APICS Conference 2017

By Dr. Robert L. Gordon | 10/26/2017 | 10:03 AM


Guest Post by Dr. Stacey Little, Program Director for Transportation and Logistics Management, American Public University

Dr. Stacey Little, Program Director for Transportation and Logistics Management at American Public University attended the APICS conference in San Antonio, TX from October 15-October 17th. The APICS Conference hosted more than 2000 attendees from 50 different countries.  During the conference, there were several opportunities to meet and network with other supply chain professionals, students, and educators. 

The Conference offered over 60 educational sessions based on the SCOR model (Plan, Source, Make, Deliver, Return, Enable), 10 hours of Spot Light Sessions with specially curated content and two industry recognized Keynote speakers. Stacey presented on the topic of Post-Military Career transition to supply chain careers at a spotlight session.

The keynote speakers for the conference this year were interesting and engaging.  During the opening session, we heard from John Mackey of Whole Foods.  He highlighted the importance of focusing on the customer.  We later heard from Derek Kayongo, an expert in environmental sustainability. Derek is also the founder of the Global Soap project, where donated hotel soap is purified, reprocessed and redistributed to vulnerable populations around the world.

During the APICS Conference, there were networking lunches and receptions permitting attendees time away from the session to network and meet new people.  Finally, there was an Expo Hall set-up with over 50 exhibitors featuring education, technologies, supply chain solutions, and information regarding APICS membership and certifications.  American Public University was one of the educational exhibitors at the conference.

APICS offers a way to give back to the APICS community through a mentorship program.  At this year’s conference, Stacey served as a “Mentor a Scholar” by mentoring three students during her time at the conference.  For this program, mentors are matched with their students before the conference.  The mentor reaches out to the student prior to the conference for an introduction and plan for connecting at the conference.  The first meeting is a pre-conference Welcome Reception for new members and volunteers.  Outside of program sponsored events, mentors meet with the students at least an hour a day to share their professional and APICS experiences with the students.  It is a way not only to give back but to meet the best and the brightest supply chain students.

Lean Manufacturing leads to greater efficiency

By Dr. Robert L. Gordon | 08/14/2017 | 8:39 AM

Guest article by Dr. Keith Wade, American Public University System

Lean Manufacturing leads to greater efficiency

Lean manufacturing or Lean production is termed as a systematic approach that is used for elimination of waste within any given manufacturing system. Also, Lean considers wastes that are created through overburden and wastes being generated through unevenness in workloads. Lean is said to be based on making standard functionalities that add value by reducing any given element. Various benefits and risks are associated with Lean manufacturing. Below is the discussion entailing these advantages and risks (Myerson, 2012).

Improved quality and fewer defects

In Lean manufacturing, when batching and lot production are put away, there is always a less chance to manufacture defects. The reason is that the quantity time will be just one. Besides that, there will be no mountains of inventory to count, store, move and pick. Another reason is based on the single flow in Lean manufacturing that makes sure that any given problem that might be existing in the production is identified and rectified. Batch processing eliminates hours that are isolated to test other materials in the same production run to assess if they meet the necessary threshold (Myerson, 2012).

Lean manufacturing leads to reduced inventories

By implementing single section, flow needs each operation only to yield what is required by the subsequent process. When monitored properly, the process tends to remove any given opportunity to build ahead. Hence, inventories tend not to be permitted to accumulate. Since inventories levels are reduced, the reduced inventory results in less space being used.  The results in reduced human resources which are always required to store, count, deliver, stock and manage it. Besides that, single piece flow ensures there is manufacturing cells that squeeze machines into a single operator that has the capability of overseeing numerous pieces of equipment with the least number of walking motion (Myerson, 2012).

Lean manufacturing increases workers morale

Because there is the single piece of flow results, then the production issues that might be identified are solved on time, and team members can receive instant feedback on their respective work. Production feedback gives workers more ownership in their respective production areas. Besides that, due to the presence of Lean production workers tends to lead in solving their different efforts by focusing on the approaches and not in individuals. Through this method, there is more trust in managers (Myerson, 2012).

Lean Manufacturing leads to a safer environment

Lean production means there are fewer inventories that imply the presence of lighter on production methods and less clutter. Because all the stakeholders know the individual repeating tasks, this means there is less opportunity for sudden movements that lead to chances of accidents.

Risks Associated with Lean Manufacturing

Customer Dissatisfaction risks

Since Lean manufacturing process is dependent on supplier efficiency, the presence of any given disruption in the supply chain can be a problem that might affect overall stakeholders. Besides that, delivery delays can lead to sustainable marketing issues that can be hard to overcome.

High costs involved in implementation

The application of Lean manufacturing method means that the previous physical infrastructures and systems will be ultimately be dismantled. Besides that, the process of training of a new set of workers can be the length and the acquisition of managers who are experienced to deliver quality services might be expensive since even the payroll to maintain their salaries is also high. When focusing on machines that are needed to support Lean production, the setup of smaller work cells usually leads to long-term debts. Small and medium-sized businesses might be subjected to costs changeovers to Lean manufacturing that ends up being prohibitive (Myerson, 2012).

Costs of Failure

It is said that under the worst conditions, it is usually simpler that Lean production will not prove to be successful. The change to Lean requires a permanent overhaul of the company. As a result, workers might be lost because there are poor relationships and services with suppliers that might deteriorate. Also, it might not be feasible to backtrack to the old method of doing things; this usually leads to the ultimate failure of the business (Myerson, 2012).

Over-Focus on Waste

Lean production approach mainly focuses on elimination of waste that tends to override other concerns. Besides that, Lean strives to make sure efficiency and productivity primarily through cutting flab, however, in the process, this manufacturing method ends up ignoring other critical parameters such as wellness of workers and corporate social responsibility that are crucial factors needed to develop a good relationship with employees. Therefore, Lean manufacturing fails to address other critical concerns that end up making it ineffective to be fully implemented in any given production firm (Myerson, 2012).


In a nutshell, even though Lean production has got some benefits and risks at the equal measure, it is important to have solutions to the real risks that are in the Lean production. The move to Lean will increase the levels of success of any given firm. When overall production method is rectified then, the companies can get more profits and manage their business more efficiently.



Myerson, P. (2012). Lean supply chain and logistics management. New York: McGraw-Hill.

RFID technology is rapidly becoming a staple in the consumer industry

By Dr. Robert L. Gordon | 01/29/2017 | 11:03 AM

Guest Post by Kandis Wyatt, Associate Professor at American Public University

RFID technology is currently utilized at many Disney Theme Parks, and yes, some call it magic, but it is RFID technology. The customer is given a wristband that is read when you pass by a RFID reader. Using the wristband, you can pre-order food and have it delivered directly to your table, without standing in line. This technology transmits up to 40 feet, so your preferences are read by readers as you walk into a store, restaurant, or hotel. 

Here’s another way to think about RFID technology. Think about never waiting in line to check out. Can a cashier-free society become a reality? Amazon and its new Amazon Go Pilot Store offers this vision of a new reality. Customers download an app and using RFID technology, all the products in your shopping cart are scanned, your total is calculated, and your credit card is charged (Dignan, 2016). Think about how much time you would save if you did not have to wait in line, deal with cashiers, and swipe a credit card. How can this technology be expanded to the retail industry?

Imagine RFID technology in the automobile industry. RFID technology can be embedded in tires, car batteries, and engines. Using a standard RFID reader, you can perform a diagnostic check of your vehicle in record time, regardless of the manufacturer. No need to go to the car dealership and wait in line. Imagine the freedom of knowing when it is time to replace tires, get a tune-up, or replace major parts of your vehicle? A simple RFID reader can provide you with a wealth of information. There is currently a push to create a global standard for the automobile industry for RFID technology.

If you have ever driven on a major interstate highway in the United States, chances are you have paid money to drive on a toll road. These roads charge vehicles in exchange for ‘supposedly’ faster, smoother rides. Many toll plazas are using RFID technology to read a device in the car and automatically charge the customer. This RFID use saves time because the vehicle does not have to stop. Also, this cuts down on the number of toll plaza employees needed at each station. The technology is advancing more, and some brand-new cars already have the RFID technology built into their operating systems (Baars et al, 2015). The tags can be recharged depending on the use.

RFID technology has also expanded into the airline industry. Imagine having a RFID reader in your checked luggage? You could track the whereabouts of your bag always via the airline’s RFID reader system. Also, this new technology may alleviate the need for a paper ticket to track your checked luggage. Likewise, this technology can be expanded to paper tickets in the future. Instead of having to download a special application (app) for every airline you choose to travel, simply having a RFID reader installed can identify you and decrease your time at the TSA checkpoint. No need for TSA Pre-Check! This technology is currently being tested in New Delhi (TNN, 2015).

RFID technology is rapidly advancing, and becoming a staple in our everyday lives.

Baars, H., Kemper, H.. Lasi, H., and Siegel, M. (2015). Combining RFID technology and business intelligence for supply chain optimization scenarios for retail logistics. Proceedings of the 41st Hawaii International Conference on System Sciences, 2008. ISBN ISSN:1530-1605 , 0-7695-3075-8.

Dignan, L. (2016). Amazon Go: here are the takeaways business tech execs need to know. ZDNet. Retrieved from: http://www.zdnet.com/article/amazon-go-here-are-the-takeaways-business-tech-execs-need-to-know/

Hedgepeth, W. (2007). RFID Metrics: Decision Making Tools for Today's Supply Chains. Taylor and Friends Group.

TNN, Economic Times (2015). Get ready for tagless travel as airports planning to phase out cabin baggage tags . Retrieved from: http://economictimes.indiatimes.com/articleshow/55889765.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Growing the awareness of the supply chain

By Dr. Robert L. Gordon | 12/12/2016 | 4:22 AM

Guest Post by Stacey Little, Program Director, Transportation and Logistics Management, American Public University System

Ever wondered why when a junior high or high school student is asked about their career aspiration that they rarely mention logistics or supply chain?  On the rare occasion we hear that they want to be in logistics or supply chain, yet usually, it is because they know someone or one of their parents work in the field.  In fact, many students who do go into the profession admit that logistics and supply chain was not something that was on their radar while in high school.

What is the answer to this lack of awareness of this profession?  Why is logistics or supply chain not a sought after or dream job of a junior high or high school student?  I have often heard that logistics and supply chain jobs are associated with negative stereotypes and are not attractive to students.   Alternatively, the supply chain profession can be difficult to describe to young children. 

While attending an APICS Conference, I learned of an effort to bring awareness to Supply Chain and Stem through an outreach program targeting elementary, middle and high schools.  This particular program is customizable to children as young as kindergarten and as old as seniors in high school. I saw demonstrations of fun activities in which the school children could participate.  There were hands on activities with toys such as legos and paper airplanes for younger children and more advanced activities with cell phone supply for older children. I learned the goal of this outreach program was to reach 100,000 students by 2020. The outreach program is an excellent initiative providing ways for Logistics and Supply Chain Professionals to get involved.  Volunteers are a huge factor to the success of the outreach program.

Another initiative aimed at increasing supply chain awareness is the #iWorkinTheSupplyChain Campaign.  The campaign allows supply chain professionals to share their stories in efforts to inspire the next generation of workers.   Not only does it honor those who are successful in the field it highlights supply chain’s role in our economy. Showcasing supply chain professionals demystifies the supply chain profession.

Supply chain is an attractive occupation with a talent shortage that needs to be addressed.  As baby boomers in supply chain positions retire, the question is who will fill these positions?  These jobs should be highly sought after as there are so many facets and career paths that students can take.   Included in the information shared around the supply chain profession should be the emphasis on the value and importance of the employee roles in this functional area. Information like this will bring awareness to the types of jobs available as well as the professional people who occupy supply chain jobs removing misconceptions around the profession.

What can supply chain professionals do?

  • Public speaking -Accept opportunities to speak to others about the profession including career days at local schools. Be proud of your strategic and exciting career.
  • Mentor- Pay it forward by showing others how exciting this career field can be. Sharing your knowledge and experience can help others see how valuable the supply chains jobs are to the organization and the global economy.
  • Volunteer- Offer your knowledge to a small business trying to get off the ground or volunteer at a non-profit organization.
  • Write- Highlight your knowledge and skills by writing a blog or contributing an article to a local paper.
  • Social Media- use social media to spread the word of the exciting career experiences and opportunities that are available.

In today’s global, competitive environment supply chain roles within the organization are gaining increasing importance.  Organizations want to have the best talent in these positions.  Addressing the awareness issue will help bring more talented individuals toward the supply chain profession.   Sharing your experience can help reduce the confusion and negative stigma surrounding the supply chain profession.  Take steps today to make a difference tomorrow.

Has technology made us less ethical?

By Dr. Robert L. Gordon | 12/05/2016 | 5:00 AM

Guest Post by Kandis Wyatt, Transportation & Logistics Associate Professor, American Public University

Technology is advancing at a rapid rate. As a result, it is easier than ever to capture a person’s words, thoughts, and actions. Video, voice recordings, and other technological means of information have led to a proliferation of the replication of knowledge. However, as more and more ideas are disseminated in the world, there is a greater temptation to copy the ideas of others rather than develop something new. Also, the more ideas that people are exposed to, the potential exists that similar ideas could arise in different people.

In the written form, a word-for-identical-word match is a red flag for plagiarism. Depending on the format used, there is a preferred method to use to signify the work comes from another source.  At the 2016 Grand Old Party National Convention, Melania Trump was accused of plagiarizing portions of a speech given by Michelle Obama in 2008.  Ultimately, the speech writer took the fall for the incident, but what should be the consequences of not citing a person’s original work in print or a verbal speech?

There have been instances where the press has taken liberties with others’ work, and when they are eventually caught they typically leave the field in disgrace.  Just over a year ago, Brian Williams embellished a story about being fired upon when traveling by helicopter. The embellishment of the incident and about the facts turned Mr. Williams’ long career in reporting sour to the point he lost his job, and he made an apology to the American people.

Original thought is a requirement in academia, but what about using works that are not as well known.  What about business ethics? Jack Welsh would proudly proclaim that he stole good ideas from other companies, such as Six Sigma from Motorola. Six Sigma had been in use at Motorola for some years, and when Jack Welsh wanted to overhaul the flagging General Electric Company (GE), Jack made Six Sigma part of the plan. During the period that followed, GE was driven by the tenets of Six Sigma and GE showed savings of $12 billion over five years.

Currently, there are multiple companies working to perfect the self-driving car. However, will this type of technology be disputed in the future? Is each of these companies in development truly unique or is there some technical overlap? Also, what role will corporate theft or espionage have in the future?

The question that persists is, how does society hold a person accountable for their actions? What, if any repercussions, should be established in the future? It is important to highlight the pros and cons of utilizing original work in both the verbal and written format. Specifically, how to relay original information, how to use one’s words, and how to let the listener/reader know the source of information.

Over 500,000 registered drones in the U.S.

By Dr. Robert L. Gordon | 11/21/2016 | 4:02 AM

To date, there are over 500,000 registered drones in the U.S., and there are over 20,000 registered commercial operators of drones.  The FAA advises that over 3,300 people signed up to take the aeronautical knowledge test, which is one of the new requirements to operate a drone in the U.S.  The FAA estimates that more than 600,000 commercial drones could be in operation by 2017. 

These clear statistics and projects are the first quantifiable evidence to support the 100,000 jobs and $82 billion-dollar economy that drones represent.  The evidence is overwhelming at this point that drone will be a de-facto part of our lives soon.  Although the 100,000 jobs and $82 billion-dollar economy number has been projected in the past, the registrations and number of companies that are being registered with the FAA offer massive potential for drones.  Some people in government and business have concerns about this growth and potential; there are already many different applications that are on the horizon. 

Unmanned Aerial Vehicles (UAV) have already delivered medicine to remote areas, delivered burritos to hungry college students as well as being used to detect radiation and chemical leaks.  Current FAA rules require that drones remain within line of sight of the operator, the testing of UAV that operate beyond the line of sight are already being tested in The Netherlands.  Nokia is already working on technology to allow automatic flight control that can operate independently of a line-of-sight operator.  Nokia is working on an App that will allow for drone operations that can monitor drones in real time. 

Furthermore, the British Royal Navy and the U.S. Navy had a joint exercise in October where the navies of these nations tested unmanned, unarmed surface, underwater, and aerial vehicles.  With all this activity both commercially and with different militaries, is it any wonder that there appears to be a lot of potential in the future of UAV. 

Given all this activity by many of the major players in multiple industries, there is no doubt that the world of the drone is changing and changing rapidly.  Technology is moving forward faster than governments can legislate, making enforcement even more difficult.  However, this burning innovation will certainly help bring home many new technologies that will improve our lives.  The concern of some is how will these new technologies impact our future freedoms.  The nature and activities of drones and the impact on freedom remain an open question for the future.

Smarter cities of the future

By Dr. Robert L. Gordon | 11/01/2016 | 5:53 AM

Guest Post by Kandis Wyatt, Transportation & Logistics Associate Professor, American Public University

Traffic Congestion seems to be a common occurrence in major cities. Traffic Congestion, over time, can increase pollution rates, heighten noise levels, threaten economic growth, and increase commuting times. In fact, some studies have shown that traffic congestion can lead to health risks due to increased pollution levels.  Several techniques have been implemented to reduce traffic congestion including implementing telework policies for employees, widening roads, creating high-occupancy vehicle lanes, offering subsidies for employees to take mass transit to/from work, installing bike lanes, and carpooling. However, here’s another technology – smart technology- that can help lower traffic congestion as well.

How does it work?

Using smart technology, simple, everyday outdoor items such as a traffic light or a trash can help reduce congestion (Segraves, 2016). Trash cans will let the city know when they need to be filled. As a result, garbage trucks would be deployed on an as-needed basis. Also, motion detectors on street lights can help notify drivers when a parking spot is available. On a larger scale, cameras can monitor and predict traffic patterns. Think if this smart technology was connected to your phone or your vehicle – it could help re-direct you in real time. Smart technology has many advantages (Segraves, 2016). For example, motion detectors installed on street lights can save money over time. Also, the light can notify the dispatch location when they need to be replaced. All this technology can be input into a master system to optimize routes (Segraves, 2016).

Smart technology is already being developed by companies like SmartUp Cities in Europe to implement and deploy these smart technologies in urban centers.  In fact, Barcelona has already implemented many of these technologies and currently is one of Smartest City in Europe.  The advantages are clear, and so we should expect that more metropolitan areas will move to becoming smarter sooner than we think.



Segraves, M. (2016). D.C. Plans Streetlights that Save Money, Offer Wi-Fi, Help with Parking. Retrieved from http://www.nbcwashington.com/news/tech/DC-Smart-Streetlights-Save-Money-Wi-Fi-Help-Parking-Smart-Trash-Cans-397648271.html

Shipping Pilots: What happens next?

By Dr. Robert L. Gordon | 10/24/2016 | 5:26 AM

Finland has moved forward to declare that they will have autonomous vessels available by 2025.  Although this appears to be a bold statement, it will likely actually happen sooner.  Shipping has been behind in technology for a while, however, with just a push, shipping can move to the forefront of automation.  Navigational systems are already available that allow a single person to pilot a vessel.  That sounds pretty sophisticated, but when you compare it to new airplanes that can be landed by personnel in the tower, it seems that ships are a little behind.

Autonomous automobiles will become a fact of life in a matter of years.  Airplanes can already be landed remotely, so it will only be a matter of time before ships will no longer need a local pilot.  Alternatively, if a pilot is needed, the pilot would be able to take control of the vessel without ever having to endure the risky maneuver of climbing on board.    

The injury statistics are clear that the pilot transfer can be one of the riskiest parts of the job of a local pilot.  More pilots are killed while either boarding or departing the vessel, than in the performance of their duties.  After all, climbing a tricky pilot ladder in shifting seas can be pretty harrowing.  A fall from the pilot ladder can be fatal, although the different precautions and safety steps were taken in advance.   It would appear that given the dangerous nature of the operation, remotely operating a vessel would be a safer option.  However, shipping is not swift to embrace most technologies and so there would have to be significant testing and industry acceptance before such a leap of faith could be made. 

Although the safety of the pilot is important, the safety of the ship is paramount.  The question that regulators and nations will struggle with will be, is it safer than the current system?  Over time, there is no doubt that it will be shown to be safer.  After all, people are slowing accepting self-piloting cars and recently in the U.S. that once ‘evade and avoid’ systems are implemented, delivery drones will become a fact of life.

In the past, technology moved at a pace where governments had time to consider different restricting legislation and local laws.  Now, technology is moving so fast that both national and international governing bodies are struggling to keep up with the waves of innovation.  Clearly, there will need to be faster ways to implement new rules, and this will be one of the future challenges for governing bodies in the future.

APICS Annual Conference - Washington, DC

By Dr. Robert L. Gordon | 10/10/2016 | 6:00 AM

Guest Post by Stacey Little, Program Director, American Public University System, and Irv Varkonyi, President, Supply Chain Operations Preparedness, and Karen Pentz, Professor, American Public University System.

APICS Conference Picture

Photo: Dr. Stacey Little at APICS Conference

The APICS annual conference took place in Washington, DC from September 25th through September 27th, 2016.  Several members of the Transportation and Logistics Management faculty at American Public University attended the conference.  A great benefit of APICS’ membership is the ability to participate in the annual conference.  During the conference, there are several opportunities to meet and network with other supply chain professionals, students, and educators.  The keynote speakers for the conference this year were exceptional.  The first keynote speaker was Bill McDermott, CEP of SAP.  He highlighted the importance of focusing on the customer and customer service.  The second keynote speaker was Mel Robbins, author, commentator, and legal analyst for CNN.  She hit home with her explanation and challenge to make a change.

There were more than 65 educational sessions offered allowing attendees countless opportunities to engage in instructor-led sessions.  The learning paths this year were Collaboration and S&OP, Distribution and Logistics Insights, Operations Management, Risk and Resiliency, Supply Chain Analytics, Supply Chain Leadership and Supply Chain Strategy.  The topics in all the sessions were relevant, interesting, and timely.  It was challenging to select a session to attend because of multiple offerings being scheduled at the same time.  Sessions are designed to be engaging, and the presenters were experienced and knowledgeable.  During the APICS Conference, there were networking lunches and receptions permitting attendee time away from the session to network and meet new people.  Finally, there was an Expo Hall set-up with exhibitors featuring education, technologies, supply chain solutions, and information regarding APICS membership and certifications.  American Public University was an exhibitor at the conference this year highlighting their program offerings and certificates.

With the APICS 2016 Conference in Washington, for the first time in a couple of decades, it gave the opportunity for Federal Government and our military to send attendees. One session in particular which attracted this demographic was  "Humanitarian Logistics and the Role of the Department of Defense."   Irvin Varkonyi, CSCP, and part-time professor in Transportation and Logistics Management at APU/AMU, and Navy Cmdr. (ret) Jeffrey Brown were the session presenters. Vendors for state, local, and Federal Emergency Management organizations also attended as did the collaborative aid organization, ALAN (American Logistics Aid Network.) ALAN is composed of several associations including APICS and CSCMP.  A key takeaway was the incorporation of best practices to deliver humanitarian aid and how DoD organizations, such as the US Northern Command, have organized itself to support emergency management organizations. The "Humanitarian Logistics and the Role of the Department of Defense" presentation was a timely session given APICS' new credential, Certified in Logistics, Transportation, and Distribution (CLTD).  The new certification can provide and validate logistics capabilities for both commercial and public sector logisticians.

Dr. Karen Pentz, a part-time faculty in Transportation and Logistics Management, was also in attendance at the APICS Conference.  Karen enjoys the conference content as well as the networking capabilities. One of the interesting aspects of the conference is the ability to focus on a particular certificate program offered through APICS.  This year Karen's focus was on finishing the required electives for the S&OP and the Risk Management certificates. To do so, she attended some fascinating presentations over the three days offered by industry thought leaders. Karen stated, "APICS does a great job of choosing presentations that cover a specific path, but that also offer a variety of thoughts and aspects of the same or a similar topic."

The APICS Conference is beneficial as it allows for its members to enhance their membership by meeting new people, discussing best practices, and investigating new and emerging trends in the industry. The educational sessions are valuable, and some sessions (depending on topic) count as electives toward educational certificates offered through APICS.  

The future impact of autonomous ships on the maritime industry

By Dr. Robert L. Gordon | 09/30/2016 | 8:19 AM


Recently, Rolls Royce along with the government of Finland has announced that they would have the technology available to operate autonomous ships by 2025.  Although this is still nine years away, a shift like this can fundamentally change shipping as we know it today.  With technology, this means that even the largest most complex cargo vessels could operate with much smaller crews (or no crew at all) within a decade.  Consider the ramifications of this shift.

First, the human costs of operating the ship are often one of the highest costs.  Second, many ships operate under flags of convenience to hire an international crew.  Third, human error has been cited as the most common reason for shipping incidents.

Fully autonomous ships could technically operate without a crew and could sail between ports.  Ship technology already monitors all other targets in the area and so with systems to keep distance between vessels, there is a strong case to move to more technology with smaller crews.  This shift could drastically reduce the overhead costs for a vessel, allowing crew costs to drop down in costs, making it more attractive to maintain more national ships than international ships.  Even a minimal crew of three watch keepers and a cook would be substantially less than current ship manning costs.  This cost reduction would certainly change what nationality of the crew would be hired.

The flag of convenience benefit is lower taxes and the hiring of an international crew, which can be substantially less expensive.  Although the tax benefit would remain, the cost of crewing would still drop and offer the owner significant cost savings, which in turn can reduce cargo costs, given fully autonomous ships.  Even smaller crews would offer a significant reduction in labor costs, making autonomous ships more attractive to ship owners.  Another area of cost savings would come from insurance rates.  Smaller crews mean fewer potential legal labor disputes as well as increased technology and operations would reduce incidents and injuries.  Avoiding expensive legal settlements can be a boon to companies that operate in litigious societies like in the U.S.

Human error and shipping incidents have had a long association.  Although in many cases, there were multiple human errors that resulted in an incident or casualty, automation can help break this chain of casualty and avoid incidents.  Note that many ships already operate with an unattended machinery space, so there is already a case to avoid human intervention and monitoring. 

All of these upcoming factors could result in a shift in flag state of new or updated ships than embrace fully autonomous operation.  It is clear that new regulations must be developed and created and a flag state that swiftly moves can offer greater incentives to owners that embrace this technology.  Furthermore, operators that track and utilize this technology can build the insurance case that their operations are clearly safer and have fewer injuries and incidents than others. 

Ultimately, the objective is to move to lower costs of logistics and more efficient operations.  However, there will be a period of transition as society becomes more accepting of this technology.  Some people state that society will not accept it and that the change will never happen.  For those people, I remind them of this interesting story.   The modern elevator was initially operated and controlled by a person.  Elevator operators were common sights in tall buildings until around 1945.  Building owners for primarily cost reasons moved to fully autonomous elevators.  The public accepted the change and building owners moved swiftly to replace old elevators with autonomous elevators.    I suspect that society will do the same with regards to autonomous ships.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Dr. Robert Lee Gordon

Dr. Robert Lee Gordon

Dr. Robert Lee Gordon is program director of the Reverse Logistics department at American Public University. Dr. Gordon has over twenty-five years of professional experience in supply chain management and human resources. He holds a Doctorate of Management and Organizational Leadership and a Masters of Business Administration from the University of Phoenix, as well earning a Bachelor of Arts degree in History from UCLA. Dr. Gordon has spent more than 14 years teaching reverse logistics, transportation, project management, and human resources. He has published articles on reverse logistics; supply chain management; project management; human resources; education, and complexity. He has also published four books on Reverse Logistics Management; Complexity and Project Management; Virtual Project Management Organizations, and Successful Program Management..

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