Lessons to Glean From the West Coast Port Dispute

It is now possible for cybercriminals to take control of a vessel's GPS system

Limited options on the West Coast without new thinking?

It appears that ports on the US West Coast are back in full swing after a protracted labor dispute delayed cargo worth billions of dollars and caused untold reputational damage to the companies caught in the crossfire.

But the implications of this standoff between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association go beyond idle ships and stranded freight containers.

On the company side of the divide, the dispute underlines how short termism hobbles the ability of companies to deal with crisis situations. 

In 2002, a 10-day lockout on the West Coast cost the US economy an estimated $ 1 billion per day in the first week growing to $2 billion per day in the second week, and required a presidential intervention. Yet with a few notable exceptions, companies forgot or ignored the lessons learned some 13 years ago and were caught flat-footed by the re-run of the contract dispute in 2014/15.

Many enterprises argued that their options were limited given that West Coast ports dominate the container trades in the US. There is some truth to this claim at this time, however, too many companies failed to take precautionary measures and response strategies well ahead of the stoppages. It’s not as if the disruptions were unexpected.

The general lack of preparedness is testament to short-term thinking. Managers move on and take their experiences with them; companies are forced to march to Wall Street’s quarterly drumbeat.

There is a lack of far-sightedness on the labor side too, but here the problem has more to do with tunnel vision than short-term memory.

Today, global supply chains have to be incredibly agile to stay competitive, which means that companies have become adept at reconfiguring their supply and distribution networks in response to changing market conditions. The uncertainty and high costs caused by the labor unpredictability on the Pacific Coast will (admittedly slowly) cause companies to adapt in two major ways.

First, over the next several years, new shipping options will become available to US companies. These include a wider Panama Canal and possibly the construction of a Nicaragua Canal; Mexican port capacity expansions; port capacity expansions on the US East Coast that will reduce the costs of using the Suez Canal; and even the opening up of Arctic sea routes.

The second way in which shippers could adjust to problematic operations on the Pacific Coast is by moving production to the US (re-shoring) or Mexico and other Latin American countries. This strategy enables shippers to bypass the Pacific ports altogether. California farmers might also reduce their export volumes through ports on the West Coast in response to the loss of market share as competition around the world heats up.

To make matters worse, US ports have fallen behind technologically-advanced cargo handling hubs such as Singapore and Rotterdam in the Netherlands, mainly due to union opposition. And no industry has ever been able to win the struggle against technological development and corporate flexibility. The UAW, for example, is now a shadow of its former self owing to the trade union’s over-reaching tactics. The UAW’s actions were based on the belief that production assets are not moveable and thus employers have to succumb to their demands. The result was the creation of multiple manufacturing plants in the US South, dwindling union clout, and bankruptcies at General Motors and Chrysler.

The lesson for Pacific ports is that they can either modernize or continue to fall behind and suffer the same, predictable outcome.

But that vision seems to be lost on the ILWU.

The union clings to outmoded practices and negotiating tactics, while the rest of the industry moves on. To some extent this is a symptom of an aging leadership that is far more concerned with the needs of the current generation of dock workers than future generations.

Some argue that robots will not buy the goods and services that underpin the US economy and create jobs, and this point of view does have merit. As robotics and advanced information technology replace more and more workers, the percentage of the US workforce that is fully employed will continue to shrink. Add to this the fact that the US educational system is falling further behind other systems in the world, and one can see the need to re-think social policies and the distribution of wealth. Companies – shippers in this case – cannot be expected to remedy this situation. This is Government’s job; but that is a much bigger subject that could fill numerous blog posts.

Meanwhile, the longer the ILWU’s myopic view persists, the more isolated it will become. Ultimately, shippers will find other routes and cargo handling options for their goods, eroding the West Coast’s dominant position in the US.

Let’s hope that both sides use this latest episode in their long-running contractual disputes as an opportunity to take the longer view. For example, strong investments in port modernization will make cargo operations more efficient in the short term and could deter alternatives from developing over the long haul.

One thing is for sure, the next time these issues come to a head the world will be a different place.

 This post was originally published on the LinkedIn Influencer site.

 

How Trucking Rules in Brazil Are Driving Change

 

Brazilian truckers are adapting to new working hours regulations

Brazilian truckers are adapting to new regulations

Regulatory change is a two-way street for companies: it can be disruptive while forcing a review of accepted practices that sheds new light on operational efficiency. This is what happened to PepsiCo Brazil when the Brazilian government introduced new rules that limit truck driver working hours. A study triggered by the change indicated how the company can adapt to the new rules, and provided fresh insights into the pros and cons of using private fleet versus common carrier transportation options.

The study was carried out by Renato Starling, Transportation Productivity Manager at PepsiCo, for his 2015 capstone project while studying for a Graduate Certificate in Logistics & Supply Chain Management (GCLOG)*. The GCLOG project is titled Choice Between Private Fleet and Common Carrier and the adviser is Edelcio Koitiro Nisiyama.

Legislation that took effect in September 2013 imposes a number of restrictions on the working hours of truck drivers in Brazil. For example, they are not allowed to drive for more than 10 hours daily (eight regular hours plus two hours of overtime), must have a break of at least 30 minutes every four hours, and take a weekly rest of 36 hours.

The changes have had a dramatic impact on productivity and costs. At PepsiCo, the number of miles driven has fallen by 7% compared to the previous work regime, and costs have risen 20% due to higher wage payments (not allowing for inflation in 2014). PepsiCo’s labor costs now account for about 37% of total transportation costs compared to 32% before the legislation was implemented.

The company uses a private fleet of trucks in combination with third-party carriers to deliver its products in Brazil. As the new regulations came into force, the challenge was to determine how to comply with the rules while maintaining both the efficiency of the company’s freight network and the quality of its customer service.

“When I joined the company in May 2013 we had created a new discipline that focuses on the productivity and cost management of transportation,” says Starling.

The company initiated a major study of its freight network as part of this new approach to transportation management. A key objective was to develop a methodology for evaluating the cost of private fleet movements in each lane. By comparing these costs to those associated with common carriers, PepsiCo could identify the optimal mix of carriers in each lane.

In addition to analyzing the logistics of PepsiCo’s freight network, the study took a number of industry factors into account. For example, the common carrier sector in Brazil is dominated by self-employed drivers who do not have to follow the new rules. Also, some larger operators initially opted to flout the regulations.

The study found that driver costs at PepsiCo have risen some 40% since the rules were implemented. However, the company’s private fleet is still competitive for shorter hauls, largely because there are fewer opportunities to carry freight on the backhaul. The breakeven for length of haul is about 200 Km.

In light of findings like these, the company introduced some important changes. “We decided to sell seventeen of our older, less efficient trucks, and to do another, more detailed study, that will probably result in us selling more vehicles,” said Starling.

With the benefit of the data from the study, transportation managers are making more informed decisions about carrier usage in each lane. For instance, in an effort to minimize the number of empty miles and fully utilize its private fleet, the company is actively looking for opportunities to capture backhaul cargo. PepsiCo has three main businesses in the country, snack foods, dairy products, and coconut water, and has managed to increase the number of backhaul loads by about 30% by pooling truck space for these businesses.

Undoubtedly there will be further changes as more data becomes available and the regulations are adopted more widely. Some structural changes are already taking place in the trucking industry. “Big carriers are trying to establish partnerships with self-employed drivers, and some carriers are pushing drivers to buy their own trucks,” said Starling.

It will take some time before the new rules are fully integrated into freight networks in Brazil. Meanwhile, “no one knows what the full effects will be,” said Starling.

*The GCLOG program is offered by the Center for Latin-American Logistics Innovation.

For more information on GCLOG contact the program director Dr. Roberto Perez-Franco. Renato Starling can be contacted at renatostarling@gmail.com.

This article was originally published in the winter 2015 issue of the SCALE newsletter Frontiers. Subscribe to Frontiers for free here.

Photo: Wikimedia

A Digital Dispatcher for Trucks

 

Technology that is helping underwater vehicles to navigate the ocean floor is being used in the development of an in-cab information system for trucks

Technology that is helping underwater vehicles to navigate the ocean floor is being used in the development of an in-cab information system for trucks

There many sources of uncertainty in truck transportation such as inclement weather, traffic congestion, and loading dock delays. Researchers at MIT are developing an automated travel advisor that could ultimately function as a sort of robot dispatcher that helps truck drivers avoid disruptions and choose the optimum routes to their destinations.

The research is being carried out at MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL), and already has several applications including hybrid car navigation and controlling autonomous underwater vehicles (AUVs).

Planning long trips in a plug-in electric car with a relatively limited range can cause anxiety if the driver is unsure where the vehicle can be refueled. The system helps drivers to minimize the risks by planning routes that allow for the availability of fueling stations as well as a range of other risk factors.

“The algorithm will show you the acceleration profile of the car so you can anticipate features such as hills, and adjust the route to meet your deadlines,” says Brian Williams, a professor of aeronautics and astronautics and leader of the Model-Based Embedded and Robotic Systems group at MIT.

The system has speech-recognition technology that enables it to establish a dialogue with the driver. It might ask what the person’s goals are for a trip, and automatically plot the most time- and fuel- efficient route based on the latest traffic information and digital maps. Unexpected changes are also taken into account. For example, if the driver wants to travel to a restaurant and the place has closed, the advisor can be programed to suggest other options.

In the AUV application the algorithm is being used to manage various risks. “Uncertainty is a key issue when these robot vehicle are deployed,” says Peng Yu, a graduate student at CSAIL who is also co-developing the system.

When an AUV is mapping the ocean floor the vehicle can be thrown off track by currents or the underwater terrain, making it difficult to forecast how long it will take to meet the mission’s goals. The algorithm enables operators to respond to these uncertainties by altering the mission plans.

Dealing with uncertainty defines much of the truck driver’s job, so it’s easy to envisage likely applications in the commercial trucking domain. The team is now working on using the algorithm to improve the management of freight transportation.

Yu says that one aim is to help dispatchers figure out the trade-off between demand and the supply of truck capacity for each customer, and to rebuild delivery schedules in response to potential disruptions.

“It’s a decision support tool that not only generates an operational plan, it also does the trade-offs in real time and provides routing solutions,” says Yu. The tool might also indicate that the carrier or shipper needs more capacity or can’t currently meet a delivery window based on current conditions.

The tool could also function as a trip advisor in the truck cab that interacts with drivers in much the same way that it does in passenger car applications, adds Williams.

Support systems that help logistics managers to reroute trucks as conditions change are not new, but “we provide a different family of models” for managing risk in situations where are there many different types of constraints, says Williams.

In the supply chain space “these are well-studied logistics problems,’ acknowledges Yu. However, his initial research suggests that existing methods tend to be deterministic and assume a high level of control, whereas his algorithm is more attuned to situations where there is much uncertainty.

“The ultimate goal is an algorithm that acts like a dispatcher, where a manager has questions and it suggests alternatives” he says.

 

Photo: Wikimedia

 

 

6 Ways to Kill the Ideas That Spark Innovation

 

 

How can companies emulate Apple's talent for innovation?

How can companies emulate Apple’s talent for innovation?

Apple CEO Tim Cook recently described the demand for iPhones as “staggering” after divulging that the company sold 74.5 million units in the holiday quarter even though it raised the price of this iconic product. Total sales in the period amount to more than 34,000 phones per hour flying off the shelves around the clock reported the Wall Street Journal.[i]

Staggering indeed, and a powerful launch pad for the company’s next product, the Apple Watch, which it plans to ship this coming April (for more on the Apple Watch see my Influencer post How Will Apple’s Future-Facing Watch Change Your Business?).

How does a company such as Apple create incredibly successful innovations? And perhaps even more important, how can other companies emulate this success?

There are many reasons, of course, and lots of theories about how enterprises can develop an ear for exceptional product ideas.

An interesting one is that companies need to get better at exploiting the ideas that come out of unofficial projects, or skunk works. Peter Gloor, a research scientist at MIT’s Center for Collective Intelligence, has pioneered this concept. Gloor will explain more in a presentation at the MIT Center for Transportation & Logistics’ annual conference, Crossroads 2015, March 24, 2015, at the MIT campus, Cambridge Ma.

The vehicle used to bring these ideas to fruition is the Collaborative Innovation Network (COIN), says Gloor. It’s not a new concept; the famous American thought leader Benjamin Franklin used COINs to develop some of his innovations.

A COIN typically starts with a highly motivated, creative person, who is passionate about an idea. This evangelist recruits a group of like-minded allies – maybe three to 12 people – to carry the project forward. Once the initial, outlandish idea has been translated into a prototype, more like-minded souls are attracted to the project to form a collaborative learning network; the incubator for the COIN.

Networks like these are increasing in importance, maintains Gloor, and he foresees corporate structures becoming more cellular as employees come together via social media across companies and countries to develop their ideas.

Skunk work projects have produced some spectacular successes, the World Wide Web initially developed by a group of MIT visionaries is a notable example cited by Gloor. But by definition skunk works innovators toil away outside of official channels, and can find it very difficult to get the resources needed to ensure that their ideas see the light of day.

As someone who has created five companies and worked with many firms over the years, I have seen many worthwhile ideas wither on the vine. When originality threatens the status quo or runs counter to an organization’s culture, the individual behind the idea can struggle to gain traction.

Here are six road blocks to innovation that I’ve witnessed over the years.

Corporate (tunnel) vision. Is Nike a sport equipment or a lifestyle company? How about Zappos, is that enterprise a shoe e-tailer or primarily a purveyor of convenience? I would argue the latter in both cases. Nike sells lifestyle choices, while Zappos’ multiple product choice and free return service excel at providing a convenient buying experience. When employees in these companies think about new products and processes, they are not limited to the existing business model of selling sportswear or shoes, making it easier to think beyond the confines of traditional business categories. In contrast, companies that require employees to adhere to a narrow definition of the business model stifle the free thinking that catalyzes innovation.

Dense bureaucracy. Here, the impediment to innovation is a heavy-handed bureaucracy designed to ensure that the company adheres to certain processes and controls cost. This bureaucracy morphs into a system that supports the status quo and resists fresh thinking. The problem is often manifested in the “this is not how we do things around here” syndrome. Even companies that appear to be agile owing to their market dominance can still be lumbering giants when it comes to innovation.

Lack of leadership. Leaders set the tone of an organization, and if top managers are not comfortable with a cutting edge, less familiar working environment then the whole firm is likely to follow suit. These executives worry more about mundane details such as travel expense reports than corporate strategy. They also worry about their jobs, knowing full well that unlike competent managers and executives, no new and exciting jobs await them outside the current organization. Years ago management guru Tom Peters termed the stage that these executives reach as their “incompetence level.” These leaders ensure that there are no good successors waiting in the wings, because high-performing underlings are seen as threats. This is particularly important in young companies that need different leadership skills as the organization evolves beyond the start-up phase.

Lack of incentive. A company can talk up the importance of innovation, but if employees do not have appropriate incentives and rewards built into compensation systems, then the outcome is likely to be earnest words and little action. For example, procurement managers are in close contact with suppliers that, in many cases, bring innovative ideas forward in order to distinguish themselves in the market place (and can be major participants in COINs). Yet these procurement specialists typically focus on quality, capacity, and low cost; innovation tends to be low in their list of priorities.

The “not invented here” syndrome. Some companies find outside ideas almost repugnant. A supplier comes to them with an innovative idea for a new product or process, say, and the organization sets out to discredit the proposal. Often managers worry that their bosses will think less of them because they did no come up with the idea. In other cases this is not intentional. Bringing a supplier’s idea into a company requires a deeper and wider interaction with the vendor company, involving engineering, marketing, legal and other functions. Few companies interact with their suppliers on such a broad level.

Compulsion to clone. This problem becomes apparent during mergers and acquisitions. A buyer might acquire a smaller company because it values the target organization’s spirit and agility. Unfortunately, as the first order of business the buyer instills their own stifling organization on the acquired company, “because we need to have standards around here…” The smaller enterprise jettisons its identity – including those features that spawned the innovations that made the deal attractive in the first place – and becomes a clone of its parent. In effect, the imposed culture quickly extinguishes the spark of innovation in the target company.

There are many more obstacles on the road to innovative products and services. I would welcome your experiences of other idea-busting practices.

[i] ‘Staggering’ iPhone Demand Helps Lift Apple’s Quarterly Profits by 38%, Daisuke Wakabayashi, Wall Street Journal, January 28, 2015

This article was originally published as a LinkedIn Influencer blog post

More information on the Crossroads 2015 conference and registration form is available at: http://ctl.mit.edu/events/crossroads_2015

What SCx is Teaching the Teachers About MOOCs

classroom lecture to SCALE students during SCALE Connect 2014.

Will MOOCs complement traditional classrooms?

MOOCs (Massive Open Online Course) have been heralded as a major step forward in professional education, but how does this new generation of online programs perform in the real world?

The MIT Center for Transportation & Logistics (MIT CTL) launched MIT’s first supply chain MOOC, CTL.SC1x, on September 29th 2014. The initial course yielded some important lessons about the design and future role of MOOCs.

Dr. Chris Caplice, Executive Director of MIT CTL, who conceived and designed CTL.SC1x, will give a talk about the lessons learned at MIT CTL’s Crossroads 2015 conference, March 24, 2015, at the MIT campus, Cambridge, MA.

CTL.SC1x is the first of three courses that CTL is developing as part of an MIT XSeries in Supply Chain Management. Each of the three courses in the Supply Chain XSeries will feature videos, interactive problem solving, and online forums. The courses are intended, but not required, to be taken in sequence, as follows.

  • CTL.SC1x – Supply Chain Logistics and Fundamentals. This first course is a survey of the fundamental analytics tools, approaches, and techniques used in the design and operation of logistics systems and integrated supply chains.
  • CTL.SC2x – Supply Chain Design. The second course builds off of the concepts taught in SC1x and applies them to supply chain design. There is a greater focus on more complex and in-depth problems.
  • CTL.SC3x – Supply Chain Strategy. The final course in the series extends the supply chain concepts previously covered and demonstrates how they impact and influence business strategy.

The first course, completed in late December 2014, vindicated a key claim about the MOOC model: that it’s coverage in terms of geographic reach and numbers of students surpasses conventional classroom-based programs by a huge margin. Almost 30,000 individuals in 186 countries signed up for the 10-week program.

The largest share of students came from the US (21%), India (13%), and Brazil (4%), followed by the United Kingdom, Spain, Canada, Mexico, and Germany. The median age of the students was 30, with about half of the total population falling in the 26 to 40 age group.

“The age profile of the program was skewed towards young, mostly mid-career professionals, which is interesting because that mimics the profile of our Master of Engineering in logistics program here at MIT CTL,” says Dr. Chris Caplice, Executive Director of MIT CTL and course instructor.

A feature of the program that exceeded expectations was the success of the video content. “This was listed by many students as the best feature. Videos work well because individuals can use them at their own pace,” says Caplice.

Speed of response also distinguished SCx from traditional classroom instruction. Instead of having to wait for assignments to be graded and returned, students received almost immediate feedback on their work.

There were also some important lessons for the next version of the program.

“We underestimated the amount of time, energy, and effort it takes to engage in discussions with almost 30,000 people,” says Caplice. Students want an informal teaching environment that makes them feel special, and that requires an online chat facility that is highly responsive. “The good news is we can fix that with more staff,” he says.

In the future Caplice and his team will provide more reference material for students. Generally there are two types of textbooks: easy-to-learn-from books designed to introduce students to a subject rapidly with a lot of support, and less accessible and more concise works of reference that are kept on a shelf and consulted when needed after learning the concepts. The SCx course videos met the former need, but there was unmet demand for reference collateral.

Perhaps the most important lesson in relation to the future of MOOCs, is what this inaugural program teaches us about how online classes fit into professional education generally.

Caplice believes that this breed of program complements, rather than replaces, the familiar residential model. “One of the components that the MOOC does not deliver is really effective classroom interaction and discussion. For example, physical classroom case discussions follow the Socratic method of teaching, but this method does not work well in a MOOC,” he says.

No doubt MOOCs will continue to be refined with each iteration of the model, and perhaps future versions will be more competitive with traditional programs. Caplice and his team are looking forward to learning more as the full SCx program rolls out, and they begin work on the next one.

For more information on the CTL.SC X-Series contact Dr. Chris Caplice.

Register for Crossroads 2015 here, or contact Nancy Martin at NLMartin@mit.edu if you have questions about registration.

The Power of Skunk Works to Ignite Innovation

Informal collaboration within and across companies can be a source of disruptive innovation

Informal collaboration within and across companies can be a source of disruptive innovation

Are you on a mission to turn an idea into reality, and have recruited collaborators within the company to work on the unofficial project? If so, you’re part of an age-old phenomenon that Peter Gloor, a research scientist at MIT’s Center for Collective Intelligence, calls Collaborative Innovation Networks (COINs).

Gloor believes that COINs are becoming increasingly important as an engine of innovation for large organizations that must keep pace with fast-moving markets

He will explore the evolution of COINs and future applications of these networks at the Crossroads 2015 conference, March 24th, at the Massachusetts Institute of Technology campus.

COINs, often called skunk works, have been around for a long time. Benjamin Franklin used the concept to develop a number of his innovations, and in his autobiography described ground rules for establishing such a network that are still relevant today.

A more recent representation, and Gloor’s favorite example of a COIN, is the group of forward-thinkers at MIT who formed a consortium in the 1990s to create the World Wide Web. Gloor had just joined MIT, and his subsequent research into the Web and intranet communications led to the birth of the COIN concept.

Today, the internet and social media, combined with an insatiable appetite for new products, is driving another phase in the development of COINs.

The basic process for setting up a COIN typically starts with a highly motivated, creative person, who has an idea he or she wants to bring to fruition. This evangelist recruits a group of like-minded allies – maybe three to 12 people – to carry the project forward. Once the initial, outlandish idea has been translated into a prototype, more collaborators are attracted to the project to form a collaborative learning network; the incubator for the COIN.

Importantly from a supply chain perspective, the original idea can be an innovative process, and the COIN might span more than one organization to include, say, enthusiasts from a manufacturer and a core supplier. For example in 2004/5 people from Ford and a core supplier formed COINs to design parts for the new Ford Focus. The initiative also led to fundamental changes in the supply chain for the parts.

Another key feature of these networks is that they have a rotating leadership. As Gloor explains, once established a COIN needs different types of leadership as it evolves. At first the leader is a missionary who drives the group’s work. As the project matures, it requires more sales skills at the top. Also, leaders motivate and nurture the efforts of the participants, but have relatively little power over the group.

Gloor has developed an app called Condor that analyzes social networks and spots current or emerging COINs. Variables that identify a COIN are built into the software. Leadership and contribution – the number of times communications are sent versus received – are two examples. Speed of response is another; according to Gloor a person’s eagerness to respond to a message is a measure of his or her interest in the sender. Emotionality is an important variable, because the level of passion exhibited by participants correlates with the success of the project.

It’s becoming more important for companies to be able to identify and foster COINs, Gloor believes. Product life cycles are getting shorter, and COINs are a primary source of disruptive innovation as well as a means for companies to become more agile and responsive to shifting market demands. He foresees corporate structures becoming more cellular as larger numbers of employees come together via social media across companies and countries to develop their ideas.

“Today, large organizations need what the army calls “power to the edge”, to delegate responsibility (for innovation), and that means encouraging people who are self-motivators,” says Gloor.

 More information on Crossroads 2015, including registration form, is available here. If you have a question about registering for the event contact Nancy Martin at NLMartin@mit.edu.

Is the US Grounded in the Race to Develop Drone Delivery?

Amazon’s widely publicized program to develop a drone delivery service might give the impression that the online giant is spurring the technology’s advance in the US.

The reality is very different, says Dr. Mary (Missy) Cummings, Associate Professor, Mechanical Engineering & Materials Science, Duke University. Dr. Cummings will give a talk on the commercial potential of drones at MIT CTL’s Annual Partner Meeting, March 25th, 2015, on the MIT campus.

For a number of reasons other countries are leading this particular race. By comparison, the US has barely moved out of the blocks as regards practical commercial applications of the technology, believes Cummings.

“We tend to get myopic in this country about what’s going on in the rest of the world,” she says, and drone technology offers a good example.

The US Federal Aviation Authority (FAA) is “moving towards more commercial applications, but these are small steps and are not scalable.”  Some companies in the US have been granted permission to operate unmanned aerial vehicles in limited circumstances. New regulations are in the works, but are not expected to emerge until 2017, says Cummings.

Meanwhile, other countries are actively supporting the growth of commercial drones. Australia is one of the leaders, and it is notable that Amazon has carried out much of its initial development work in the United Kingdom. France is using drones in its national postal system, points out Cummings. Canada has a more drone-friendly regulatory framework than its neighbor to the south.

She believes that the FAA is so heavily committed to piloted aircraft that drone technology “is not on their radar.” Companies that want to test aerial drones in the United States have to provide proprietary data if they use designated test sites, and this can be a deterrent.

In addition, these vehicles are generally perceived as a threat to privacy, and are vulnerable to vandalism. The high-profile use of drones by the military has reinforced worries about the security dangers posed by aerial vehicles if they fall into the wrong hands. “But if we can’t employ them on a larger scale it is hard to get positive media around drones and to change perceptions,” Cummings says.

There are some technology problems to overcome, but these are solvable, she maintains. Researchers at the Massachusetts Institute of Technology are exploring ways to make the vehicles more robust in severe weather conditions, for example. At Duke, Cummings is researching a multi-layered approach to air traffic control that could be used to manage the movement of drones. “Rather than one person controlling a dozen planes or a single lane, a person could oversee hundreds of drones and intervene when there are problems,” she explains.

In a supply chain context, drones could be used to deliver packages over the last mile, an application that Amazon is developing. But vehicles can be designed to carry heavier payloads, and this is already being done in Afghanistan. “It’s simply a case of developing the business model,” says Cummings.

The MIT CTL partner day on March 25, 2015, follows MIT CTL’s annual conference Crossroads 2015 which takes place on March 24. Exchange partners can make the most of their time at MIT by attending both events. For more information contact Nancy Martin at: NLMartin@mit.edu

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