genera@ e e C ec @ rA cA @ y. Th A B A B ano@ her rea B on why our

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do no@ underB @ and how @ he @ urbA ne opera @ e B , bu@ once @ hA B A nforma @ A on A B underB @ ood we expec@

grea@

Bucce

B B.

HydrokA ne@ A c energy A B a grea @ oppor@ unA @ y becau B e @ he majorA @ y of @ he popuC a @ A on C A veB A n c C oB e

proxA mA @ y @ o B ome @ ype of movA ng body of wa @ er. The pro B pec@ of crea @ A ng renewabC e energy

wA C C

be benefAc

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Coba

C

Bca

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Dany

@h

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Ae

Bare f

A C Ced w

A @h

Bma

C Cv

A C Cage

B

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@are

Coca

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Bof r

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B, cana

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B. They depend on

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many of @ he B e peopC e are C oca@ ed A n remo@ e area B of @ he worC d @ hey do no @ have acce B B @ o energy

Bource

B. The pre

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Ba

C Cow

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hydrokA ne@ A c @ urbA neB . We eB @ A ma@ e @ ha@ a B maC C @ urbA ne of 20-fee @ A n d A ame@ er wouC d B @ A C C be abC e

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wouCd

B @ A C C be enough

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Bma

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A concern we have abou@

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@he governmen

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C Cow

uB

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B.

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B

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B. We have

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Bma

C C

An capac

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@han 5 megawa

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Projec

@

B A @e

B

are @ o avo A d B en B A @ A ve and po@ en@ A a C C y hazardou B C oca@ A onB . The projec @ draf@ appC A ca@ A on @ ha@ A B

Bubm

A @ @ed for approva

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B @

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A Ced exp

Cana

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Bof how

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Be projec

@ Bw

A C Cbe

monA @

ored.E

ecauB

e@

heB

e are onC

y pA C

o@

projec@ B

@

hey muB @

be eaB A C

y removabC

e and abC

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oB hu@ down on B hor@ no@ A ce gA ven by @ he governmen @ .

Comment [M4]: Citehttp://www.hydrovolts.com/opportunity.htm

Comment [A5]: I thought Jeffrey said that he

didnt need a permit for the river, but only for th

gulf of mexico (?)

Comment [A6]: reword

Comment [A7]: Reword

Comment [A8]: ?


7/21

6

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Comment [A9]: What about the man-madeturbine?

Comment [A10]: Generati on or generator


8/21

7

similarcurrena speeds are comperablecomparable a o a haa ofa he Florida b ulfcurren a speeds foundin

ahe

bulf of

cexico.

decause it iThe sMississippi

eivers close in proximity to our

headquartersin Memphis, Tf

we will be enableenablesusto perform numerous any necessary

tests with minimaltraveltransportation expenses. d ecause these turbines can become so large in

diameter it would be very difficult to mobilize them; therefore, we will final assembly of the

turbines will take placee the actual turbines at the site of placement. The turbine contains no

moving parts and is comprised of 12 segments made of commercial off- the -shelf-products.

g nce assembled the turbine will be placed

on a boat and driven shipped out to the

selected water location. After being

stabilized,the turbine will be removed from

the first boat using smaller boatsthat which

will pull the turbine into the water. There

will be airbags underneath the blades ofthe

turbine, which will allow it to float on top

ofthe waterbefore prior to being lowered

to the river bottominto the river.h

epending on the flow of the current, the cables may be

connected to the shore banksinstead ofthe river bottom. Thisis because ifthe wateris moving

in mainly one direction it will only hitthe turbine from one angle, meaning the turbine will only

be receiving force on one side. Itis more usefulto have the cables on shore if possible because it

will be easierto transferthe electricity through the cablesifthey are not completely underwater.

g bviouslyT this willobviously not be possible in larger bodies of water because there will not be

any land thatis close enough forthe cablesto reach.

These turbines have proved to be marine life friendly because they do not disrupt the normal

routine of marine animals.i

tudies have shown thatthe majority ofsea creatures are easily able

to avoid these large turbines because they remain stagnant and emit signs of water rotation

before animals can approach the structure. They are also often rotating at speeds which are

slower than walking. Many people believe that other water activitiessuch as the capturing of

fish for commercial use is more harmful than the implementation of water turbines. d ecause

these turbines are beneficialto the environment our company will qualify for a tax credit, which

is 1 cent per kWh in the Unitedi

tates. We anticipate that the turbines will generate

approximately 4-10 watts of energy and have a 30-yearlifespan.

Comment [A11]: cite

Formatted: Strikethrough


Comment [A12]: I think they actually strive fplacement half way b/t the river bottom & the

waters surface best currents there

Comment [A13]: reword

Formatted: Font: (Default) Times New Rom

12 pt

Comment [A14]: I think a dash goes either b/

marine & life or life & friendly

Comment [A15]: cite

Comment [A16]: cite

Comment [A17]: with no editing marks, this is situated ok if we even want to use it (?)

We can delete this picture.


9/21

8

Fac ty Locat o a Layo t

Placement op the hydrokinetic turbines has been decidedupon q ith the p olloq ing issues in mind r

size op

river, current capabilities op

the river, proximity to manupacturers o

psteel, and proximity

to electricity markets. Research has shoq n that the Mississippi River provides average currents

at or above 6 miles per hourq

hichq

ill ensure the optimal ep p

iciency op

the hydrokinetic

turbines. The southern portion op

the river is also in close proximity to electricity markets locatedin the Southeast (q q q .redorbit.com

s

ne q ss

displays

t id=1321709). Green Electric has a deal in

place q ith the Tennessee u alley v uthority (T u v ) and they q ill be our p irst and primary

customer during the pilot project.

Speci p ic site locations o p the Greene Turbines consist o p one location near Greenville,

Mississippi and three locations concentrated in the portion o p the Mississippi River p rom Baton

Rouge, Louisiana to the Gulp

op

Mexico. In this section op

the river, thew

.S.x

orps op

Engineers

maintains a depth op

45peet via its series o

plocks and dams (

q q q.mvm.usace.army.mil). This

depth is necessarypor placement o

pthe turbines.

vccompanying these sites are Green Electric

vssembly and Maintenance Plants

qhich are located

qithin

pivemiles o

pthe turbine placement

site. This enables on-site employees to maintain the turbine q hile ensuring lo q transportation

emissions and costs. While maintenance o p the turbines is minimal, Green Electric believes it is

important to have a presence at each turbine site. Comment [y

]: sa

et

g here oncethee t ng marksaregone this ma should format

ok w/triangles in place


10/21

9

Green Electrics layout, both internally and externally, is supportive o our green supply chain.

Externally, Green Electric has been successul in lo

ering transportation emissions byutilizing

the Mississippi River to transport partsor assembly. This

as achieved by choosing to partner

ith a steel manu acturer ith a comprehensive EMS and a plant location on the river.

Internally, Green Electric has created departments

hich,

hile individual,

ork cohesively

to

ards a common goal. These departments include management, accounting, administration,

engineering, human resources, in ormation technology, internal audit, and operations. Green

Electric

ill start out

ith 21 employees

ith 13 o

those employees

orking in our

headquarters located in Memphis, Tennessee. The other 8 employees ill ork at our ssembly

and Maintenance Plants (2 per plant). ollo ing is a block plan and closeness matrix or the

various departments.

De

artme

t

rea Nee

e

Feet1. Management 1000

2.

ccounting 5003. dministration 2504. uman Resources 5005. In ormation Technology 10006. Internal udit 2507. Operations 2508. Engineering* 250

Tota

4000

oe

e

Factor

De artme

t 1 2 3 4 5 6 7 81. Management 10 7 4 8 10 92. j ccounting 3 4 2 10 7 23. j dministration 9 10 8 3 44. k uman Resources 2 5 3 25. In l ormation Technology 2 4 56. Internal j udit 2 2

Greene

TurbineSite


11/21

10

7. Operationsm

58. n ngineering* m

8 1 2 6

7 4 3 5

Proposedo

ayout

Supply Chain and Inventory

Green

lectric believesthat our product and mission require the implementation ofGreen

upply

Chain Management (GSCM). Truly effective GSCM requires that an organization examine the

environmental practices throughout the entire value chain. This includes the environmental

impact from operations, suppliers, warehousing, transportation, product use and product disposal

(

arnall, 2006). The lifecycle impact of a product ranging from shipability, energy

consumption, offgassing, service requirements and end-of-life disposal or recycling, must be

taken into consideration (http://whitepapers.technologyevaluation.com/vendor/96/ ifs) eedale,

2010) Green lectric began searching for a steel manufacturing partnerthat would support our

green supply chain managementstrategy. After researching three steel manufacturersin the U.S.

(ArcelorMittal, U.S. Steel, and Harsco Corporation), ArcelorMittal was chosen based on the

following criteria: green standards, quality, location, materials cost, and freight costs. U.S. Steel

wasimmediately discarded as an option when research showed thatthe company was ranked as

the 8th

largest air pollution producerin the United States.

1. Since the merger ofMittalSteel and Arcelor created ArcelorMittalin 2006, ArcelorMittalthecompany has risen from the 40t

hto the 1stlargest producer ofsteelin the world

(www.worldsteel.org/?action programs&id 53). ArcelorMittal has fourteen plantsin the U.S.and since 2007, the majority ofits plants have acquired certification from the InternationalOrganization forStandardization (ISO). This ISO 14001 standard certification has been achievedin over 90% ofits plants with 100% compliance expected by the end ofthis year.(www.arcelormittal.com/index.php?lang=en&page=8).

This certification ensures that the companys environmental management system (

MS) is

operating within specific guidelines and requires that the company provide objective evidence

which is auditable. Their environmental policy, environmental managementsystem, research and

development efforts, and overall dedication to reducing their CO2 footprint convinced us that

they are an ideal manufacturing partner forGreen lectric. Therefore, the ArcelorMittal plantin

Comment [A19]: again all of the layout graph

should be on one page post edit

Formatted: Font: 11 pt, No underline

Formatted: Font: 11 pt, No underline


12/21

11

Cleveland, Ohio has been chosen as oursupply partner and willsupply Green lectric with thesteel component ofthe hydrokinetic turbines. The Cleveland plant istoday the most productive

steel mill in the world, requiring less than one worker hour to produce a ton of steel

(www.arcelormittal.com/environment/us/cleveland).

Our partnership with ArcelorMittal will help us realize business success while achieving our

environmental goals. We have similar gGoals we share include such as: reduction of waste and

direct emissions; implementation of environmental management systems ( MS); compliance

with all regulatory bodies and environmentallaws; and company-wide involvementin the effort

to ensure all aspects ofthe value chain are environmentally sound. ArcelorMittal uses ife Cycle

Assessment methodology which analyses every stage in the life of a piece ofsteel from mining

and coating, to use, and finally recycling and disposal

(www.arcelormittal.com/index.php?lang en&page 686). Itis especially important for all parties

to have open communication. ArcelorMittals esearch and z evelopmentteam are eagerto meet

regularly with Green

lectric in a constant effort to optimize production while minimizing

environmental risk.

Our green supply chain consists of the following: manufacturing of steel parts which are

delivered by boat via the Mississippi

iverto Green

lectric assembly and maintenance plants;

assembly ofthose parts by Green

lectric engineers; transport ofthe partially finished product by

an outsourced trucking company to the placement location; placement of product onto a boat

owned by Green

lectric; final assembly on the boat by Green

lectric

ngineers; placement of

the productinto the river; megawatts of power produced sold to TVA.

In conjunction with GSCM, Green

lectric is implementing an enterprise resources planning

( { ) system which will enable us to gauge, manage, and run reports on our environmental

footprint. This will be useful when communicating with our supply chain, proving compliance

with regulations and environmentallaws, and making improvementsinternally to our operations

and product design. The {

we will be using willinclude an

co FootprintManagementtool

which allows inclusion of other environmental impacts not attributable directly to the product

but to the companys operation as a whole, and amortizes it across the entire product line

( eedale, 2010). The { has been customized by our IT staffto fit our needs and will enable

every employee to cohesively view our operations. Thistype ofsystem also enablesthe different

divisions ofGreen

lectric to better understand the other divisions roles within the organization.

RawMaterials

Transport Fabrication Assembly PlacementEnergy

Company


13/21

12

Another advantage to implementing the | } ~ system is that the four on-site Assembly andMaintenance plants will have real-time accessto the exactsame information thatthe employees

at Headquarters have accessto.

Solid inventory control systems are necessary when practicing GSCM. These comprehensive

controlsystemslessen the risk of unnecessary stocksurplus and encourage a more streamlined

production practice ( } osenberg and Campbell, 1985). ue to the nature ofGreen | lectrics

business, inventory lotsize will be limited to the parts necessary forthe assembly of fourGreene

Turbines. After placement of the turbines, Green | lectric will maintain only the limited

inventory necessary for maintenance. } eplacement parts for each part used to assemble the

turbines will be housed asinventory atthe four Assembly and Maintenance plants. A base-stock

system of inventory will be implemented at each Assembly and Maintenance plant. Within the

base-stocksystem, anytime that a partistaken from inventory, it willimmediately be replaced

by oursteelsupplier, ArcelorMittal. This will ensure that anytime maintenance is needed, parts

willimmediately be available and that nottoo much inventory is being held. Also, because ofthe

information sharing capabilities of the | } ~ , every employee will be able to see real-time

numbersin inventory.

Total Quality Management Systems

Green lectric will implement a lean Total Quality Management (TQM) system. This lean

system will: help reduce waste and increase productivity; emphasize employee and departmental

interaction; encourage innovative ideas from all employees; enable strong supplier partnerships;

and aid in a low inventory maintenance. We will implement the Five S (5S) method which

consists of the five practices of sorting, straightening, shining, standardizing, and sustaining(Krajewski 2010). These practices must be done systematically and across the entire

organization. As a result, all employees will become more productive and begin to see their work

in a new a more focused manner.

We will also incorporate Total

roductive Maintenance, especially within the four Assembly and

Maintenance lants. ecause the Greene Turbine will need so little maintenance, once initial

production is complete, the engineers may have surplus time. Through T M we will establish

routine preventative maintenance times on the turbines ratherthan wait for a mechanicalissue to

arise. The engineers will also keep detailed standardized maintenance logs which will aid us post

pilot program.

Value stream mapping (VSM) will also be introduced within the lean system as a qualitative tool

t

o ai

di

nl

oweri

ng wast

e producti

on. This

will

bei

nt

roduced once operati

ons

have beeni

n pl

acefor at least six months. At that point, we will evaluate our process and practices and compare

them to a future model. The benefits of applying thistoolto the waste-removal processinclude

Formatted: No underline, Font color: Auto,

Highlight


14/21

13

reduced lead times and work-in-processinventories, reduced rework and scrap rates, and lowerindirectlabor costs (Krajewski 2010).

Thislean system will work well with our green supply chain, , and MS.

Operations Strategy

Today, environmental pollution is an issue which has the potential to lead to the extinction of

mankind on earth. Of the various kinds of pollution, air pollution needs the most immediate

attention. Global warming, an effect due to the increase in amount s ofthe green-house gases

presentin airis a very severe problem mankind is facing ( The Coastal Business JournalSpring

2009: Volume 8,

umber 1).

In order to curtail these greenhouse gas emissions, our company, Green

lectric, will

manufacture, distribute, and maintain hydrokinetic turbines. They will be sold to utility

companies forinstallation in deep flowing U.S. r

ivers. The turbines will constantly generate

energy to the nations electrical grids, thereby reducing pollutants by providing reliable

renewable electricity.

Green

lectric will partner with concrete and steel producers for the procurement of the raw

materialsto constructthe hydrokinetic machines. Our business venture will not only achieve an

ecological benefit, but also gain an economical advantage by avoiding the costly and time-

consuming effort of building a dam or power plant. Green lectric providesinnovative energy

solutions that are most affordable and maintains our commitment to a clean and safe

environment.

Competitive Priorities

A production process hasto support an organization's competitive priorities: cost, quality, time,

and flexibility. Competitive priorities are importantto the design of new services or products,

the processes that will deliver them, and the operations strategy that will develop the firms

capabilities to full them (Krajewski, 2010). Competitive priorities guide decisions on the

production system, and they must be considered when translating strategy into specific

manufacturing processes (Krajewski, 2010). Green lectrics key competitive priority is quality.

The performance and features ofthe turbine and its hydrokinetic energy are superior. They are

durable, lasting approximately 30 years and requiring little maintenance. The construction ofthe

turbines must conform to governmentspecificationsto avoid detrimentalimpactsto the marine

environmen

t. In an e-ma

ilre

spond

ing

to que

stion

sfrom The A

ssoc

ia

ted

ress

,the

nergy epartmentsaid there are more than 100 marine and hydrokinetic devices under developmentin

the United States and the world. However, due to the complexity ofthe device, most are in the

early stages of readiness, the

nergy

epartmentsaid. Furthermore, strictspecifications ofthe

Comment [A20]: is this supposed to becapitalized?


15/21

14

product lengthensstrictspecifications ofthe product lengthenthe time thatitis at risk before itbecomes obsolete.

Investment cost amountsto $6 million. However, the hydrokinetic equipment offers a lucrative

return on the investment, potentially capitalizing $60 million in revenues ($2 million in revenue

per year over a 30 yearlife cycle).

Quality is also consistent.

rocesses are designed and monitored to reduce errors, prevent

defects and achieve similar outcomes over time (Krajewski, 2010). Quality is measured using

key performance metrics and a target level of quality has been established for our product and

service. mployees are involved in quality of productions, operations, processes, and customer

service,service and efforts will be evaluated on a quarterly basis. Systems are set up to ensure

quality. Quality awareness is maintained, and it is the driver of decisions in other functional

areas.

Competitive priorities are assigned to core processesto achieve the service required to provide

complete customer satisfaction. Four core processes include: customer relationship, new

service/product development, order fulfillment, and supplier relationship (Krajewski, 2010).

Quality is key to our core processes. Itis assigned to the core processes as follows:

y Customer Relationship. The quality is consistent; information and service areerror free.

y New Service Development. Top quality is achieved because new servicesmust be carefully designed.

y Order Fulfillment. The service provided must be top notch and quality isconsistent. Once the quality level is set, it is important to achieve it everytime.

y Supplier Relationship. The quality of the inputs must adhere to the requiredspecifications. In addition, the information provided to the suppliers must beaccurate.

Core Competencies

The core competencies will allow our company to succeed in the marketplace with a competitive

advantage. One core competency is having a patent for new technology. Other competencies

include our workforce, facilities, and knowledge ofthe market.

We have a workforce thatis highly skilled and well-trained. mployees are flexible to handle

equipment arranged by function on the assembly line. Our engineers have the knowledge and

expertise necessary for installing the machinery within the turbines.

xpert mariners will

perform a vari

et

y oft

as

ks

t

o meas

ure and mai

nt

ai

nt

he wat

erways

. Thel

ogisti

cs

t

eam will

oversee the flow of goods and resources between the point of origin and the point of

consumption in orderto meetthe requirements of consumers, as well as manage the integration

of the supply chain. The logistics team will also play an intintegralracle role in producing


16/21

15

auditable documents regarding our environmental policies and our green supply chain. Anequipped workforce will allow our organization to respond to the market needs.

Facilities are ideally located to reduce lead time from our facilitiesto the installation sites. Our

facilities are flexible and able tohandle a variety ofservicesincluding manufacturing, assembly,

distribution, warehousing, and maintenance ofthe hydrokinetic turbines.

Our company has a competitive edge in regards to marketing our service.

ocal, state and

federal lawmakers and even countries abroad have a better perspective on supporting and

nurturing the green sectorthan they did in the past. They have embraced the notion of going

green more holistically and thissupport hastranslated into stimulating the green sector and the

overall economy as well. ozens ofstates are making laws requiring industriesto use renewable

energy. For example, Ohio and Iowa requires utilitiesto buy some ofits power from renewable

sources and

ew Hampshire will require itsstate to buy fuelthat contains atleastsome biodiesel(The Coastal Business JournalSpring 2009: Volume 8,

umber 1). Firms are also incorporating

green practicesinto their business models, and consumers are seeking waysto contribute to the

preservation of the environment. Thereby enabling capital to be attained more easily to market

and distribute ourservices.

Our product can be differentiated from similar products. The design of the turbine makes it

novel. Typical turbines are like underwater windmills. Their blades must knife through the

water fast enough to spin the turbine to produce electricity. The performance deteriorates when

barnacles attach to the blades, slowing them down. They are also expensive to maintain.

(http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine/)

The Greene hydro-turbine is different. It usesthe force of falling waterinside the bladesto turn

the turbine, which issealed in the middle ofthe structure. The torrent of water within this closed

system continuously spinsthe turbine. The valve system re-circulatesthe water from one tanktothe next. (http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-

turbine/). Furthermore, the Greene turbine avoids some mechanical power transmission

problems because it does not rely on the usual gear box and transmission shaft. It can be built

using simple materials and Commercial-Off-the-Shelf (COTS) parts. It can also be scaled up to

provide multiple megawatts per unit which leads to increased durability and more energy

produced.

o one, to date, has created a hydrokinetic turbine aslarge asthe Greene Turbine, the

largest being 250 feetin diameter (Greene, 2010).

Order Winner

The design of our product and an integrated supply chain are the criterions that make our

company an order winner. A couple of key attributes ofthe Greene Turbine design isthatitis

does not rely on the rotations per minute (

M) of a generator, and itisscalable, which greatlyreduces costs. Another feature is that it requires low maintenance with the valve lasting

approximately 30 years. Another unique attribute is that the turbine does not need traditional


17/21

16

gear boxes ortransmission shafts to harness the energy, eliminating problems with torque andstress ofsnapping. Finally, the size of the mechanism makes it unrivaled. The conventional

design becomes harder to implement as size increases, whereas, our invention actually works

more efficiently the largerthe scale (Greene, 2010).

Ourintegrated value chain gives us a competitive advantage.

mbedded in our operations will

be the capabilities to manufacture raw materials into specialized parts, assemble the parts to

construct the turbines, transport the turbines to be installed into the rivers, and provide

maintenance services. Furthermore, in contrast to a traditional supply chain, we have

incorporated a green supply chain. Our green supply chain gives significant considerations to

ecological as well as economic objectives and values.

Order Qualifier

Our business will achieve a level of performance for it to become an order qualifier. The

hydrokinetic apparatus can be a huge benefit. ivers are in close proximity to the majority ofthe

population, allowing easy accessto utility companies who can offer clean energy servicesto its

consumers. An advantage that hydrokinetic energy has is that it's available 24-7 unlike other

sourceslike solar and wind powerthat can't work around the clock be cause they depend on the

sun being up and the wind blowing hard enough... [Furthermore], the hydrokinetic turbines

have the ability to generate a significant amount of power with zero carbon footprint-- a big

selling point for people, companies and governments dealing with the effectthat burning fossil

fuels has on the arth's atmosphere. "The [ nergy] epartment is optimistic that marine and

hydrokinetic resources can provide another valuable option to our nation's portfolio of clean

renewable energy sources" (http://www.businessweek.com/ap/financialnews/

9I73F3O0.htm).

Positioning the Firm

Green

lectric will compete in the renewable energy sector ofthe energy & utility industry, as a

limited liability corporation ( C). Our innovative and efficient, low speed turbines create

hydrokinetic energy which allows our company to provide a reliable service to utility companies

at rates of 4-5 cents per kilowatts. The utility companies will then supply electricity to its

consumers.

Manufacturing & Costs

ue to the fact that the only materials needed for manufacturing are steel and concrete, we

anticipate these turbines to be very cost efficient. We have created a very simple model of

production, which makes it reliable and durable.

ecause these devices have low raw materialcosts, they can be produced for approximately $6 million. Hydrokinetic turbines also are

economically viable, with installation costs approximately $1,500/kW. There will also be costs


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associated with the maintenance of the equipment because they must be routinely cleaned toensure thatthey are fully functional. As far as costs of usage, we will charge either an annual fee

or a fee associated with the kilowatts of energy produced. The Greene Turbine qualifies forthe

Section 45 incremental hydropower production tax credit (1 cent per kWh) in the United States.

Process Choice

Green lectric operates within the process design as both a product-process structure and a

service-process structure. With a product-process position, the hydrokinetic turbine is

manufactured as a job process coupled with a make-to-order strategy. With a service-process

position, energy is a commodity available continuously to customers, and services are highly

standardized to assure uniformity.

The optimal process choice forthe product-processisthe job process. Customization is high and

volume for any one product is low. The workforce and equipment are flexible to handle

considerable task divergence. ids are submitted for work orders, and each new orderis handled

as a single unit (Krajewski, 2010).

A job process primarily organizes alllike resources around itself (ratherthan allocating them out

to specific products); equipment and workers capable of certain types of work are located

together. These resources process all jobs requiring thattype of work.

ecause customization is

high and most jobs have a differentsequence ofstep, this process choice creates flexible flows

through the operations ratherthan a line flow (Krajewski, 2010).

The job processis coupled with the make-to-orderstrategy in orderto satisfy the unique needs of

customers. Green lectric will employ the make-to-order approach to customer orders. This

strategy is considered suitable because of the turbine being highly configured and holding

inventory would be very expensive. The product is manufactured in low volume after the

customer order is received. Afterwards, each specialized partis assembled to build the turbine

according to governmentspecifications.

Our resource flexibility isspecialized. esource flexibility isthe ease with which employees and

equipment can handle a wide variety of products, outputlevels, duties, and functions. Members

of our workforce are highly skilled and capable of performing many tasks. Flexible, general-

purpose equipmentis used in our operations.

Our capitalintensity containslow automation. Generally, capital-intensive operations must havehigh utilization to be justifiable. Automation does not align with our competitive priority. Our


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firm offers a unique product and high-quality service that require a skilled workforce andindividual attention, causing automation to become ineffective.

Capacity Determination

In-stream river and ocean current energy projects have the highes t capacity factor of all

renewables, which can be above 98%. They operate in continuous fashion, which isimportant

for electric grid reliability and better helps the U.S. meet its growing demand for new power.

Current-based hydrokinetic energy is predictable, dependable and forecastable

(http://www.hgenergy.com/benefits.html). ecause of demand and supply uncertainty, process -

focused plants cannot do an effective job ifthey operate near their full equipment capacity. In

fact, they operate best with a comfortable level of capacity cushion.

Itis criticalthatthe turbines conform to specifications mandated by the governmentso thatthe

ecosystem remains environmentally safe. The size and quantity ofturbines are then built based

on the order that will meetthe customers need. Therefore, we will wait until more demand is

more certain before expanding capacity ofthe turbines.

Asit relatesto providing a service of hydrokinetic energy, a 250 footturbine wheel produces 23

megawatts (MW) and can power 1,000 homes at a time. A 100-foot wheel makes 1.8 million

watts. The power generated from a 30 foot diameterturbine hasthe capacity to produce 140,000

watts, which is equivalentto 1,400 100-wattlightbulbslight bulbs (Greene, 2010). Our firm has

the capacity to meet current and future demand that will enable usto make profits and growth. If

demand increases overtime, capacity willincrease also.

The capacity level forthe production ofthe turbines and harvesting hydrokinetic energy requires

a one-shift operation. If our firm were to encounter a temporary peak in demand, our process

can operate above its capacity level using employee overtime as its marginal method of

production. educing costs of purchased materials can help economies ofscale drive costs down

and make operations more efficient. Our company can take advantage of a better bargaining

position and reduced costs ofsteel by purchasing from othersupplierssuch as Wal -Mart, Home

epot, or

owes. This will be possible due to the design ofthe Greene Turbine; it wasinvented

with cost effectivenessin mind. Our firm can also reap benefits from speeding up the learning

curve of employees and improving process and job designs (Krajewski, 2010).

The capacity cushion forthe turbinesis minimal, amounting to 5%, with it being highly capital-

intensive. Our less capital-intensive energy service experiences a 30% cushion. Our current

demand isto produce 4 turbinesin a year.

emand is expected to increase to 6 turbinesin a yearoverthe next five years. Ifthe desired capacity cushion is 5%, we will plan for enough capacity

to serve 6 customersin five years [6/(/ (1-0.05)

6].


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We will adopt the conservative wait-and see strategy. This strategy follows demand andexpansion is planned in smallerincrements, such as by renovating existing facilities ratherthan

building new ones. In addition, expansion will be carefully planned with leasing land from the

government in order to place the turbines. The wait-and-see strategy reduces the risk of

overexpansion based on overly optimistic demand forecasts, obsolete technology, or inaccurate

assumptions (Krajewski, 2010).

Conclusion

References

www.redorbit.com/news/display/?id 1321709


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www.mvm.usace.army.mil

http://whitepapers.technologyevaluation.com/vendor/96/ifs.html

www.worldsteel.org/?action programs&id 53

www.arcelormittal .com/index.php?lang=en&page=8

www.arcelormittal.com/environment/us/cleveland

Krajewski,

ee J., Operations management /

ee J. Krajewski,

arry

.

itzman, Manoj K.Malhotra.9 ed. p. cm. ISBN-13:978-0-13-606576-0

The Coastal Business JournalSpring 2009: Volume 8, Number 1

http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine

Greene, Jeffrey. Interview atGreene Turbine offices 12/1/2010.

http://www.hgenergy.com/benefits.html

http://www.coastal.edu/business/cbj/pdfs/articles/spring2009/ho_shalishali_tseng_ang.pdf

http://greeneturbine.com/index.html

http://www.businessweek.com/ap/financialnews/

9I73F3O0.htm

http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine/

http://findarticles.com/p/articles/mi_qa3796/is_199901/ai_n8837740/pg_3/

Field Code Changed

Comment [A21]: Is this the full citation?Full citation isin the list(http://www.coastal.edu/business/cbj/pdfs/articlering2009/ho_shalishali_tseng_ang.pdf)

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