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Drone Technology and Regulation

April 28, 2015

Recently the House of Lords EU Committee called for a mandatory registered database of drone owners. This registry started with professionals and businesses and later plans to extend to all consumers. Such a database would enable the public to access information about drone flights. But do regulations relating to the use of drones extend far enough? Do they extend too far?
Current laws regarding drones are broad and adaptable enough to deal with issues that arise in an unexamined and changing environment of innovation. The main issues that have thus far been combatted by drone regulation include recording private activities, unlawful collection of personal data without consent, and illegal surveillance activity. Further laws regarding nuisance, trespass, copyright, and injury are also being expanded and extended to drones.
Remaining concerns that have thus far been widely unaddressed include the actual tracking and police of drone movements, as well as risk management laws regarding the location of drone flights relative to the specific kit being used. With such a wide variety of drones with different levels of functionality, a spectrum of regulation relative to the model of drone needs to be developed. Although the registry will in theory help to regulate the movement of these drones—such an optimistic assumption hinges upon the belief that drone users will stay within the limitations set by the registry. Yet if compliance to existing drone laws can be used for a base of assumptive precedence, full compliance to the registry is highly unlikely.
While the future of drones remains unclear, the English legal system has been quite adaptable and has amended regulations through case law and testifying[1]. Adaptability is an essential facet of legal regulation at this state in a technologies development and will help to foster innovative development and use of drones within a consumer and business setting. Such freedom to innovate is said to create up to 150,000 jobs related to drone technology across Europe by 2050[2]. Yet this development will be inextricably connected to the balance between business innovation and efficiency with freedom of speech and privacy.


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Inventory Optimization: Right Inventory Questions

April 21, 2015

Inventory optimization has been a key area of focus and challenge for companies developing their supply chain. Several obstacles present themselves in this process; working in functional silos, demand volatility, supplier volatility, and difficulty accurately forecasting and planning to compensate for such factors. As a result there has been a substantial trend to adopt new strategies of inventory reduction and minimization which often detract from the real issue that hinges upon meeting customer service levels. Customer service levels are just as important, if not more important, than cutting inventory costs and yet often suffer unnecessarily under a paradigm fixated on reducing costs.
In order to address this issue there are several ‘Right Inventory Questions’ that have been highlighted by Vikram Srinivasan on Talking Logistics[1]. These include:

1. What are the buying behaviors of my customers?
2. Do I have the right distribution network (for example, centralized stocking strategies for my slow movers)?
3. Do I have the right ordering frequencies and lot sizes?
4. Where, in what form, and how much to stock?
5. What are my target service levels?
6. How do I handle seasonal demand/promotions?
7. How much am I currently expediting due to poor service levels?
8. What are my lost sales?
9. How can I reduce supplier lead times?[2]

These questions, along with many others can help companies find the constraints in their supply chain and help combat the tendency to adopt new inventory models in favor of finding the right tools for their specific business. Often when compiling the data and analytics to determine which systems and tools ought to be implemented, companies fail to capture true customer buying behavior by assuming normality, not understanding the driving factor behind trends, and making assumptions unnecessarily that lead to incorrect conclusions. Modeling technology that enables end-to-end views of inventory levels and policies can be utilized to design the right inventory strategy for weekly and monthly warehousing and ordering policies. Simulation of the recommended inventory policies from optimization analysis run by these modeling technologies can help validate operational feasibility and give greater visibility into supply chain performance/KPIs. When it comes to inventory optimization it’s important to avoid riding the trends of new systems and technologies and to ensure that each facet of the system is fine-tuned specifically to that segment of the inventory and the customer it is for. Digging deeper into each segment and asking direct questions, like those listed above, help identify which areas ought to be utilizing a different inventory optimization strategy.

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Evaluating Viability of Material Handling Automation

April 15, 2015

Most companies that maintain manual distribution operations consider automated material handling systems something they can’t afford to do. As a result most also view implementation of such a system as too large of an investment to be justified by their level of operations. Yet the reality, as articulately highlighted by Supply Chain 24/7[1], is that often by making this assumption companies are missing out on the fact that there is “compelling return on investment (ROI) from automation”[2].

Solutions such as automated storage or retrieval systems are used by many DC operators and when used wisely to target those aspects of an operation that will bring the greatest profits can bring about substantial profit. This traces back to the core concepts of bottlenecks and identifying key capacity constraints. Supply chain 24/7 identified four of the leading areas of payback as;
(1) Labor savings
(2) Space savings
(3) Throughput and flexibility gains
(4) Reduced maintenance and supervision[3]

As a company identifies its key constraints, savings can result in each of these four areas often returning generously on the initial ROI. With today’s level of technology and the increasing options and tools available to operation management, even companies that may view themselves as too small to utilize automated systems ought to evaluate the potential opportunities that exist to innovate and take advantage of the increasingly efficient and affordable automated technologies available.

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