Sunday, September 28, 2014

Smart Phones on Wheels

          Technological innovation has always been a driving force in supply chain management. Typically, businesses expect technological innovations to “bring them larger market opportunities and bigger profits” (Rettig). Recently, companies have embraced smart technology to streamline online web orders, delivery, billing and customer service. Currently, smart vehicles are at the cutting edge of smart technology.

In its latest issue of “Technology Quarterly,” researchers at The Economist investigate the cutting-edge phenomenon of driverless cars. Specifically, the article, “Smartphones on Wheels,” discusses the technology that would enable driverless cars goods as public goods. In a society dominated by driverless vehicles, individuals simply “summon” a vehicle when necessary. After one individual arrives at his/her destination, the vehicle heads off to its next client. In fact, glimpses of this new technology are appearing in today’s society. For example, Google recently created a bubble-shaped prototype of an autonomous car has been running Toyotas adapted for driverless travel on Highway 101 in Silicon Valley for the past few years.

Similarly, approximately 3,000 drivers in Ann Arbor, Michigan have had wireless Internet connections fitted to their cars. These vehicles are referred to as “connected cars.” These connections can be used to feed information to and from other vehicles. For example, the system can ward a driver if there is a chance of collision with an oncoming vehicle, to help reduce future accidents. 

            The establishment of the connected car represents the coming together of communications technologies, information systems and safety devices to provide vehicles with an increasing level of sophistication and automation. However, research involving smart cars has been primarily direct towards individual private consumers. To me, it seems like this technology offers potential for innovation in the world of supply chain management. However, many American’s remain unaware of the full potential for this technology. For example, based on a 2014 Wall Street Journal Survey, almost 80% of those surveyed had heard of the idea of smart car technology before (Ausick). In order to successfully integrate smart technology into the business world, businesses will have avoid the initial mistakes of Ariba by fully committing to integrating the new technology.

As a starting point, William Cassidy examines the role of technology as it relates to Home Depot’s supply chain and inventory strategies in article, “Home Depot’s New Strategy tied to E-Commerce Growth.” According to Cassidy, Home Depot has worked to increase overall sales through the development of a recent e-commerce project and in-store mobile app. Home Depot is working to capitalize on recent innovations in technology by blurring the lines between online and in-store experiences. By allowing customers to purchase items directly online, the company’s overall transportation costs have declined in recent years. However, they have not considered making any changes to actual transportation methods. If Home Depot is able to eventually integrate smart car technology into their supply chains, they will be able to reduce costs even further. Specifically, they will reduce costs associated with transportation workers and vehicle safety initiatives.

            Looking forward, I wonder if the technology of smart cars can be applied to other vehicles. Is there potential for smart-trains or smart-ships in the future? If so, how will this apply supply chain management?

            Additionally, the creation of smart cars implies that humans as drivers become obsolete. How will the overall economic conditions and un-employment rates be affected if smart cars replace human drivers as mechanisms for moving inventory?


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