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8 Ways Machine Learning Is Improving Companies’ Work Processes

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Today’s leading organizations are using machine learning-based tools to automate decision processes, and they’re starting to experiment with more-advanced uses of artificial intelligence (AI) for digital transformation. Corporate investment in artificial intelligence is predicted to triple in 2017, becoming a $100 billion market by 2025. Last year alone saw $5 billion in machine learning venture investment. In a recent survey, 30% of respondents predicted that AI will be the biggest disruptor to their industry in the next five years. This will no doubt have profound effects on the workplace.

Machine learning enables a company to reimagine end-to-end business processes with digital intelligence – and the potential is enormous. That’s why software vendors are investing heavily in adding AI to their existing applications and in creating net-new solutions.

But, at the same time, there are barriers to overcome. The most important is the availability of large quantities of high-quality data that can be used to train algorithms. In many organizations, the data isn’t in one place or in a usable format, or it contains biases that will lead to bad decisions.

Prepare for your business’s future by taking a look at some concrete examples of how AI and machine learning are creating value in companies today and which considerations should be addressed to fully realize them.

Read the full article in Harvard Business Review.


21 Facts On Supply Networks In The Digital Economy

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Part 6 of the six-part blog series “Facts on the Future of Business

Innovation in the business world is accelerating exponentially, with new disruptive technologies and trends emerging that are fundamentally changing how businesses and the global economy operate. To adapt, thrive, and innovate, we all need to be aware of these evolutionary technologies and trends and understand the opportunities or threats they might present to our organizations, our careers, and society on a whole.

With this in mind, I recently had the opportunity to compile 99 Facts on the Future of Business in the Digital Economy. This presentation includes facts, predictions, and research findings on some of the most impactful technologies and trends that are driving the future of business in the Digital Economy.

To help you more easily find facts for specific topics, I have grouped the facts into six subsets. Below is the sixth of these:

 

New value opportunities

Digital supply chains can reduce supply chain process costs by 50%, reduce procurement costs by 20%, and increase revenue by 10%.

Source: “Digital Supply Chains: A Frontside Flip,” The Center for Global Enterprise.

Companies with 50% or more of their revenues from digital ecosystems achieve 32% higher revenue growth and 27% higher profit margins.

Source: “Thriving in an Increasingly Digital Ecosystem,” MIT Sloan Management Review.

During their operation, the NASA space shuttles cost $60,000 per kilogram to get their payload into low Earth orbit.

Source: “Back to the Moon – Getting There Faster for Less,” National Space Society.

The SpaceX Falcon Heavy will cost an estimated $447 per kilogram to get its payload into low Earth orbit.

Source: “Increasing the Profit Ratio,” The Space Review.

 

Platforms

82% of executives believe platforms will be the glue that brings organizations together in the digital economy. The top 15 public platforms already have a market capitalization of $2.6 trillion.

Source: “Accenture Technology Vision 2016,” Accenture.

By 2020, over 80% of the G500 will be digital services suppliers through Industry Collaborative Cloud (ICC) platforms.

Source: “IDC FutureScape: Worldwide IT Industry 2017 Predictions,” IDC Research Inc.

The world’s biggest banks have taken the first steps to moving onto blockchains, the technology introduced to the world by the virtual currency bitcoin.

Source: “Wall Street Clearinghouse to Adopt Bitcoin Technology,” The New York Times.

By 2027, blockchains could store as much as 10% of global GDP.

Source: “Making The Next Moves With Blockchain,” D!gitalist Magazine.

Africa is leapfrogging the developed world’s traditional banking systems through fast adoption of mobile and Internet-based technology, and is poised to take advantage of the disruptive opportunity that blockchains offer.

Source: “The Blockchain Opportunity, How Crypto-currencies and Tokens Could Scale Disruptive Solutions Across Africa,” BitHub.Africa.

Car sharing could reduce the number of cars needed by 90% in 2035, resulting in only 17% as many cars as there are today.

Source: “Self-Driving Cars Are a Disaster for the Car Industry, but Great for the Rest of Us,” Seeking Alpha.

Millennials are more than twice as willing to car-share as Generation Xers, and five times more likely than baby boomers.

Source: “Cars 2025,” Goldman Sachs.

Airbnb usage is projected to grow 1,165% by 2025, reaching one billion “room nights.” Key growth factors include Airbnb’s high levels of repeat customers, and significant word of mouth, as more than 80% of customers are likely to recommend Airbnb to friends.

Source: “One Wall Street Firm Expects Airbnb to Book a Billion Nights a Year Within a Decade,” Bloomberg.

Once fully available, 5G data speeds will be 1,000-times faster than today. This revolutionary leap will enable ubiquitous connections across the Internet of Things, engagement across virtual environments with only millisecond latency, and whole new Big Data applications and services.

Source: “2017 Predictions: Behind the Scenes with 5G – 2017 Lays Groundwork for Telecom Revolution,” Canadian Wireless Trade Show.

 

Automation and circumventing technologies

Self-driving trucks are hauling iron ore in Australia, convoying across Europe, and appearing on roadways across the globe. And because they offer business savings, self-driving trucks are expected to be more rapidly adopted than self-driving cars.

Source: “Self-Driving Trucks: What’s the Future for America’s 3.5 Million Truckers?” The Guardian.

Amazon uses 30,000 Kiva robots in its global warehouses, which reduces operating expenses by approximately 20%. Bringing robots to its distribution centers that have not yet implemented them, would save Amazon a further $2.5 billion.

Source: “How Amazon Triggered a Robot Arms Race,” Bloomberg Technology.

88% of U.S. consumers say free shipping makes them more likely to shop online, and 79% would select drones as a delivery option if it meant they could receive packages within an hour.

Source: “Reinventing Retail: What Businesses Need to Know for 2016 Whitepaper,” Walker Sands Communications.

Taxi drones will start flying passengers in Dubai in July 2017. Passengers will select destinations on a touch screen and will be able to travel up to 30 minutes at a top speed of around 100 kph.

Source: “Taxi Drones Set for July Launch of Passenger Service Over Dubai,” RT News.

Only 13% of U.S. and Canadian manufacturing jobs recently lost were lost due to international trade. 85% of the job losses stemmed from productivity growth — another way of saying machines replaced human workers.

Source: “Industrial Robots Will Replace Manufacturing Jobs — and That’s a Good Thing,” TechCrunch.

The European Union is proposing new laws that require robots to be equipped with emergency “kill switches” and to be programmed in accordance to Isaac Asimov’s “laws of robotics,” stipulating that robots must never harm a human.

Source: “Europe Calls for Mandatory ‘Kill Switches’ on Robots,” CNN.

By 2030, 25% of Dubai’s buildings will be 3D-printed.

Source: “25% of Dubai’s Buildings Will Be 3D Printed by 2030: Mohammed,” Emirates24|7.

Patients dying while waiting for an organ donor could soon be a thing of the past. By 2030, organs will be biologically 3D-printed on demand.

Source: “Healthcare in 2030: Goodbye Hospital, Hello Home-Spital,” World Economic Forum.

 

To view all of the 99 Facts on the Future of Business in the Digital Economy, check out the Slideshare or other subsets below.

 

To see the rest of the series, check out our page “Facts on the Future of Business” every Thursday, where we will cover these six topics:

  • The value imperative to embrace the digital economy
  • Technologies driving the digital economy
  • Customer experience and marketing in digital economy
  • The future of work in the digital economy
  • Purpose and sustainability in the digital economy
  • Supply networks in the digital economy

 

Digitalist Flash Briefing: The Evolving Opportunities, Issues, And Impact Of Drones

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Part 1: Drones, Harder Than They Look

We’ll start by demystifying some common misconceptions about drones and looking at their potential for business purposes.

 

Part 2: Can Drones Save Lives?

Building on the topic of drones, we will delve into the expansion of their applications for potential life-saving purposes.

 

Part 3: Drones, More Than A Toy: The Real-Time Business Potential

Take a look at how drones might help your business reach new heights. Early deployments suggest that drones have vast potential for real-time business.

 

Part 4: Drones And Privacy

Learn about the privacy issues that might affect your decisions on drones as a tech tool for your enterprise.

 

Part 5: Rush-Hour Traffic, No More? How Drones In Dubai Are Shaping the Future Of Travel

To wrap up this series, we’ll talk about taxi drones and how they might change how we travel.

 

Tune in Monday through Friday for more Digitalist Flash Briefings on disruptive technologies and trends on your favorite device or app.

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Find and listen to previous Flash Briefings on Digitalistmag.com.

The Future Of CRM: Customer Engagement And All Things Digital

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Most leading research firms and pundits agree that digital will first impact businesses in the places they interact with customers – across sales, service, and marketing, whether online or in the store. The biggest bang for the buck will come from new and existing customers who want to buy goods and services when, where, and how they want them.

Let’s look at how different technologies can change modern customer relationship management (CRM) and engagement in an enterprise:

1. Artificial intelligence

This technology has the potential to crunch and automate tasks for sales/service/marketing reps – for example, scanning through and analyzing all open accounts receivables and spitting them out in a nice, readable format so sales reps can negotiate better payment terms. In short, mundane tasks can be automated so reps can take intelligent actions on tasks that add the most value to sales.

2. The Internet of Things

As a company with a large installed base of expensive machines out in the field, IoT sensors constantly send data (e.g., parameters above or below threshold), which can help the company proactively service their machines, thus lowering maintenance costs after a failure and keeping customers happy through increased uptime and meeting/exceeding their service level agreements (SLAs).

3. Drones

On the service side, site inspections and remote reporting through audio, video, or other data relayed back to the company’s CRM applications can auto-trigger tickets when potential issues arise. This could be a big boost, especially for companies with remote equipment, such as offshore oil wells run by oil and gas companies.

4. Cloud

This seems to the mother of all digital technologies, because the “-as-a-service” architecture has accelerated every other technology in some way or the other, be it compute power or APIs enabling integration better and faster, or the ability to access key data anytime, anywhere.

5. Mobility

Mobility doesn’t only mean mobile devices; it also refers to an effortless way to access your data and information wherever you are through a mobile device or interconnected devices.

6. Blockchain

Although it is relatively new technology, one way blockchain could impact most companies is connecting customer data with sales, service, and marketing. Integrating the customer’s entire history of transactions, every touch-point between the customer and the company in marketing, sales, or service, could enable a true 360-degree customer view, which has been a perpetual challenge in the old world of CRM, before the digital explosion.

7. Social media

Social channels are enabling many Fortune 500 companies to gather customer sentiment about new products and quickly scale up or down production, increase or decrease sales and marketing activities, or pull the product from the marketplace. These are all easily trackable, recordable, and reportable in digitally enabled CRM applications.

These are just the beginning of this conversation; other digital technologies, like 3D printing, Big Data, and augmented reality/virtual reality, can also boost customer engagement when their data is tracked, recorded, and reported through CRM applications. Regardless of the technology generating the data, the digital wave has changed the role of managing customer relationships from a reactive to a proactive one.

The impact of digital on modern-day CRM and customer engagement can be summed up in three words: automation, acceleration, and innovation.

A digitally enabled enterprise engages with both current and prospective customers through digital CRM applications, not just where they are but also where they are going. It also moves an enterprise from non-value-adding tasks by automating them and helping it focus on actionable insights, which is key to increasing both top and bottom lines.

Digital CRM is enabling companies to monetize customer engagements, thereby increasing wallet share. It’s also changing the C-suite’s roles from “keeping the lights on” to “bringing the smiles on” through innovation and new business models.

All in all, digital has changed the rules of the game for both the customer and the enterprise with a new model of value-added engagement where both can win.

For more on using technology to engage your customers, access the free eBook 5 Steps to Your Customer’s Heart with Emotionally Aware Computing.

Drones: Is That Buzzing In Your Ear An Opportunity Or Just A Pest?

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Part 3 of the Co-Innovation Series.

Day-to-day adoption of drones for commercial purposes is increasing, and it’s leading to not-at-rest sensors going to work, sensing and sense-making the full spectrum of space between terra firma and outer space. The day may soon arrive where identified flying objects continuously pass you on your street, in the halls of your building, or on campus, dutifully and autonomously carrying out all sorts of assigned tasks. Or not. Sort of like when the first Blade Runner movie failed to reflect any notion of a mobile-enabled world in the year 2019. Instead they went for neon-light-handled umbrellas. A total miss? Sure. Yet prediction of future technology is never easy. There’s always the sequel.

While we may not yet be surrounded by swarms of drones buzzing about us in all directions (which of course does worry some), the technology is nonetheless sound enough and gaining real-world traction. The entire drone industry is now focused upon growth in commercial use, as the technology keeps advancing towards formation of artificial intelligence (AI)-enabled and completely autonomous drones. The U.S. Federal Aviation Administration (FAA) says it estimates the commercial drone fleet will grow from 42,000 at the end of 2016 to about 442,000 aircraft by 2021.The aviation safety agency has said there could be as many as 1.6 million commercial drones in use by 2021. A number of valid use cases for select industries like construction, mining, and insurance are emerging today.

In my last post, I spoke to why I believe co-innovation is a reasonable approach to efficiently taking advantage of data extracted from your business operations using not-at-rest sensors. Such an initiative can take real advantage of what a co-innovated solution can be designed to do. Early adoption of any new technology is driven in part by the relentless belief in the return on investment – in this case from collecting important data from drones and automation, which is largely still nascent. That means you will likely be trying a few things before hitting on what works for your business.

Discovery through others

We are quickly advancing our understanding that this is not about just identifying and capturing more data. As we explore use cases in construction, we’ve already discovered the need to empathize with industries that have little interest in receiving more data than it has time or expertise to process. Co-innovation gets you focused on the solution and applying design thinking principles, which helps you recognize what concerns customers most.

While we may talk a lot about forming end-to-end solutions inside Silicon Valley (all in a day’s work), we also recognize that deciding to extract value from drone technology can be a big step for any given industry. Being able to leverage co-innovation, especially in cases involving nascent technologies and services, offers a chance for all participants to share knowledge and learn hands-on together. It can even spawn more discoveries with respect to the solutions possible. It’s usually the case that as we learn more (about anything), we also wind up finding out how much we still don’t know.

Fly solo or collaborate?

With the use of drones – or any not-at-rest sensor, for that matter – there will always be more to learn and discover. Even before the dust fully settles around final FAA regulations governing drones in industry, it is time well spent to examine what key dimensions of using drones in your business matter most and how they integrate with your business operational model. It’s important to gain a sense of the desired future state through understanding a day in the life of an end user trying to apply insights derived from data collected using drones.

Some early drone adopters, like in mining and construction, have elected to manage their own drone operations. They put their own product operations teams in charge of flying drones out of existing facilities, then transfer the drone’s images, captured on microSD cards, to someone else who identifies the images most useful to the requester. This is a serious undertaking, requiring flight control training and becoming familiar with federal aviation and other local regulations, among other complex tasks. It’s not that it can’t be done and done well. But the question to ask, given your business priorities, is whether it makes sense for your company to fly its own drones to get the data and then act upon it – or is it better to seek another way to consume and benefit from this data source?

In my next blog, we’ll look at how some companies are working to answer these questions.

For more on co-innovation opportunities, see The Future Will Be Co-Created.

Drone Technology: What We’ve Learned In The Lab So Far

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Part 4 in the 4-part Co-Innovation Series.

Having reached Part 4 of this series, I’m looking at the source material and realize I could have written ten chapters, but I’m no Ken Burns. My goal is to share examples of active co-innovation projects – initiatives that might involve some of your largest suppliers and technology partners. I hope to provide a source of inspiration, and perhaps even spark an opportunity to help your own IT teams gain insights from machine data with like-minded collaborators.

I posed this question in closing Part 3, where I looked at the case for drones: Does it make sense for your business to collect data using drone technology? Does it make sense for your firm to own and manage its own drones? Is that so different from managing other assets outputting sensor data?

Consider that adoption of unproven technology (unproven as integrated into your business) needs to weigh many different factors, from the investment (time, money, effort, resources) to the timing (when to do what), to the potential deployment (where and how). Here, I’ll describe what challenges and opportunities we hear about as we pursue project work featuring the use of drones and drone data in our own lab.

The challenges inherent in going it alone

Companies making a go of it in-house should begin by expecting to encounter the unexpected – and that’s not always weather-related or due to electromechanical failure. For example, we’ve heard from colleagues at mines in Australia describing how local hawk populations attack drones at work. How do you solve a problem like that? Budget for a loss rate of drone assets each year? Fly extra drones for in flight security? Budget for the expense of more drones or drone parts?

Drones can execute a variety of sensor payloads. Options abound for companies that must monitor conditions of large material assets used in construction projects like sand and gravel. Consistent inspection of these materials for the purposes of insurance-claim management is a single example of an existing business process that can be enhanced in ways to help save money (avoid lost or denied claims) using a cost-effective, Web-delivered service comprised of drone-sourced data. Through our own investigation of developing IoT-based solutions that draw from drone-sourced data, the use cases in both construction and mining have both well-understood and emerging business needs like:

  • Asset inspection (roofs, bridges, land, materials, etc.)
  • Site mapping (GIS) for large landscapes often for data comparison over time
  • Surveys that require levels and volumes

You can have target applications in mind for using drone data that satisfy specific end-user or business-unit needs. Yet your approach will differ if you are looking to integrate those data feeds into an enterprise-based back end or with applications run only from the cloud. We find such use cases now being described from the field and not just the lab, which encourages adoption. The capacity to absorb new capability and sufficiently process, analyze, and then visualize this data to the benefit of the company is crucial. Collecting this data represents only a portion of a complete solution. Similarly, what data you collect to support specific actions, and how often you collect data are additional questions that surface.

Our observations suggest that a combination of automation and managed services, all delivered through the cloud, has resulted in firms having bought into the technology for maybe a single yearly audit. They are now more often adding missions and deriving additional value from it. There can be similar uptake among firms that run drone operations internally as they continue to master skills and optimize data collection and ingest process; yet measuring operational costs and efficiency will differ.

Avoiding risk through collaboration

IoT has clearly emerged as imperative to competitiveness. It is therefore becoming essential to accept the risks inherent to adoption of still-nascent technologies, like using commercial drones. Much of the underlying technology, be it flight automation or data streaming into the cloud, are now well-proven. Yet as you begin to understand how all this newly harnessed capability will integrate with your business processes, you might feel uncomfortable with your chances to succeed.

With the speed at which technology advances, gaining the knowledge required to apply these technologies to solve problems can become overwhelming to a single team of innovators. Yet to pursue complex problem-solving through collaboration with others who may be further along the path takes full advantage of prior learning, as well as sharing in the risks when we innovate – like trying to collect data without provoking birds of prey.

Strength in numbers

When the skills and resource constraints within your team present a challenge to successfully execute a digital transformation project, your approach likely includes collaborating with other business units and teams. Working with a larger community of stakeholders and subject matter experts across the organization is often a good way to approach important new initiatives. You can possibly extend your knowledge further. As you consider the larger physical systems and processes where you seek to draw useful information from connected assets and devices, consider the compute, storage, and network resources that your solution will tie into. Suppliers and providers of these systems are often also involved in project work with others from the ecosystems in which they engage. You may want to explore working with those vendors or other companies that can richly contribute to your own efforts, reduce or share risk, and achieve goals sooner.

The use of not-at-rest sensors is a thing for me. I like the topic, and I plan to return to it in future posts, drawing from ongoing project work done in our lab exploring software and services at the edge of the enterprise systems and the cloud.

For more from this series, click here.

Smart Wine Shelves And Connected Cows: The IoT Has Arrived

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Now that we’ve managed to connect nearly every person on the planet, the focus has shifted to connecting everyday objects. Accenture CTO Paul Daugherty once commented, “The Internet of Things promises to bring every object, consumer, and activity into the digital realm.”

From an egg tray in your fridge that tells you how many eggs you have left and how fresh they are to a Bluetooth toaster that sends you a notification when your toast is done, Paul was clearly onto something – and we’ve welcomed the IoT into our lives and into our homes. IDC predicts that the worldwide IoT will represent upwards of $1.3 trillion in 2020, supporting 30 billion connected endpoints. There are many consumer IoT use cases, some of which have proven incredibly useful, while others, such as the aforementioned, are borderline excessive.

Regardless, consumer industries are facing a revolution in the way they engage and interact with customers. For key industries such as retail and agribusiness, the IoT is enabling many new opportunities. These industries have a common goal and challenge: to create and offer engaging end-user experiences at scale. There are compelling scenarios for leveraging the IoT to support engagement with digitally savvy consumers that generate business value.

Sitting on the sideline is not an option – now is the time to implement IoT technologies. Here are a few examples to whet your IoT palette:

The Internet of wine

BASF, the leading chemicals firm, has created an IoT Smart Wine Shelf. When a customer takes a bottle of wine from the shelf, a light sensor transmits this information to the system, triggering details of the wine’s vintage and flavour to appear on a screen. From a business perspective, it’s not just the solution’s entertainment value that sparks interest, but also the data it generates. For instance, it’s possible to analyse which wines are frequently recommended but rarely removed from the shelf. Insights like this help the wine seller select or rearrange wine bottles more effectively.

The Internet of cattle

Drones and horseback riding might not necessarily seem the most likely partners, but there’s a fascinating story of two software developers who have combined their interests to create IoT solutions for agribusinesses worldwide. The “Quadcopter Cowboys,” Alexander and Oleg Bolgarin, came up with an idea that will help ranchers sleep better: Collar cattle with sensors, connect the herd to the cloud, and apply drones as “mobile base stations” to ferry cattle data to a central cloud-based platform.

The prototype developed by the Bolgarin brothers envisages a cattle collar with sensors for location (GPS), motion (accelerometer), and temperature. Sensor data can be combined to tell whether a bull or cow is sick, trapped, lost, or deceased. Accelerometers can distinguish up to nine different cattle diseases and temperature can indicate a dead bull, which left undetected, might spread disease to others, while an animal that is alive (temperature) but static (GPS) could be injured or trapped.

Furthermore, pictures delivered by a drone can deliver useful information about a herd, such as pasture grass quality or the number of newly born calves. All sensor and picture data is uploaded to the cloud for evaluation. Cattle farmers can then immediately analyse and evaluate the data to gain near-real-time status over their herds, develop action plans, and even make predictions that support upstream and downstream processes of the business.

From smart wine shelves to connected cows, the IoT has well and truly arrived, and it’s inspiring all manner of wacky but often very useful innovations. The key is for organisations to be prepared and put themselves in a position to take advantage of the technology on offer. Whether a scenario can be implemented today or is speculative, it’s crucial to have the technology and IT infrastructure in place.

To learn more on the impact IoT is having on consumer industries, read this white paper by IDC.

The Promise Of Drones And Machine Learning For Oil And Gas Industry

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Digital transformation is no longer a fuzzy buzzword in industry, rather it is now a well understood and a credible approach to achieving business value. With increasing maturation of transformative technologies, it’s becoming a lot easier for organizations to chart their approach and digital transformation journeys.

The oil and gas industry was slow to leverage transformative technologies like the Internet of Things, machine learning, blockchain, artificial intelligence, and virtual reality. However, progressive companies have started to experiment with these new technologies to drive incremental value for their organization. These early adopters are showing how digital transformation is driving cost reduction, improving reliability, and increasing safety of people across the industry value chain and, in the process, attracting more companies and investment in these technologies.

Key challenges

The oil and gas industry faces the unique challenge of ensuring the efficient and safe operation of assets that are distributed geographically or in areas that are not easily accessible. In these cases, technologies like drones and machine learning could become very relevant. Drone-based aerial surveys of inaccessible areas can provide rich insights into the condition of the assets. Well platforms or areas above and near underground pipelines are some of the places where drone based inspection can work wonders.

How drones and machine learning can help overcome challenges

A common and simple use of a drone is to inspect inaccessible areas that would typically require scaffolding, rope, or a physical setups. By taking pictures of assets, such as flares, refinery columns, offshore platforms, or large crude oil tanks, and using them for visual inspections, oil and gas companies can prioritize detailed inspection and maintenance activities.

However, drone inspection’s true potential can be unleashed if machine learning is used to analyze the large volume of images to identify patterns and/or map the images to look for abnormalities. In this regard, a deep-learning algorithm based on a convolutional neural network (CNN) can help. In machine learning, a CNN (or ConvNet) is a class of deep, feed-forward artificial neural networks used for analyzing visual imagery. Simply put, it’s learning based on imagery.

In an oil and gas installation, a CNN-based algorithm running on a geoservice-enabled machine learning platform can be used to create a digital representation of a remote platform, a crude oil tank farm, an over-ground layout for an underground pipeline, etc., by feeding standard images (a test data set) to train the algorithm to identify an asset on the ground. This enables a CNN algorithm to understand the details in imagery. Any new photograph captured with drone-based inspection can then be evaluated based on the CNN algorithm

For example, standard images of the surface over an underground pipeline can be fed into the algorithm to train it. Afterwards, every time a visual survey is done, the new images can be analyzed based on the learning in the CNN algorithm, and any abnormality that can’t be mapped with the existing data set can be highlighted in the analysis. Human intervention can target this exception for inspection, instead of reviewing the entire information.

Summary

Drone-based aerial imagery has the potential to significantly transform maintenance and inspection processes for oil and gas installations. A geoservice-enabled machine learning platform with a CNN-based algorithm can analyze the results from aerial inspection, and recommend human intervention only if there are mismatches between the new imagery and the imagery used for training the algorithm.

For more on how technology is transforming the supply chain, see Tick Tock: Start Preparing for Resource Disruption.


Digitalist Flash Briefing: The Promise Of Drones And Machine Learning For Oil And Gas Industry

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Today’s briefing looks at how a partnership between drones and machine learning algorithms is helping the oil and gas industry.

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Read more on today’s topic

Creators: Zipline Offers Drone Aid to Remote Health Clinics

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Keller Rinaudo, co-founder and CEO, Zipline
Image Credit: Flickr CC: TED Conference

Drones get a bad rap. Unmanned aerial vehicles (UAVs), first introduced decades ago, have a largely negative connotation in modern life—from the Predator drones used to conduct targeted killings to law enforcement drones engaging in potentially unwarranted surveillance to mishandled consumer drones menacing the public.

Credit: Zipline

Keller Rinaudo, co-founder and CEO of Zipline International, sees the technology instead as a lifesaving mode of transport. In 2016, the Half Moon Bay, California, based drone delivery service signed its first partnership with the government of Rwanda to make the last-mile delivery of blood to transfusion facilities throughout the country. In August 2017, the company signed a larger deal with the government of Tanzania to provide 2,000 medical deliveries a day to its far-flung health facilities.

But Rinaudo’s drone dreams are even bigger: to enable on-demand, low-cost delivery of medicines and other products for the planet.

Pivotal Pivots

Rinaudo earned a degree in biotech from Harvard, where he built DNA computers. After spending a few years on the professional rock-climbing circuit, he shifted to robotics. Rinaudo was particularly interested in how smartphone components could open up new doors for robotics, ultimately launching the company Romotive in 2012 with the Vegas Tech Fund.

Romotive raised some US$7 million and spent more than two years developing an app-controlled robotic toy for iOS devices before Rinaudo determined he wanted to do something more impactful with robotics. Robots are really good at repetitive tasks, so Rinaudo spent a year exploring seemingly mundane tasks that were ripe for disruption, ultimately settling on an area where he thought robots could have the most impact: medical logistics and delivery.

The Last-Mile Problem

Zipline’s aircraft, called “Zips” can fly 10 times the distance of existing commercial UAVs. Credit: Zipline

In 2014, Rinaudo traveled to Ifakara Health Institute in Tanzania, where he met a grad student working to digitalize part of the country’s medical supply chain. The student had built a mobile alert system that enabled health workers to text requests for emergency blood and medical supplies for critically ill patients. However, owing to the country’s difficult topography and its slow and inefficient medical supply chain, there was no way for the government to deliver many of these materials.

Browsing the growing backlog of medical supply requests that the student had collected, Rinaudo says he realized he was looking at a “database of death.” More than 2 billion people around the world lack adequate access to essential medical products, according to the World Health Organization, often due to challenging terrain and gaps in infrastructure. Over 2.9 million children under age five die every year and up to 150,000 pregnancy-related deaths result from lack of access to safe blood.

Robotic aircraft could solve the problem. Rinaudo established Zipline and moved to develop the Zip, a first-of-its-kind drone delivery service, as the final link in the medical supply chain for problematic geographies.

An Inside Job

Zipline’s team of 60 includes seasoned aerospace engineers recruited from companies like SpaceX, Google, Boeing, and NASA. “They’ve been drawn to the mission,” Rinaudo says, “using cutting-edge technology to save lives.”

The fixed-wing aircraft that Zipline has developed are capable of flying farther on less power and in more variable weather than the multirotor machines typically referred to as drones. The Zips can fly 10 times the distance of existing commercial UAVs. The company has built the robotic systems for launching and landing their Zips, as well as the algorithms in the flight computer and air traffic control software, in-house. “Off-the-shelf quadcopters can’t get the job done,” Rinaudo explains. “We need a purpose-driven vehicle capable of making deliveries at a national scale.”

Rwanda’s Leap of Faith

Zipline began its deliveries in Rwanda, which is known as the country of a thousand hills. The topography makes for a striking landscape but challenging logistics. “The government was ready to step forward and make a national commitment to expanding healthcare access with technology,” Rinaudo says. Because Rwanda is one of the most densely populated countries in Africa, with a land area the size of Maryland, Zipline could serve almost half of the nation’s population from its single distribution center. (Ultimately, the Rwandan government has said it wants to ensure that delivery of essential medical supplies is no more than 30 minutes away from all 12 million Rwandans.)

“Millions of people across the world die each year because they can’t get the medicine they need when they need it. It’s a problem in both developed and developing countries.We can help solve it with on-demand drone delivery.”

Zipline launched its first blood drops from Rwanda’s capital, Kigali, late in 2016. The company flies 15 planes (which weigh about 14 kilograms fully loaded) simultaneously, using data provided by GPS and Rwanda’s Civil Aviation Authority to guide the flights. Powered by lithium-ion battery packs and twin electric motors, the Zips don’t have to be refueled.

To make deliveries, the planes fly about 40 feet above what Zipline calls the “mailbox” near a clinic (an area approximately the size of two parking spots) and drop the packages to it. The clinics do not need to install any infrastructure. To begin service to a new site, Zipline performs a survey flight to map the area and can start deliveries within two days.

One of Zipline’s central innovations is the aircraft landing system at its distribution centers. “We need to take off and land from the same place with limited space,” says Rinaudo. Mimicking the wire and tailhook systems the U.S. Navy uses to snag jets onto its carriers, Zipline engineers developed a pair of robotic arms that hold a wire. On approach, the plane sends a signal to the robotic arms, triggering them to raise the wire to the right height for the plane to snag it before stopping on an inflated landing mat nearby. The solution enables the planes to decelerate from 100 kilometers an hour to zero in half a second with no runway.

Developing the technology to operate and land the UAVs safely and effectively was easy, Rinaudo says, compared to integrating with Rwanda’s national health system. There were challenges with back-end systems integration. Zipline has also had to consider local air traffic and health regulations and develop education and training for distribution center workers. “We work hand in hand with military and civil aviation authorities, the national blood center, clinics around the country, hospital staff, and members of the surrounding community,” Rinaudo says. “All of them have a key role to play. And building those relationships while strengthening the overall operation takes time.”

Reverse Innovation

A healthcare professional collects air-delivered supplies. Credit: Zipline

Last summer, the government of Tanzania signed a deal with Zipline to develop the largest national drone delivery service in the world with four distribution centers and more than 100 drones. The initiative aims to serve 10 million Tanzanians (approximately the population of the U.S. state of Georgia). Zips in Tanzania will deliver not just blood but also emergency vaccines, HIV medications, antimalarial drugs, and critical medical supplies like sutures and IV tubes.

Although Zipline is focused on its East African operations, its approach could prove valuable anywhere. “Millions of people across the world die each year because they can’t get the medicine they need when they need it. It’s a problem in both developed and developing countries,” Rinaudo says. “We can help solve it with on-demand drone delivery. And African nations are showing the world how.”

The company has worked with the U.S. government to explore tests of medical supply drone delivery to remote communities such as Smith Island in Maryland, Pyramid Lake Tribal Health Clinic in Nevada, and the San Juan Islands in Washington. It plans to expand within the United States in 2018.

Taking Drones to New Heights

Rinaudo’s focus on using drones to deliver items that have a significant impact on someone’s life has attracted prominent funders, including Sequoia Capital, Google Ventures, Microsoft co-founder Paul Allen, and former Yahoo CEO Jerry Yang.

It’s not clear yet whether drone delivery cuts costs. A report published in 2016 by the Johns Hopkins Bloomberg School of Public Health and the Pittsburgh Supercomputing Center noted that using UAVs to deliver vaccines in low- and middle-income countries may save money and improve vaccination rates. Zipline executives have reported that its deliveries for routine restocking are more expensive than standard trips by road, but responding to emergencies costs less.

To evaluate Zipline’s impact, global health researchers from the Ifakara Health Institute and the University of Glasgow will assess how deliveries from one of its planned distribution centers affect the clinics the company serves.

The value in lives saved is clear, says Rinaudo, and that is fueling development. Costs will come down over time, he adds, and the practical use cases within healthcare will expand. Eventually, Rinaudo envisions, Zipline’s approach could be practical for a range of possibilities beyond medical supplies. Meanwhile, the success of companies like his could serve as a springboard for a new category of aircraft more reliable and durable than cheap consumer drones but less expensive than multimillion dollar unmanned military aircraft. D!

How Mining Productivity And Safety Soar With IoT Innovation

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Unmanned aerial vehicles (UAVs)—better known as drones—are becoming important tools in mining and milling.

Yet UAVs might not have been so quick to take off in commerce without an ambitious announcement by Amazon in 2013 and the growth of what we now call the Internet of Things (IoT).

Today much innovation in business processes involves the IoT’s vast network of objects, such as drones and smartphones, which exchange information through the Internet.

Innovation on your doorstep

Five years ago, most people thought of drones as instruments of warfare. But Amazon revealed it was developing drones for doorstep delivery of customer orders.  The consumer fulfillment service estimated that in five years it would be able to deliver goods by drone within 30 minutes of customers placing orders.  The New Republic called the project a space-age cartoon “fantasy.” The magazine indicated that FedEx leadership considered Amazon’s plan a joke.

Last March, Amazon finally overcame enough obstacles to launch its first drone delivery within American public airspace. And by that time, drones were already aiding the mining and mill products industries.

It’s perilous to consider digital innovation a joke. Businesses may get left behind by failing to invest in technology that leads to improved performance and competitive advantage.

IoT and Big Data management

What seems like science fiction today may become tomorrow’s business success story.

From alarm clocks that connect with work computer systems to fleets of drones that share information, IoT objects provide machine-to-machine communication that people do not need to initiate.

These objects contain sensors that accumulate data. IoT-solution software gathers this data through the Internet, then sorts, analyzes, and responds to the information. Another more powerful level of software called a platform helps all the software programs work together.

Due to its quantity, the information gathered from IoT sensors is called Big Data. Mining UAVs produce huge amounts of data, because they are used for projects such as 3D mapping of company land.

Drones over Goonyella

The Australian Business Review described the mapping process in a March 2016 article about Queensland’s Goonyella Riverside open-pit coal mine. BHP Billiton and Mitsubishi own the mine.

Goonyella began using UAVs in 2015. Each is battery-powered, weighs 2.5 kg (about 5.5 lb) and flies up to 40 minutes at speeds up to 80 km/h (about 50 mph).

A flight plan uploaded to a drone’s memory card tells it where to fly over the mining site. Then the drone may cover up to 80 ha (roughly a third of a square mile) using IoT-connected sensors and cameras to gather data (such as volumes) and images for conversion to 3D maps.

The newspaper reports that the information gathered by a single drone in 40 minutes would take weeks for a team of surveyors to record. Now, surveyors are expanding into management of data produced by drones.

BHP Billiton is one of the world’s largest mining companies and is also known for production of metals and gas. Writing at the BHP Billiton blog, Frans Knox—head of mining production—says UAVs are less expensive and safer than planes for survey work.

Knox emphasizes that drones are helping BHP Billiton to improve worker safety overall. For example, he says, drones monitor road traffic and hazards at mine sites.

Also, Knox adds, drones can identify whether mining areas are clear before blasting. Afterward, they record any blast fumes. He adds that the UAVs also aid inspection of multi-story objects such as overhead cranes so employees can minimize dangerous work at heights.

Lessons from birds

Drones face dangers, too. One aspect of working with them that mining companies never expected is their destruction by eagles, which view them as prey.

Both South Africa’s Gold Fields mining company and BHP Billiton have tried camouflaging the vehicles. Gold Fields painted theirs to look like small eagles, but wedge-tailed eagles continued destroying them. By November 2016, the company had lost $100,000.

According to the avian conservation organization Audubon, wildlife biologists have encountered similar problems when using drones to study birds. Nevertheless, the magazine reports that UAVs save researchers’ lives.

In the past, these scientists flew in light aircraft to get close to bird nests in places that are difficult to reach. But crashes—many at low altitude—became the “number-one killer of wildlife biologists,” Audubon reports.

Audubon also reports that the price of UAVs is dropping as more manufacturers produce them. It adds that some UAV designers are finding ways to make the vehicles more durable.

UAV designers have gained ideas from birds. The magazine notes that innovations include arms for grabbing objects in mid-air, “kestrel-like legs that allow drones to perch” and the ability to glide on thermal updrafts.

Another improvement Audubon cites is UAVs with “vision-based navigation” to avoid obstacles.

Overcoming obstacles

Three of the biggest obstacles to commercial use of drones are legislation limiting their use in public airspace, cost, and managing the high volumes of data they produce. UAV design may ease the first problem as drones become less prone to crashes.

As for cost, development of UAVs for the consumer and academic research markets helps make them more affordable for industrial tasks.

Finally, the third obstacle is disappearing as digital technology designers create tools and IoT-solution software for harnessing Big Data.

Five years ago, few corporate executives knew much about the IoT and how it would create new tools for productivity such as UAVs. Now, industries such as mining and milling are showing business another way to take off digitally.

Learn how to bring new technologies and services together to power digital transformation: download The IoT Imperative for Energy and Natural Resource Companies. Explore how to bring Industry 4.0 insights into your business today: read Industry 4.0: What’s Next?

How Smaller Wholesalers Can Tip The “Direct-to-Consumer Effect” In Their Favor

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The wholesale distribution industry is facing unrelenting, competitive pressure from all directions. E-commerce giants are offering Web-friendly convenience, steep membership discounts, and same-day shipping. Retailers that once relied on shipping large volumes of inventory to brick-and-mortar stores are now closing hundreds of stores to focus more on their online sales channels. And even industrial manufacturers are jumping on the bandwagon by selling directly to contractors.

As retailers and manufacturers find ways to cut out the middleman in their supply chains, small and midsize distributors have to work harder than ever before just to stay in business. They need to reinsert themselves into the customer experience by reshaping the value chain; reimagining operational processes; and enabling compelling, value-added business models.

Changing the way an entire industry competes may not be an easy feat, but it’s not impossible. According to the Oxford Economics executive study “The Transformation Imperative for Small and Midsize Wholesale Distribution Firms,” sponsored by SAP, emerging digital tools can empower distributors to increase efficiencies in logistics and operations, offer tailored experiences for customers, and improve supply-chain visibility.

Engaging customers smarter, not harder, builds the foundation for growth

For many years, I have worked with a variety of wholesale distributors – most of which report revenues of US$500 million or less – to tip the direct-to-consumer effect in their favor. In every interaction with our customers, a common goal guides the conversation and technology investment: they hope to differentiate themselves from the competition in new and creative ways that will keep their customers happy.

E-commerce may seem like old news for retailers, but it’s a part of the customer experience that most small and midsize wholesalers are missing. This is a lost opportunity that cannot be regained any other way, considering that most B2B procurement officers and consumers prefer the ease, convenience, and immediacy of an e-commerce site. Very rarely does anyone like to talk to a sales representative on the phone or order an item through email.

However, creating an e-commerce site is not as easy as posting a digital catalog and an order form online. Instead, wholesalers need to think like highly revered digital retailers, such as Amazon and Alibaba, to engineer an online customer experience that optimizes the value of every customer interaction.

For example, a distributor can increase sales orders and improve its inventory hit-rate by making real-time price and stock-level information transparent to all customers online. By analyzing a few years of historical sales transactions with the help of an in-memory computing platform, a wholesale distributor is better equipped to ensure its customers can get the products when and where they need them.

As this scenario proves, the combination of consolidated transactional and inventory information and analytics can help deliver an experience that customers demand and the value wholesalers need to stay competitive. But this is only the beginning – wholesalers can take that customer experience a step further by integrating emerging technology such as:

  • Artificial intelligence: Recommend alternatives or new offerings based on purchase history or items in the shopping cart.
  • Drones or Uber drivers: Compete against the promise of same-day delivery by moving the order from submission to the customer’s job site or warehouse in a matter of hours, not days.
  • In-house 3D printing: Give customers the power of choice. Allow them to purchase products that meet their specific requirements and preferences on demand and without having to be put on a waitlist as a special order or back order.
  • Internet of Things: Work with the manufacturer by tapping into the information generated by sensors embedded in its products to notify customers when a replacement or maintenance may be needed.
  • Process automation: Take every opportunity to collect rebates and charge-backs by automating the complex, high-volume process.
  • Smart vending machines: Install smart vending machines at customer locations or job sites so buyers can access what they need – such as office supplies, safety equipment (including goggles and gloves), and other products – when they need them. By swiping their employee badge, the machine will automatically log the charge in the wholesaler’s invoicing system and can even trigger automatic replenishment.

As you can see, emerging technology brings tremendous value to the wholesale customer’s ordering experience. By realizing the importance of integrating information, workflows, and technology, small and midsize wholesale distributors can address the digital pillars of the buying experience – the customer, supplier, core business processes, and business networks. And for the customer, the level of convenience, ease, and speed that this approach offers will keep them coming back for more.

Get digital transformation right to help your wholesale distribution business leverage its inherent strengths to build a strong and customer-focused future. Read the Oxford Economics executive study “The Transformation Imperative for Small and Midsize Wholesale Distribution Firms,” sponsored by SAP.

Digital Agriculture: Start Simple, Start Now

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The world talks a lot about digital transformation. Few relate it to agribusinesses where plantations and dairy, poultry, or fish farms immediately come to mind. Even fewer connect it to Southeast Asia (SEA) where buffaloes are still employed in the fields.

But agriculture businesses are not digital dinosaurs. Far from it; business owners, farmers, and other industry players are remarkably open to the promise of digital innovation.

Faced with supply-side challenges, as the world’s population and therefore food demand are progressively on the rise, why wouldn’t they be? Agribusinesses know they need to increase production and enhance yield while managing rising costs. With regulatory pressures mounting, they know they need to be smarter about safety and sustainability.

It’s about clearly defining the role that digital plays – especially for large farms in SEA

The issue arises when digital advocates talk incessantly about the big vision without articulating how any of the components make sense for each individual business, plantation, or farm.

Sure, drones, connected machines, and field sensors are more affordable than ever and are driving greater efficiency, agribusiness owners say. But how can they be utilized in my plantation, especially when it’s much larger than most farms?

Yes, they say, data-driven decisions are more precise than intuition for improving fertilizer planning. But what changes will I have to make to my infrastructure?

For agricultural businesses, going digital needs first to be about clearly articulating the wins that digital will afford the business, then clearly defining the role it plays, and subsequently mapping out the steps to get there. This is far more important than just obtaining newfangled digital capabilities.

It is particularly so for Southeast Asian agribusinesses, many of which deal with massive plots of land, making every new implementation that much more complex.

Taking baby steps now to future-proof tomorrow

With that in mind, it becomes clearer what agribusinesses’ next move towards digitization should be: pragmatic, baby steps.

Rather than talk about the seven new innovations at hand and how they can turn my farm into a digital enterprise, the more pertinent questions should be: How can we take one or two technologies and try it in one farm? How can we take the most relevant innovation and make it work harder for us? What are the benchmarks for success, and when do we start rolling out the successful pilots?

Take the idea of connected farming in palm oil plantations as an illustration. The ability to track individual palm trees to let each thrive at its optimum is valuable. But in large plantations, implementing a sensor per palm tree to attain the benefits of the Internet of Things (IoT) may not be practical cost-wise.

An alternative could be to deploy drones with multi-spectral imaging cameras. It takes way fewer drones than sensors to monitor the same area. Aerial imagery allowing individual palm identification is then fed into the cloud for analysis against a set of parameters. The outcomes could tell plantation owners if a palm tree – or a group of trees in a certain area – is short on nitrogen so they can apply fertilizers in the right areas. This targeted fertilization approach shaves unnecessary fertilizer costs – a large part of operating expense – and reducing the environmental footprint.

So what started out as an objective to let each individual palm tree thrive also ends up slashing costs and enhancing sustainability.

Baby steps, not-so-baby results.

Don’t underestimate the first-mover advantage

It is important to get an early start.

Industries, such as retail and media, that have already gone through this type of disruption have shown that the early mover will experience a significant advantage.

This is no different in digital agriculture. The good thing is: Agribusinesses can act now and still claim first-player gains. But the clock is ticking.

Wait too long, and enough innovations will come to alternative crops for them to take over the sweet spot. In the longstanding soybean vs. palm battle, this is a real concern.

What new innovations have you been considering? Can you try one out at one farm and make it a roaring success? Drop me a line; I’d be keen to exchange views.

Too many people worldwide are going hungry. This is Why We Must Rethink The Global Food System.

Improving Rail Safety With The Intelligent Enterprise

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Safety is of paramount importance to all rail operators and a core strategic tenet for each of the Class I Railroads in NA. Accidents and incidents are reported to the Federal Railroad Administration (FRA), and a review of recent accident data shows an overall improvement in accident rates of 10.7% since 2014. However, derailments remain the most common train accident with track issues a leading cause.

Size, complexity, and manual processes limit the opportunity for improvement

In North America, Class I railroads own and maintain their respective networks and infrastructure, including assets like track and bridges. The size of these networks varies from 6,000 route miles across 10 U.S. states and Mexico to an impressive 32,500 route miles across 28 US states. Each railroad has developed a maintenance of way program to inspect and maintain their broad networks to ensure safe and efficient operations. Typical inspection programs call for inspection of every foot of track up to twice a week. The complexity in planning and scheduling the people and equipment necessary to accomplish this as well as fully leveraging the volume of data is daunting, not to mention prone to error due to the manually intensive processes.

It stands to reason that more frequent inspections would likely lead to increased safety and fewer track-related derailments; however, due to the size and complexity of the networks and many sections of track being in remote areas, increasing the frequency of manned inspections comes at great cost and inconvenience.

An intelligent enterprise can help overcome these challenges

Organizations have access to a plethora of data, but it tends to be siloed with no single version of the truth. This makes analysis and extracting insights challenging if not impossible. In the digital world, organizations need to be able to turn data into insight into automated actions in real-time while seamlessly connecting their supply chain for execution. Figure 1 illustrates this premise and offers a digital transformation framework.

Digital Transformation Framework

Figure 1: Digital transformation framework

Furthermore, Figure 2 illustrates how the elimination of manual processes and tedious tasks through automation can have a profound impact on an organization’s ability to be proactive and spend more value-added time and energy on what matters most: the customer.

Intelligent enterprises elevate employees to focus on higher-value tasks

Figure 2: Intelligent enterprises elevate employees to focus on higher-value tasks

Applying the digital transformation framework to rail

Let’s apply this framework to rail inspections and ultimately improving rail safety. It starts with access to rich sources of data, including sensor, maintenance, and even high-fidelity image data. Incorporating drone inspection technology into engineering maintenance programs for linear assets and structures like bridges enables an increase in the quality and quantity of inspection work that can be accomplished by having a direct correlation on safety.

For example, being able to capture high-resolution exterior shots of bridges as well as the ability to fly underneath and inside recessed areas, which are difficult and dangerous to manually inspect, ensures critical load-bearing areas are captured from every possible angle. LIDAR equipped drones can detect hairline cracks in rail and ties often undetectable through visual inspection. Additionally, beyond the visual line of sight and autonomous operations are now enabling more efficient and cost-effective drone applications. But capturing the data is only the beginning.

The critical next step is to turn inspection data, which has now been enriched with high-volume, high-fidelity image data into real-time insight. Leveraging image recognition capabilities powered by machine learning offers a robust and extremely efficient way to automatically analyze and identify potential maintenance issues. The system is trained to look for cracking, crazing, discoloration or other indicators that often precede a failure. Machine learning technology offers a very high success rate which will continue to improve over time as the volume of data increases and it continues to learn.

Leveraging a business rules framework, it is possible to then automatically initiate the required intervention. For example, images reveal cracking on a gusset plate connecting structural members of a bridge. The image is identified as being out of tolerance and in need of repair. A work order (WO) is automatically created inside the asset management application within the digital core along with a requisition for materials to complete the repair.

Finally, integration with suppliers and partners completes the end-to-end process. For parts not on hand in inventory, a PO is automatically created and sent to a preferred supplier via a fully integrated business network. And communication and scheduling of the physical work with full time or contingent maintenance of way gangs can be seamlessly accomplished through tight integration with a total workforce management solution.

Drone Inspection Seamlessly Incorporated into an End-to-End Process

Figure 3: Drone inspection seamlessly incorporated into an end-to-end process

Delivering the intelligent enterprise to improve rail safety

Adoption of drone inspection capabilities to supplement and/or replace traditional inspection methods as part of a seamlessly connected end-to-end process (Figure 3), has the potential to further move the needle on an already impressive rail safety record. Many railways are starting to embark on pieces of this journey today, but critical to long-term success will be leveraging an integrated platform to bring it all together in real-time.

Beyond safety, additional benefits could include improved productivity, increased network velocity, as well as higher asset utilization. This is only one example of how SAP is uniquely positioned to help companies turn data into insight into automated action and to deliver the intelligent enterprise.

For more on emerging technologies in business, see Creating The Intelligent Company.

9 Things To Increase Your Digital IQ

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Keeping track of all the news in the digital economy is a tough task. So we’ve put together some of the latest and most interesting news bits that you may have missed.

1. Drones and airplanes = No big deal

At least, according to one study from researchers at George Mason University, which examined incidences of collisions between aircraft and birds. They found that most flying animal encounters didn’t result in damage, and those that did were due to large birds. Further, only a small percentage of those crashes ended with someone getting hurt or dying.

2. Internet of Things in Washington

A bipartisan bill was introduced this month that aims to regulate the IoT. The “Developing Innovation and Growing the Internet of Things” Act – or the DIGIT Act, for short – calls for a working group to examine IoT needs and development and also for the FCC to report on whether there will be enough spectrum available to manage the U.S.’s share of the predicted 20.8 billion connected things that will be in use by 2020.

3. Driverless cars… at some point

The National Highway Traffic Safety Administration announced that driverless cars are a-OK according to the laws already on the books – but that’s only if they have steering wheels and brakes. Also, if you’re saving up for your first autonomous vehicle, it looks like you’ll have plenty of time to throw dimes in the old piggy bank. During at talk at this year’s SXSW, a Google project manager said that the company’s cars are likely to be introduced in stages, and environments with sunny skies and clear roads will probably be the first on the list.

4. Smart(er) cities with Alphabet

Alphabet’s Sidewalk Labs wants to become traffic cops. The company’s Flow analytics platform will take all the messy data that comes from your morning commute in order to turn your rush-hour traffic jam into an efficiently flowing, data-driven stream.

5. Smart health with blockchain

One of the tech-smartest countries in the world, Estonia, will be using a company called Guardtime, which uses a type of blockchain technology, to secure the health records of all the country’s citizens. Hopefully, this will help them avoid attacks like these hospital hacks.

6. E-commerce and VR

Chinese mega-e-commerce company Alibaba just announced that it’s got a virtual reality research lab. It’s called GnomeMagic Lab. The primary goal: figuring out how to combine VR and online shopping.

7. Name that film

You know that film, right? The one with that actor… what’s his name… and he’s in a submarine… A tech company aims to help cure Forgotten Film Syndrome with whatismymovie.com. The site is a “descriptive movie search engine” that uses deep content to analyze all the elements in a film that, until now, couldn’t be used as search components. For now, the site only has English-language films.

8. Privacy I

The FTC sent letters to a bunch of Android app developers who were using SilverPush ad software. Turns out SilverPush can pick up audio in a surrounding environment, but doesn’t notify phone owners, a violation of FTC rules.

9. Privacy II

With the discussion between the FBI and Apple about encryption and access continuing, some tech companies, including Google, Snapchat, and Facebook, are reportedly looking to increase encryption. Apple also seems to be looking to further increase encryption and make it more difficult for investigators like the FBI to access information.

The half-life of knowledge is shrinking. To make sure you and your employees don’t get left behind, learn How to Create a Culture of Continuous Learning.


Digital Trends Will Drive Competitive Advantage – Virtual Reality, Blockchain and others

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The future will be what we make it. Unlike the past or the present, it’s the only arena where we have any control. But the future, as the saying goes, isn’t what it used to be. As digital technology rockets through the exponential growth curve, there’s only one way to ensure long-term competitive advantage: Be better at seeing the future than everyone else.

Walking 30 normal steps takes you about 30 meters. But 30 exponential steps – where each is double the one before – will take you on a round trip to the moon. Astonishingly, the last two steps are 75% of the total distance, with the final step reaching from the moon back to earth!  This reveals why advances in digital technology are coming at us so rapidly. We’re about 30 exponential steps into the march of Moore’s Law.

Digital Futures examines the powerful digital forces reshaping the world over the next 5–10 years. These stories will help you prepare for the amazing opportunities they hold and anticipate the risks you’ll want to avoid.

Here’s a sample:

  • Are self-driving cars a joyride or a wrong turn? Either way, there are sharp curves ahead. Cars that drive themselves will be a profound shift that touches almost every industry, geography, and aspect of life: our hometowns, car design, liability, safety and even the car industry itself.
Small drone Side A
  • Drones generate a lot of buzz. We are hurtling toward a future in which drones are widely available, increasingly autonomous, and capable of tasks we have not begun to imagine. They will augment human capabilities in a range of commercial industries including agriculture, utilities, scientific research, and emergency response.
  • Virtual reality, and its digital sibling augmented reality, is emerging from science fiction into the real world and will soon change everything from shopping and entertainment to healthcare. Future uses may even transform our very definition of reality.
  • Bitcoin’s blockchain could disrupt our financial system. Its model of trust, through massively distributed digital consensus, is challenging our assumptions about what makes transactions secure. As a result, this computer science breakthrough might reshape commerce across the entire digital economy.

Small robotics Side A

  • The future of robotics will be more like Ironman  than Terminator. While robots excel at lifting heavy objects, working in dangerous places, moving with precision, and performing repetitive tasks, human advantages suggest we should blend the best of people and machines.

“It’s difficult to make predictions, especially about the future” is a quote with hazy provenance. What’s clear, though, is that exponential technologies like self-driving cars, drones, and virtual reality are not just hot, trending topics in your social feed. They will – individually and in combination – disrupt industries, create new winners and losers, and radically change many aspects of society.

The purpose of Digital Futures is to give you the foresight to help ensure the very best outcomes – to make business and the world run better.

Is Anti-Drone Tech The Next Billion-Dollar Business?

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The market for drone business services is worth more than $126 billion, according to a recent PwC report. Another report, which separates drones by type and use, predicts the market will reach $5.59 billion by 2020, a 32.22 percent increase in five years.

But will it be lapped by anti-drone market?

Dedrone, an anti-drone technology company based in San Francisco, raised $10 million in investment funding in mid-May, led by VC Menlo Ventures. Dedrone’s product, DroneTracker, is a sensor system that notifies users of the presence of drones and can integrate anti-drone tactics like jammers.

Dedrone isn’t the only tech company active in the anti-drone segment. According to a recent report, the anti-drone market will grow by 23.9 percent by 2022, reaching a global value of $1.14 billion. North America will account for the majority of the market, but the fastest-growing will be Asia.

The problem creates a perfect storm of new technology vs. uncertainty about legality and regulation. The National Telecommunications and Information Administration just released drone guidelines—with emphasis on the word “guidelines,” which they’re calling “voluntary best practices” to safeguard privacy.

But there are no legal teeth behind this document. The suggestions cover collection and use of data, and there’s an appendix called “Guidelines for Neighborly Drone Use” which includes such admonitions as “[d]on’t harass people with your drone.”

With laws and guidelines still being worked out and the continuing debate over what is acceptable drone use, there are more anti-drone businesses popping up that cater to military, commercial, and personal applications.

Then there are the incidents of drone collisions, which not surprisingly are increasing as there are more drones flying. According to the FAA, 764 drones were flown illegally close to aircraft last year, prompting the agency to launch a “drone detection system” pilot at New York’s JFK airport. In the UK, there have been 15 close calls between drones and aircraft in the first 4 months of this year, according to research done by The Telegraph.

In Europe, NATO countries are partnering to research anti-drone technology. During this summer’s European Championship in France, there will no-drone fly zones over the fields and stadiums where matches will be played, enforced by French police and the country’s Air Force. The Euro 2016 head of security has called this a preemptive measure and not a response to any specific threat of terrorism or attack.

Other militaries and aviation authorities are also investigating anti-drone programs.

Washington, D.C.-based DroneShield also just raised more investment from VCs, but the company’s start came from crowdfunding site IndieGoGo, where it raised more than twice the campaign’s ask. It also uses a sensor-based detection system, coupled with online monitoring.

It’s not just startups that are launching new products into the market. Established aviation companies including Boeing, Airbus, and Lockheed Martin are also developing tools, although not for general consumer use. Boeing uses lasers to shoot down drones; Airbus uses a jammer. Britain’s OpenWorks has developed a shoulder-supported system (like a bazooka) that shoots a net to capture drones; it is similar to the DroneDefender from Battelle, except that “shoots” a drone-jamming signal. Reportedly, the Pentagon just put in an order for 100 of these.

Not surprisingly, there are also more forceful military solutions, like the U.S. EAPS project, which shoots drones down with a cannon and a course-correcting projectile.

And finally, there’s the old-tech way: Using raptors trained to disable drones, as tested by police in The Netherlands.

Is drone technology over-hyped? Read What’s All The Buzz About Drones?

Farm To Fork Goes Digital: How Agribusiness Digitization Can Feed the World

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By 2050, the UN predicts the world’s population will reach nearly 10 billion people. In order to feed this population, annual meat production will need to rise by over 200 million tons to reach 470 million tons. By 2030, global water demand will increase by more than 50%, reports Farming First. At the same time, the amount of arable land available to feed the world’s population is shrinking. In 2005, 2,300 square meters of farmland were available per person. By 2030, however, there will only be 1,800 square meters, reports FAO.

Even if we could substantially increase land cultivation and crop intensity, doing so would still not produce enough food to feed the world. The vast majority of additional food must come from increases in yield and reductions in food waste. Tomorrow’s world demands that we make changes today – and digitization in agribusiness is delivering.

Three key factors driving the shift towards digitization

Traditional industry boundaries and segments are blurring thanks to a new push towards digitization. In addition to increased pressures from world population growth, three key factors are driving this change:

  1. The need for increased farming efficiency. At the start of the value chain, there is tremendous pressure to increase the efficiency of farming to produce more high-quality food in a low-margin business and to reduce consumed resources. Growing consumer demand in developing markets is fueled by developing countries’ increasing population, which has a big appetite for meat and other high-calorie food. At the same time, the scarcity of resources, such as water and fossil fuels, and the decreased availability of arable land further drive the need for increased farming efficiency.
  1. The need for transparent and sustainable food supply chains. From farm-to-table movements towards the push for local and sustainably sourced food, consumers in mature markets strongly value food safety, food traceability, and sustainability. These demands place further pressure on agribusiness to develop transparent, connected, and efficient supply chains.
  1. The need to manage supply and price volatility. Today’s agribusinesses face highly volatile commodity prices and crop supplies. Agribusinesses must be prepared to pivot rapidly in response to supply and demand shortages, as well as market price fluctuations.

Drones, connected machines, and field sensors: How digitization in agribusiness can increase yield

Digitization in the agribusiness sector can significantly increase our ability to feed the rapidly growing world population in a sustainable way. Drones, for example, can help farmers identify crop health problems in pictures. Aaron Sheller, the owner of Precision Drone in Iowa, says he takes the images from his drones and then drops pins on a Google Earth viewer. He can then precisely apply fertilizer or pesticides to the spot that requires treatment. Sheller calls this a “prescriptive approach” that improves productivity and allows farmers to “put those nutrients exactly where they need to be so the crop can uptake it and we can achieve maximum success.”

Taking the prescriptive approach one step further is GEOSYS, which was recently acquired by Land O’Lakes. GEOSYS developed satellite-based remote sensing to provide farmers with current, actionable data. GEOSYS draws on historical records throughout the growing season and then combines this data with real-time observations from remote sensing technology. Rather than the “one and done” evaluation of a field that drones provide, GEOSYS empowers farmers with continuous monitoring, helping them identify problems before more visible symptoms are even present.

Cargill has developed its own solution to “prescriptive farming” that uses proprietary software to evaluate myriad conditions, including soil and weather, and make highly specific recommendations to maximize output. For example, consider concerns around peak planting time. Cargill’s software, known as NextField DataR, will crunch a number of different data pieces such as soil content, seed type, and temperature fluctuations to help farmers determine the optimal time for crop planting.

Early adopters are winning: Digital transformation now an imperative for agricultural production

The converging needs for increased farming efficiency, transparent and sustainable food supply chains, and management of supply and price volatility are driving the conversion to digitization. Agribusiness leaders need to decide where they stand while business transformation drivers and new technologies disrupt their industry. Research shows that early adopters are seeing significant value returns on their investments. Digital agriculture production yields a nine percent increase in revenue creation, a 26% impact to profitability, and a 12% increase in market valuation, reports CapGemini Consulting. The early results are clear: if we are going to feed the world’s population and meet consumer demand for sustainability and transparency, digitization in agribusiness is a must.

Bonus: Learn more about digital transformation of agribusiness.

Conquer Supply Chain Resource Scarcity With These 7 Technologies

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“Scarce.” It’s a great word. It’s probably a term that first appeared to me on some middle school vocabulary test. Little did I know then that the word would become such an integral part of my everyday lexicon as I embarked on a career in supply chain.

Oddly enough, the word “scarce” has always invoked a feeling of fear in me. Part of that is likely because it’s a mere one letter off from the word “scare.” More likely, I think it’s the fact that running out of something, particularly some precious resource, is a truly frightening prospect.

In today’s increasingly complex supply chain industry, resource scarcity is certainly something to fear – but it’s an issue that organizations can unquestionably overcome as long as they have the right strategies in place.

SCM World recently published a report on the topic of resource scarcity. The paper provides insight on how supply chain organizations can manage their operations in a more sustainable fashion. In essence, the research firm touts technology as a key enabler to conquering today’s greatest resource scarcity concerns.

How is resource scarcity impacting supply chain organizations?

By 2050, the world’s population is expected to grow to 9.7 billion, up from approximately 7.4 billion today, according to a 2015 United Nations Department of Economic and Social Affairs report. This will put a tremendous strain on the world’s water, raw material, mineral, and energy resources.

A water shortage will greatly affect chemical and industrial companies that use the resource in their manufacturing processes.

The declining availability and, incidentally, rising costs of raw materials and minerals will adversely impact end-product affordability, which translates to supply chain organizations operating at a loss.

Oil and gas companies face similar obstacles, with energy resource shortages resulting in high levels of commodity price volatility.

On top of all this is the increasingly concerning issue of human resource scarcity, which 56% of supply chain executives refer to as “extremely challenging,” according to a recent SCM World survey.

Technology is the key to managing resource scarcity

While a majority of surveyed supply chain practitioners believe they’re successfully managing resource scarcity – with 66% proclaiming themselves to be “first movers” or “fast followers” – many still lack the capabilities of overcoming their challenges.

According to SCM World, and the organizations that are thriving in this area, these seven technologies hold the key to addressing natural resource scarcity and sustainability:

1. Blockchain

This online public ledger is a practical way for companies to trace the origin of raw materials back through the supply chain. With an available list of visible records, known as blocks, supply chain organizations can better keep track of their resource supply and plan for potential shortages.

2. Sensors

More and more enterprises are leveraging the power of sensors and other Internet of Things-enabled devices to monitor and manage the use of water, energy, and other resources at production plants and distribution centers.

3. Drones

The military uses drones for combat missions. Children and adults play with toy drones in their leisure time. Now, supply chain professionals are employing drones to do things like check for leaks in hard-to-access oil pipelines.

4. 3D printing

Businesses are using 3D printing for everything today, from action figures to food. In supply chain, organizations leverage the power of 3D printing to reduce waste during the production process.

5&6. Big Data analytics and GPS

Agricultural companies combine the capabilities of GPS and Big Data analytics to optimize their growth activities. They can use these technologies to scout for prime locations to harvest and gain insight on how to improve crop yields.

7. Social media

Businesses regularly mine social media for customer feedback and potential product quality concerns. Supply chain organizations are monitoring the chatter on social media in order to flag certain supply chain risks. For example, social media can help supply chain experts gain vital information on how people in an area are reacting to severe weather events that may result in supply chain disruptions or resource availability.

Don’t let resource scarcity doom your business

No supply chain organization is exempt from resource scarcity. At some point or another, your enterprise will be impacted by a shortage in water, minerals, raw materials, energy, or skilled labor, and you must understand how to overcome this obstacle.

Cutting-edge innovations, such as those listed above, can provide your company with greater visibility into its resources, as well as insight on how your organization can prevent and address its resource scarcity concerns internally and across the entire digital supply chain.

Download the full SCM World report – Resource Scarcity: Supply Chain Strategies for Sustainable Business – to learn more about managing resource scarcity with the latest technology and to find out how leading companies throughout supply chain are already achieving this.

Supply Chain Leaders Boost Value With Digital Transformation

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If you shop at REI and the particular store you’re at does not have the size or color of the item you want, an employee can quickly and accurately see where the closest item is located.

Thanks to the effective digitalization of the company’s supply chain processes, REI is a leader in inventory visibility across its stores and distribution centers. The right applications enable it to provide outstanding service, achieve extraordinary customer satisfaction scores, and increase revenue.

Walking the knife’s edge

But how do you find a roadmap for digital transformation that fits your organization’s specific strategy?

Like many leaders across industries, supply chain executives often feel like they’re walking a technological knife’s edge. On one hand, they want to avoid over-investing in every shiny new solution. At the same time, they don’t want to fall behind and dismiss a critical trend.

SCM World has collected data since 2014 on strategic disruption created by new technologies, and one trend is clear: The relevance of the digital shift is huge and still rising, and the pace of change is too fast to wait and see what happens.

When asked in a survey which technologies are “disruptive and important” to supply chain strategy, responses have changed dramatically in just a couple short years:

  • 3D printing has doubled, from 20% to 40%
  • Drones and self-guided vehicles have tripled, from 11% to 35%
  • Big Data analytics leads the pack, from 64% in 2014 to 81% in 2016

Innovating the way business has been done for decades

Not surprisingly, years of new technological advances have created faster and more standardized business processes. The emerging digital supply chain is lighter and more agile, and these three business model disruptions show the impact of digital operations on strategy:

  1. Omnichannel leadership: Omnichannel leadership is about recognizing that consumer demand is only partially represented in retail point-of-sale data. True demand includes usage behavior, replenishment patterns, and lifestyle impact. REI thrives in this model because its stores are only a small part of the total demand sense and supply response system the company uses to serve customers.
  1. Personalization of products and services: According to an SCM World survey, 90% of supply chain professionals agree that customers value personalized products. Data also shows a steady rise in the number of companies whose operations are supporting “much larger SKU assortments” in response to digital demand, up 60% overall in just three years.
  1. Lean, green, and precise manufacturing: The other major business model disruption arising from digital is a shift toward resource-efficient and increasingly localized manufacturing. IoT-enabled equipment can optimize energy, water, and material use, and combined with smaller, cheaper collaborative robots, this equipment makes local-for-local manufacturing a real possibility.

Creating real value for your company

Even as business models shift, new technology is meaningless if it doesn’t create real value for your company. Across all industries, enterprises need to use innovative thinking to reimagine how digital supply chains can improve business strategy and transform business models.

How do companies focus their efforts, and which ones are already leading the way?

  • Focus on service to the end customer: Digital supply chains can use the power of the Internet of Things (IoT) to get products delivered to consumers faster, cheaper, and in a more personalized way than before.
  • Urban Outfitters: The retailer’s pick-from-shelf omnichannel capabilities added $9 million additional revenue in a single quarter.
  • Hilti: A maker of high-performance hand tools for construction work, Hilti has developed a comprehensive omnichannel system whose asset tracking uses smart supply chain to keep real-time information on where every tool is, allowing the company to sell more and respond to different levels of time sensitivity.
  • Focus on warehouse automation and delivery: Digitalization in delivery is also creating value in warehouse management.
  • Amazon: The retail giant uses sophisticated analytics in its fulfillment centers to optimize space utilization, minimize time to find and pick items, and shorten order-to-delivery cycle times.
  • Kiva Robots: This system, which runs the fulfilment operations for Zappos, moves items to packing stations rather than making people move around the warehouse, saving time and money and increasing item density per square foot of building space.
  • Focus on efficiency and agility: Digitalization in production improves process monitoring, control, and execution to make smaller batches of production economically.
  • Harley Davidson: The company transformed its Pennsylvania motorcycle plant from an old-school assembly line to a single-flow digital line that makes unique models one at a time. This agile manufacturing approach cut costs by 7%, increased productivity by 2.4%, and increased net margins by 19%.
  • BMW: Known for its effective manufacturing process, BMW uses smart robotics, planning, and 3D simulation software to sell custom configured automobiles at prices competitive with mass production.
  • Focus on resource optimization: Digital transformation helps reduce the cost of maintaining long-lived assets. Sensors on equipment monitor temperature, friction, and pressure to allow operators to maintain peak performance with much less work and spare parts inventory. Same time the performance of the asset system can be linked to business outcomes, influencing revenue and margin.
  • Trenitalia: The primary train operator in Italy created a smart asset management strategy that takes 5,000 signals per second from hundreds of sensors embedded in the train’s hardware and feeds them in real time into a reporting and analytics database to allow precision maintenance. The company expects to reduce maintenance spending by 8% to 10% per year, cut invested capital by 6.5%, and eliminate 10–20 million euros of penalty payments for service failures.

Across industries, the digitalization of processes and operations is changing what’s possible for supply chain practitioners. Download the full report, Smart Operations and the Internet of Things: Digital Impacts on Business Strategy, to learn more about how to offer customers a more personalized experience, where and how they want it, with less money and fewer resources spent along the way.

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