A drone-equipped UPS van
“Both the drone industry and federal regulators are years away from actual legal drone deliveries in the U.S.,” writes USA Today (Feb. 21, 2017). But that’s not stopping UPS from testing possibilities, both to get the visual of a drone with their logo out in front of the public and to see what works. The firm this week ran a test of a truck-launched drone delivery system for rural areas in Lithia, Fla. The drone-equipped vans would only be used on rural routes, says UPS.
Imagine a triangular delivery route where the stops are miles apart by road. The van-top drone would allow a UPS driver to make one delivery at the lower-left of the triangle, after launching a drone that would autonomously fly and deliver to the top of the triangle. While the drone is making its delivery, the driver would continue to the next stop, make another delivery by hand, and the drone would then rendezvous and recharge on top of the UPS truck.
UPS’ aim isn’t to replace drivers but to make them more efficient by allowing one driver to more quickly and efficiently deliver to several homes near one and other. The drone is fully autonomous. It doesn’t require a pilot. So the delivery driver is free to make other deliveries while the drone is away.
UPS estimates that reducing the distance its truck drive by just one mile per driver per day over one year could save the company up to $50 million. Rural delivery routes are the most expensive to serve, due to the time and vehicle expenses required to complete each delivery.
Here is a very short video your class will enjoy!
A control room operator helping manage all of Pioneer Natural Resources’ drilling sites
We blogged a few weeks ago about changes in the oil drilling industry and how automation is creating a new demand for high-tech workers. It is in the news again. “Despite 163,000 lost oil jobs since 2014, U.S. oil production is galloping upward, to 9 million barrels a day from 8.6 million a few months ago,” reports The New York Times (Feb, 20, 2017).
Nationwide, with only 1/3 as many rigs operating as in 2014, production is down less than 10% from record levels. Wells that 3 years ago required a breakeven oil price of $60 a barrel now need $35, well below the current price of $53.
Much of the technology has been developed by the aviation and automotive industries. Now most oil firms have organized teams of technicians that collect well and tank data to develop complex algorithms enabling them to duplicate the design for the most productive wells and to repair parts before they break down. The result is improved production and safety, but also a far smaller–more brain-oriented– work force.
Texas’ Pioneer Natural Resources has slashed the number of days to drill and complete wells so drastically that it has been able to cut costs by 25% in wells completed since 2015. The typical rig that drilled 8-12 wells a year just a few years ago now drills 16. Last year, the company added 240 Texas wells without adding new employees.
With the loss of manual jobs has come a transformation in the job force, with demand growing for more data analysts, math scientists, communications specialists and robotic design engineers. In the last 2 year, Switzerland’s ABB has opened two plants in Houston for assembling robotics into oil field operations.
Classroom discussion questions:
- What are the implications of increased productivity in this industry?
2. How is OM changing the drilling industry?
Today’s Guest Post comes from Dr. Dan Bumblauskas, who is an assistant professor and the Hamilton/ESP International Fellow for Supply Chain and Logistics Management at the University of Northern Iowa. Dan is also VP at PFC Services, a consulting firm dedicated to helping businesses improve process efficiency.
If you’re reading this blog I am sure that you, like me, have experimented with and deployed a variety of teaching techniques in OM courses over the years. Today I’d like to share one such initiative I embarked upon a number of years ago: the development of a problem-based learning module for statistical process control (PBL-SPC). Along with faculty and graduate students from both the colleges of business and education, I developed a web-based simulation in which students immerse themselves in a Frito-Lay factory environment based on Jay, Barry, and Chuck’s cases provided in their textbook.
The motivation for the PBL-SPC was that I found this to be a challenging topic to cover which students often find difficult to relate to and/or boring. Three different poor quality scenarios are provided (crushed chips, stale chips, and poor tasting or nasty chips) and students, as individuals or in teams, must traverse the simulated environment to assess the situation. By “speaking” with the fictitious characters created in the simulation the students get varying perspectives from the manufacturing supervisors for each area of the plant. In addition, some stations have data sets that can be downloaded as MS Excel spreadsheets to be further analyzed using SPC techniques.
Here is the link to the PBL-SPC: http://business.uni.edu/bumblauskas/ where you can access various menu options by hovering over the “Home,” button or clicking on 1 of the 3 scenarios. Under the “Home,” button, you will find the mission statement, production line schematic, staff profiles, an operational overview and a production video produced by Jay and Barry (Pearson) a few years ago.
For more information and materials, such as the team-based rubric created in conjunction with the PBL website, contact me at firstname.lastname@example.org or 319-273-6793.
“A new Trump administration has industry players who import almost all their sneakers from low-cost locales in Asia talking about their efforts to switch more production to the U.S.,” writes Businessweek (Feb. 6-12, 2017). They already know that manufacturing closer to home would lower the time it takes to get products to market. Now, sneaker makers’ efforts to manufacture here could also help deflect attention from the fact that they overwhelmingly are in the business of designing and marketing made-in-Asia footwear for American consumers.
Nike’s products are made by 1.1 million workers in 645 factories located across 42 countries. About 400,000 of the workers are in Vietnam, with 202,000 in China. Only 7,000 are in the U.S. Footwear companies are hoping for incentives for manufacturing onshore to speed up their made-in-America ambitions. But as they look to bring production back to the U.S., shoemakers are embracing a new kind of worker: robots. Sneakers, with lots of pieces stitched or glued together, are labor-intensive. That’s one reason so many plants are located in low-wage nations. So automating is key for any shift.
Still, getting U.S. production to account for more than a tiny fraction of their global totals will be tough. Nike employs 1,300 at factories in Oregon and Missouri, and says it plans to invest in advanced manufacturing to bring production to the U.S. Even if many shoe factories were to get built in the U.S., most of the jobs they’d bring would likely go to industrial robots or 3D printers, not people. Adidas, for example, says its upcoming “speed factory” in the Atlanta area will initially employ only about 160 people. And Under Armour uses just a dozen workers to make its 3D-printed shoes in New Hampshire.
Classroom discussion questions:
- Why does the U.S. want shoe jobs back?
- Will Nike ever leave its plants in China and Vietnam?
“New chip plants are tremendously expensive,” writes The New York Times (Feb. 9, 2017), “requiring large tracts of land, reliable electricity and water, and a skilled work force that includes people with doctorates in chemistry and technicians who can repair a malfunctioning robot.” Sophisticated equipment is necessary to deposit and etch microscopic layers of material on silicon wafers, which are then cut and packaged into the microprocessors that run PCs, servers, smartphones and, increasingly, other electronic devices.
Countries compete to land such plants, especially modern factories that produce the most valuable chips and bring high-paying R&D jobs. Government subsidies are common, with China vowing to spend tens of billions of dollars to expand its domestic chip industry. While most technology manufacturing, such as computers and smartphones, has moved overseas, American factories still account for 1/7 of global chip production and produce many of the most valuable computer chips, including Intel’s flagship processors. Seventy-six chip plants are scattered across the U.S., from Maine to California.
Intel’s new $7 billion, 3,000 employee, chip plant in Arizona plant will build ultradense chips that Intel refers to as 7 nanometer, with transistors packed more closely together than in the chips the company now builds. The tighter spacing allows for faster, more energy-efficient chips. “This factory will produce the most powerful computer chips on the planet,” says Intel’s CEO, who adds: “the company had decided to proceed because of the tax and regulatory policies we see the (Trump) administration pushing forward.” Intel also has factories in China, Ireland and Israel.
Classroom discussion questions:
- Why are chip factories important to the U.S?
- Why is chip manufacturing a tough business to enter and succeed in?