The Changing Shape of the Supply Chain

Some time ago, I was stuck in a meeting. Not exactly The Meeting From Hell but definitely somewhere on the outskirts, like maybe Erebus, or Tartarus. Naturally enough, I decided to use the time more meaningfully, and began doodling.

Procurement, operations, distribution: those are the three elements of a supply chain strategy, according to what we tell our students.

I drew them vertically, for a change. I’m trying to get away from showing supply chains as going from left to right, but it’s a difficult habit to break: I spent years simulating supply chains, and the software packages we used were all designed to show products as flowing from left to right – a paradigm that doesn’t do us much good, really. Workpieces flowing from top to bottom fit the language of the supply chain much better: “upstream” and “downstream”, vertical integration and so on.

Following the “big three” I added an after-sales service component. Many modern supply chains include this, and thus far we’re not looking at anything that doesn’t appear in Porter’s Value Chain… if stood on its pointy tip. (Again, getting away from the left-to-right paradigm.)

So we’ve got a natural flow: gravity-assisted through procurement, operations, distribution and after-sales service. Next, I left a gap, which I called “uncontrolled life”. This represents the part of the life of a product where it has passed beyond any formal support, but remains useful to somebody. Like a car that has passed to its second or third owner, who decides that the declining value of the vehicle means it no longer deserves the premium demanded by the dealership: an independent garage works out cheaper on a per-hour basis and may provide access to ‘clone’ or salvaged parts.

Sooner or later, though, a product becomes too broken or too obsolete to be of use. It reaches the end of its life… but the supply chain may feature an ‘end of life’ phase where components or materials are salvaged. This is a growth area – not least because of legislation that establishes extended producer responsibility.

That first diagram offers a summary of the present-day position, perhaps, but it wasn’t always this way. For example, after-sales service is a relatively new concept that could only really take off once standardisation made it possible to sell spare parts.

I started wondering about how things have changed over the years (yes, the meeting I was in offered ample time for such reflections…) and by the time I’d thought it through I had a set of distinct ages illustrated, in a not-very-scientific analysis of the relative importance of the different components of the supply chain. You can see a neat version of my next doodle here:

Supply Chain Trends. Maybe.

Before humans, there was procurement and use – the way a chimp might find and keep a stone, so as to crack nuts. In a few cases, there may have been simple operations too, such as stripping the leaves and bark off a twig before it’s used to fish termites out of their mound.

Termites – it’s what’s for dinner. [Photo: BBC / Emma Napper]

In prehistory (defined as human activity after the invention of stone tools, but before the development of writing) we added distribution: the idea that you might share something with somebody else. Also, the range of operations that might be performed is expanded by human ingenuity: we were shaping tools, making mud bricks, curing hides and so on. At this point, ’end of life’ doesn’t feature at all; you just leave waste and worn out items wherever they happen to fall. Moving on into ancient history, this changes. For the first time, some forms of waste have value. If a broken item is made from copper or bronze it can be melted down and made into something else: recycling has arrived. Distribution also increases in importance in this era, for example Bronze Age Cyprus shipping copper to the Near East and Egypt, and returning with commodities such as papyrus and wool.

Technologies change, and empires rise and fall, but the relative importance of procurement, operations and so on doesn’t appear to change until the industrial revolution, when operations become particularly significant. For the first time, having an innovative means of production is more important than having access to the raw materials. (These are accessed more readily as a result of advancements in trade and navigation.)

I decided that mass production deserved to be considered as an era in its own right, beginning about a century ago. Again, we see a growth in the relative importance of operations – plus the arrival of the service component, which begins a squeeze on the uncontrolled life element.

In the information age – our own era – operations has declined in importance, because there’s more outsourcing (procurement increases in importance) and production increasingly involves alliances. Similarly, responsibility for the distribution function is shared with third-party logistics (3PL) partners. Growth in services is observed as companies look to establish a continuing revenue stream, and there is an increased focus on the end-of-life, the two combining to further limit the uncontrolled life element.

And what does the future hold? I think it’s reasonable to assume that end-of-life issues will continue to increase in importance. Outsourcing will grow; alliances and partnerships of all kinds, too – and the uncontrolled life of products will be further squeezed via business models based on leasing rather than outright ownership.

I’m not saying I have this 100% right, and the situation pertaining in a specific industry may be different… but it’s interesting to see how things have changed, isn’t it?

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Cutty Sark [photo: Krzysztof Belczyński]

A Little Less Conservation, a Little More Action…

In Greenwich, London, the Cutty Sark is a popular tourist attraction. A British merchant ship, she’s a rare survivor from a vanished, glamorous age of commerce by sail.

Exceptionally sleek and skilfully constructed, it’s a shame to have to report that this beautiful ship was just about obsolete from the outset: she was launched in November 1869… the same month that the Suez Canal was completed, changing the geography of global trade forever.

As a clipper, Cutty Sark was designed for the tea trade, then a highly competitive annual race (with cargo) from China to London. The journey involved sailing around the southern tip of Africa and steering a route that would make the most of the prevailing winds. Cutty Sark employed composite construction (wooden planking over an iron frame, all sheathed in Muntz metal) to produce an elegant, streamlined hull that made her one of the fastest ships of her time. It’s worth noting that she isn’t just a vehicle that used to be a part of the global supply network, but also a product of it: British wrought iron frames and metal sheeting, American rock elm, East India teak… all assembled on the Clyde.

Fast sailing over long distances (up to 363 nautical miles or 672 km in a day) was no longer confined to clippers, sadly. The SS Agamemnon had already been in use for three years, demonstrating the advantages of a high-pressure boiler and a compound steam engine – and when the Suez Canal opened it offered a 6,100 km shortcut that was largely unsuited to sailing vessels. The days of the tea clipper were numbered.

Richard, and some faux tea chests in the hold of the Cutty Sark

Long before the standard intermodal freight container, there were tea chests. A team of Chinese stevedores could load a ship with up to 10,000 of them in 2–3 days, and on her first return voyage, Cutty Sark brought 1,305,812 pounds (592 tonnes) of tea from Shanghai. Since there was no way to return them once empty, tea chests found all kinds of secondary uses in the UK, Australia and New Zealand, becoming storage boxes, furniture and even musical instruments.

Eight times Cutty Sark sailed in the tea season, one of a dwindling number of tea clippers. In December 1877 nobody in Shanghai was prepared to entrust their cargo of tea to a mere sailing ship (insurance premiums for steamships were a lot lower) and this marked the end of sail in the tea trade. Cutty Sark and the other clippers had to change with the times: they were modified to carry a simpler, smaller arrangement of sails that reduced crewing requirements and maintenance costs, and they carried new cargoes on new routes.

Reducing manning levels in an effort to cut costs… a reaction to hard times that shipping lines still employ today. Another tactic that we see employed almost universally today is slow steaming: reducing speed in order to save fuel. It’s a good response to industry overcapacity and the high price of fuel because reducing speed by about a third can save thousands of tonnes of fuel oil… but it’s amusing to note that this has reduced modern commerce to a speed that Cutty Sark could have bettered on a good day – without spending a penny on fuel, and without producing any emissions!

When the tea trade changed to exclude clippers, Cutty Sark began to carry wool from Australia. In the 1883–1884 season, she made a journey from Australia to London in 83 days, 25 days ahead of any other vessel. In 1885 Captain Richard Woodget managed to get the time down to 73 days. Cutty Sark dominated the wool trade for a decade… until the steamships moved in on that commodity as well. In 1895 she was sold to the Portuguese firm Joaquim Antunes Ferreira, and renamed Ferreira as a result. She traded general cargoes here and there, and by 1922 she was the last clipper still operating. A spell as a cadet training ship followed, and when she was no longer needed in that role she was installed in a purpose-built dry dock in Greenwich, becoming a museum ship in the 1950s.

After decades of sitting on her keel – an unnatural position that caused a certain amount of sagging – came an extensive conservation project, beginning in 2006. It was a textbook case of poor project management, featuring cost over-runs, poor record-keeping and questionable security arrangements… punctuated by a terrible fire in May 2007 that might have destroyed the whole ship.

Cutty Sark fire of 2007

Cutty Sark is part of the National Historic Fleet, making her equivalent to a Grade 1 Listed Building: destruction by fire is not an option. Fortunately, much of the fabric of the ship had already been taken away for conservation   [photo: ITV.com]

In April 2012, Cutty Sark reopened after years of hard work. The most noticeable change is to the dry dock. In my childhood it was a simple pit where wind-blown crisp packets would tend to gather, but now it’s a glazed space, the roof appearing to be an ocean swell that the ship is riding. In the new scheme, Cutty Sark ‘sails’ some three metres above, allowing visitors a good look at her most important feature: that beautiful, streamlined hull.

Copper/zinc sheeting on the restored Cutty Sark

Visitors can now walk beneath Cutty Sark’s hull, clad in a gleaming copper/zinc alloy that’s a close match to the original Muntz metal.

The end result of Cutty Sark’s renovation is controversial. The Victorian Society described it as a misguided attempt to fit the corporate hospitality market, and Building Design magazine named it the worst new building in 2012. (The ‘anti’ camp were hoping for a restoration that would have left Cutty Sark seaworthy.) Yachting World were more appreciative, though, describing the end result as sensational.

Cutty Sark will never again be able to return to the sea, but she still formed a focus for the ceremonies that preceded the Tall Ships race of 2017. At the Sailors’ Ball on Good Friday, dancers were dressed in their best vintage sailor chic, and after champagne and fireworks on deck, I enjoyed the opportunity to explore Cutty Sark without crowds, before we went below to dance. As the band played ‘Somewhere Beyond the Sea’, I felt as if I’d become one of the denizens of Rapture, the doomed city beneath the waves in the BioShock games: even so, count me among the people who approve of the Cutty Sark in her new role. For a ship that never quite worked out as planned, she has a surprising amount to teach us.

A dance lesson, given in the space beneath Cutty Sark's Hull

Dancing the night away at the Sailors’ Ball

Staying Up Is Hard to Do

Capacify has introduced readers to some distinctly odd forms of transport over the years, from missile mail to quick-turnaround aircraft with swappable passenger pods; from seagoing trams to transporter bridges. I like to bring you the good, the bad and the ugly of the logistics world, and today is no exception as we look at Brennan’s Gyrocar: monorail, the hard way.

When you design a train to run on a single rail, you’ve got inherent instability to deal with. One solution is to hang the cars beneath the track, as seen in the venerable Wuppertal Suspension Railway, or the H-Bahn at Düsseldorf International Airport. (There are others.) If you don’t mind supporting the whole length of your track on a series of elaborate pillars, this solution is fine.

Wuppertal suspension railway

Looking for a townhouse with a view of lots of girders? Look no further than Wuppertal!

If hanging down from an overhead track doesn’t appeal, another way to achieve stability is by straddling the guideway and using additional wheels that don’t bear the weight of the vehicle, but keep it steady. The Lartigue Monorail system featured a pair of guide rails on each side for just this purpose. The top rail was supported by a line of waist-high trestles that marched across the countryside and made it just about impossible to construct any sort of level crossing, so you’ve got a fairly impractical mode of transport here.

The Lartigue Monorail, Ballybunion

The Lartigue Monorail, Ballybunion

Strange but true: freight cars on the Lartigue Monorail were split down the middle like panniers, and loads had to be balanced. A farmer taking a cow to market would have to balance her with two calves, then split up the calves and put one on each side for the return journey. Nothing says “technical limitations” like having to give livestock an entirely needless tour of the countryside, but the Lartigue Monorail carried passengers, freight and bemused cattle between Listowel and Ballybunion from 1888 to 1924.

Image from the Simpsons TV show reporting mono = one, and rail = rail

With me so far?         [image: Fox Broadcasting]

Modern straddling monorails are in a sense descended from the Lartigue system, using guide wheels to ensure they stay upright, with a certain amount of friction and wear-and-tear as you might expect. So far so ordinary… but there is another way.

Why not gyro-stabilise your monorail, to keep it atop a much less substantial rail? That’s what Louis Brennan (1852–1932) proposed. Not just to keep it upright, either: if you’re clever (and Brennan clearly was) you can use the gyroscopic force of precession in your favour. He patented an arrangement whereby a pair of contra-rotating gyroscopes helped his machine to balance, and to return to the vertical when subjected to a load.

When it encounters a curve, Brennan’s patented gyro mechanism causes the car to lean into the bend, just as a cyclist would. In effect, to those on board the train, the banked turn wouldn’t feel like a turn at all: their weight would keep on pressing directly down through the floor of the vehicle. That offers a considerable improvement over conventional railways, which in some cases have to feature a bend radius as large as 7km, in order to keep the passengers comfortable. Brennan used to give demonstrations in which a scale model would make its way along a tortuously twisted piece of gas pipe, as described by Cleveland Moffett, a journalist for Munsey’s Magazine:

“As she comes closer we hear the low hum of her hidden gyroscopes (they will be quite noiseless in the larger model), and are struck by the car’s remarkable width in proportion to her length. She suggests a trim little ferry-boat, and is utterly unlike any known form of railway car. Now the track curves sharply to the right; she takes the turn with the greatest ease, and leans slightly toward the curve. Now the track turns again, and she glides behind the bushes. Coming out on the other side, she enters bravely on the approach to a mono-rail suspension-bridge, a wire rope stretched over the valley that falls away between two small hills — seventy-odd feet of tight-rope-walking for the little car. Straight across she runs from side to side, — no wavering, no tipping, — and then straight back again as the assistant reverses her; then out to the middle of the rope, where they stop her, and there she stands quite still and true, while the gyroscopes hold her. This is something never yet seen in the world — a mass of dead matter, weighing as much as a man, balancing itself unaided on a wire!”

Child riding in Brennan's model gryocar

History does not record how much pocket money Brennan had to pay his children for their part in monorail demonstrations

I found that old scale model in the chaotic part of the National Railway Museum that they call the Warehouse. Somewhat neglected and missing its cab, it alerted me to the existence of this strange mode of transport.

Brennan Gyrocar model

Detail of the Brennan Gyrocar model at the National Railway Museum [image: Stephen Holland]

Brennan imagined his full-scale vehicles would cross gorges on a ‘bridge’ consisting of a single steel cable, and ascend gradients of up to one in five. The guideway upon which it ran was simple – just a round ‘pipe’ shape on sleepers, far cheaper that the elaborate Wuppertal or Lartigue types. This will have been what attracted the British Army Council, the Durbar of Kashmir and the India Office to the idea, and they all reached for their chequebooks.

Brennan’s Gyrocar at the Japan-British Exhibition of 1910

Brennan’s Gyrocar at the Japan-British Exhibition of 1910

A full-size prototype railcar (12.2m by 3m) was completed and running by October 1909, and it was first shown to the public at the Japan-British Exhibition of 1910. The monorail car took up to fifty passengers at a time on a short ride. Among those who tried it was Winston Churchill, MP, who would have been around 36 at the time. The gyro monorail had proved itself a workable technology… but there the story ends: no commercial system based on the technology would appear in the years that followed. Still, Brennan’s gyrocar had been demonstrated something like 63 years before the Advanced Passenger Train prototype rolled out – another tilting train concept meant to reconcile the conflicting requirements of curves, speed, and passengers’ comfort. Despite running on conventional tracks, the newer tilting train was plagued by technical troubles, and was withdrawn from service (although the Italians later managed to make the concept work, and called it the Pendolino).

For the gyro monorail, some problems clearly remain. For one thing, you can’t detect the presence of a vehicle on the track (for safety and signalling purposes) by the usual means of having the train itself complete a circuit, so an alternative way to ensure the line is clear would have to be found. (Hardly an insurmountable task nowadays.)

A bigger problem, of course, is that when your gyroscopes stop spinning, the gyrocar ceases to balance. This might seem to be a little bit worrying if your Brennan gyro train is on an elevated section, or perhaps crossing one of Brennan’s single-wire minimalist suspension bridges over a gorge. Actually, it’s not necessarily all that bad. Travelling on a straight section (such as that bridge) a single working gyro would be enough to keep a car upright: it’s only on curves where you need the contra-rotating pair in order to balance correctly. Also, gyroscopes that lose power take quite a while to spin down to nothing, so a gyrotrain driver with instrumentation ought to be able to take corrective action in good time.

The most significant limitation of the gyrocar technology isn’t apparent from the demonstrator on which our future Prime Minister rode. All the gyrocars ever demonstrated have been exactly that: cars, and not trains. Brennan’s paired gyroscope arrangement has to feature in every section of the train, with no such thing as a passive ‘trailer’ unit, since even if it doesn’t provide traction the coach or wagon must still feature powered gyros, or it won’t be able to balance. The rolling stock for such a transport network would cost a fortune.

But you know what? I’d love to see one.

The Drones are Coming

It had to happen, sooner or later: last week Amazon made their first delivery by drone. They’ve been testing the potential of autonomous rotorcraft for more than three years, so it was about time that they started making flying deliveries – it’s something that Santa Claus has been doing since 1821, after all. Let’s be clear, though: the Amazon customer in question lived close to the fulfilment centre, in the wilds of Cambridgeshire. He’s one of exactly two customers who are currently eligible for the service, although Amazon plan to roll the ‘Prime Air’ service out to “dozens” of customers in the future.

They’re wise to experiment in the flatlands of Cambridgeshire, where there’s precious little in the way of geography to challenge the algorithm that steers the drone, and relatively few people around who might sue if a drone and its 2.7kg payload fell on them.

Amazon Prime Air drone

Amazon Prime Air – coming soon, to a back garden near you?

As a proof of concept, consider it a genuine milestone. People can now receive manna (well, popcorn) from the heavens. In daylight. When winds are low. When it isn’t raining. Or snowy, or icy, or foggy. Assuming, furthermore, that you don’t live in a place where a cable such as a telephone wire passes over your garden. I suppose that trees and birds might pose a problem, too – not to mention thieves who could try to bring down a drone as a kind of ‘lucky dip’ at its unknown contents.

Avoiding the perils and complexities of aerial navigation, but perhaps more at risk of theft, is the (apparently nameless) robot demonstrated last year by Starship Technologies – a company set up by Skype founders Ahti Heinla and Janus Friis. It operates at street level, toiling along at four miles an hour with up to 18kg of packages on board. It’s not intended to make long-distance deliveries, but to cover the final mile after a ‘portable warehouse’ is stocked up and then parked in your neighbourhood… for a claimed $1 per delivery (which is to say around a fifteenth of the cost of a person in a van).

Unlike the Amazon drone, which drops off its package and immediately heads home, Starship Technologies appear to have designed their drone as a mobile box that opens when it meets the designated recipient. Not so great if you’re not home: the robot doesn’t appear to have a mechanism that would allow it to offload its cargo at your premises.

That a package might be left unattended in my garden is nothing new: the delivery drivers that come to my house already leave my goods in a variety of random places, including the doorstep, any of three wheelie-bins, my neighbour’s garage, my son’s sandpit, and on or under the garden furniture. What happens in high density urban areas, though?

One suggestion is that we should all have a giant mailbox for parcels. Hippo Dropbox, for example: a secure box at your address where a delivery driver places the package inside, and the door locks as soon as it’s closed. (A barcode on the inside of the door can be scanned, this constituting a signature where required.) That’s a neat idea, except that at this time of year I’m sometimes getting five parcel deliveries a day – some of them surprise gifts. I foresee the first driver of the day using the Hippo box, secure in the knowledge that he’s done the right thing… but this leaves the box locked. The high-value item that arrives next can’t go in the box, per the delivery instructions, and the barcode can’t be scanned in lieu of a signature. That item must go back to the depot, journey wasted, perhaps several days running.

While logistics textbooks often discuss the ‘final mile’, it appears that the final few metres might be the toughest of all to crack.

Hippo Dropbox. The standard size is £235.00 with free delivery (but where will they put it?)

Hippo Dropbox. The standard size is £235.00 with free delivery (but where will they put it?)

One problem that the flying drone must overcome is that a map reference alone does not identify a household, because in many cases people share a building. Where do you drop a parcel, when your customers live in high-rise flats? Bizarrely, if the future is delivery by air, we would be entering a time where the logistics of home shopping become simpler for those in rural areas – but that’s no good because over 54% of the world’s population live in urban areas (according to a 2014 report from the UN, with a rise to 66% by 2050 anticipated).

I’m not anti-drone as such, and using them to deliver packages is probably a better application than bouncing one off the Flying Scotsman, but there are practicalities to consider.

What’s the environmental impact of a drone? It’s clearly going to consume a lot of electricity because those quad-rotor aircraft expend most of their energy simply in staying up, with forward motion being a relatively minor component of the vector. Maybe you can install a solar farm, or claim your electricity comes on a green tariff such as nuclear. Well, maybe… but electricity is a commodity and when you’re using ‘green’ energy for one thing, it means somebody elsewhere is having their needs met with fossil fuels, so I don’t buy that. There’s also the question of noise, and some people might raise safety concerns. Not an issue while the drones are being used experimentally (or as a marketing gimmick), but what if there were thousands of the things buzzing about?

A question that we have to ask ourselves is, do we really need to receive things in such a hurry? Many businesses are still grappling with the implications of next-day delivery, and those who have made that particular leap have in some cases moved on to same-day delivery. Delivery within two hours. Delivery within the hour. And now… what?

I’m concerned because it makes me think of the Stanford marshmallow experiment, where developmental psychologists assess the maturity of a child based on his or her ability to resist the temptation of an immediate reward. Children who can’t resist the temptation to have it now are scientifically proven to be more prone to impulsivity, aggressiveness and hyperactivity. As adults, they’re more likely to abuse drugs and other substances, more likely to get divorced, and more likely to be overweight. And now we’re designing logistics systems to respond to the demand for instant gratification. We’re rewarding and reinforcing the idea that clicking the button delivers satisfaction… even though we know that there’s this thing called climate change, that it’s man-made and that it’s accelerating. You can have it now, or you can be ‘green’. Which will you choose?

What a curious age we live in!

On a more worthy note, experiments in Malawi have seen a drone used to transport blood samples to a clinic where HIV testing can be performed. In a country where the roads are bad, sending blood samples via motorcycle courier is expensive, so batching together a large number of samples is the norm. This can result in dangerous delays, with UNICEF reporting that it can take as long as eleven days for blood samples to reach a laboratory. Matternet believe that their drones could be the answer.

Blood samples en-route to the laboratory, as the crow flies.

Blood samples en-route to the laboratory, as the crow flies.

The Gaseous State

The question that I’ve been pondering this week: what if existing models of the supply chain are outdated, and a whole new dimension is required? We speak of workflow, liquidity, pooling of resources… but what if commerce no longer resembles a liquid, but a gas?

A liquid sloshes about, and finds its lowest possible level. We’ve seen that: work gravitates to the place where it’s cheapest (and where regulation and taxation are the least onerous)… but that’s only half the story. A gas expands until it fills every nook and cranny: and it keeps on pushing until the pressure is equal throughout the system.

This is the evolutionary change in the modern-day supply chain. From solid (we expect things to stay put, and we expect to do things the way we’ve always done them) to liquid (everything takes the path of least resistance and flows downhill) to gas, and the ‘new normal’ that everything is everywhere. Instant gratification, same-day delivery, and so on.

The future is... more energetic.

The future is… more energetic.

The change isn’t just a new challenge wrought by new expectations on the demand side, though: the fulfilment paradigm has also changed. New actors participate in the supply chain now, while old ones take on different and expanded roles.

The service sector is being shaken up by disruptive changes. People with a spare room in their home now use Airbnb to compete directly with the conventional providers of short-stay accommodation. People with a vehicle and time on their hands sign up with Uber, offering a service comparable to taxis, on a casual basis.

Manufacturing businesses aren’t safe from disruption of this kind. What’s to stop a manufacturer from selling idle machine time to anybody that can benefit from it? Twenty-five years ago, Prestige Garden Furniture of Bolton were making parts for the Jaguar cars that competed at Le Mans… with good data exchange formats and a growing list of successful collaborations, this sort of thing is only going to increase. Add in ‘the cloud’ and the notion that businesses can tender for work on a case-by-case basis, and the commercial landscape begins to look very different.

On the retail side, who’s to say that the next thing you buy will come from a conventional source? In some applications, a ‘previously enjoyed’ product might be just what the customer needs, simultaneously shielding them from tax and depreciation, and allowing them to feel better about their environmental impact… and in eBay citizens (and businesses) have an excellent marketplace in which to buy or sell with some confidence that prices are fair.

Finance has gone crowdsourced, too. Where entrepreneurs once had to meet with the bank manager, Kickstarter offers a way to fund everything from movies to gadgets, while peer-to-peer loans allow borrowers access to credit and give savers a decent return on investment… with no high street bank in sight.

This is the all-pervasive commerce of the future: where a vastly expanded pool of casual or unconventional actors provide additional capability. Ignore them all and go with old-style formal relationships if you must, but understand that there are a whole lot of other people out there who want to get involved – and might end up working for the opposition. Done well, the coordination of a set of such contributions could be a powerful strategic differentiator because there’s an army of people who could play a part, in every city.

What triggered the change that turned the liquid of old-style commerce into an all-pervasive gas?

Microwaves.

The cellphone changed everything. The Internet made a big change, for sure, but it was mobile that really let the genie out of the bottle. Once calls were make to a person rather than a place, a plumber no longer needed a relative staying at home to take calls and make appointments. Cutting out the ‘receptionist-at-home’ role (and there must have been many thousands of such people) meant they could take on paid work elsewhere. Mobile ’phones also meant a farmer would know if today was the right day to harvest his vegetable crop – and could perhaps secure a price with a buyer, instead of being at the mercy of a middleman. That same mobile telephone allows ride-sharing, live translation services, paperless ticketing and much more.

In my family, when we send holiday postcards, we don’t start by buying a postcard: we use our own photo, uploaded with an accompanying message to a print-on-demand firm who create the card and put it straight into the post. In effect we have become actors in our own supply chain, replacing the professional photographer who formerly earned royalties on their images. We’ve eliminated the foreign leg of the postal service, too: never again will we queue in the bureau de poste and request “un timbre pour l’Angleterre”… and the likelihood that the resulting card will be delivered by the Royal Mail is declining, too: there are so many others who could bid for the contract.

The world has changed, and the lesson to be learned here is not to be the old-style incumbent, selling pre-printed postcards in a digital age. Like any paradigm shift, there will be winners and losers, and the first step towards becoming a winner is to be aware that the shift is underway. The future is digital, no doubt, but it’s also amorphous, chaotic… and gaseous.

The Place Where an Ape is a Bee

We just had a holiday in Italy, where one of the things we always do is play “Spot the Ape”. If you’re familiar with Italy you will have seen the tiny three-wheeled vans and pickups made by Piaggio, and if you’re familiar with Italian you’re probably itching to tell me that it’s not an ape, but an apé. (Tell that to Wikipedia…)

It’s a key difference, because in Italian ‘apé’ means ‘bee’. These funny little vehicles were the worker-bees that laboured to reconstruct Italy’s postwar economy at a time when few could afford a conventional commercial vehicle. The famous Vespa (‘wasp’) scooter had arrived in 1946, an innovative mobility solution for a country with finances that were every bit as ruinous as the roads: a year later, aeronautical engineer Corradino D’Ascanio (1891–1981) adapted his Vespa, giving it two rear wheels and a box for cargo. The Apé was born.

Early Apé with no cab, seen in a museum.

In the wild, Apés never look as clean nor as well cared for. [Image: Flickr user “monkeyhel”]

The Apé was just about perfect for its time and place. In the 50cc variant, the Apé didn’t need a registration number and driving one didn’t require a license – rather like the arrangements in France with the VSP or voiture sans permis rules for microcars. Even the most powerful Apés in the early years had only a 125cc engine so it was never going to set any speed records, but low gearing made it ideal for hauling loads up the steep streets found in so many Italian hilltop towns. Its small size made it perfect for negotiating narrow lanes and tight bends, and for parking in awkward spots while making deliveries.

Apé Pentaro with a baby elephant on board.

If three wheels wasn’t enough for you, there was the Pentaro variant…

1956 was a significant year for the Apé. The model C finally lost its Vespa-style saddle and acquired a car-like seat. They also offered an Apé with an enclosed cab for the first time, and an electric starter was an option. (Hold out until 1964 and you could even get one with a heater in the cab. To this day, a steering wheel remains an optional extra: most have handlebars.) The vehicle was diverging from its Vespa heritage, but it remained an affordable alternative to a conventional van. People did all kinds of quirky things with the Apé… and they still do. If you see one in the UK, the driver is almost certainly selling artisan coffee – but in Italy they were used by people in trades of all kinds.

A 1963 model Apé

A 1963 model Apé. What’s not to love?

The Apé is being made under license in India; I’ve seen them used as airport runabouts in Dar Es Salaam, and they’re popular in Portugal, too. Although auto rickshaws (‘tuk-tuks’) are found in dozens of countries, most aren’t Apés, and are nothing to do with Italy. Even so, these three-wheelers are a practical format that won’t go away.

It appears that the Apé is becoming a rarity in modern Italy, and that’s a shame for those of us that always look out for them. (Bonus points for an Apé with two people squeezed into the cab together.) The disappearance of the Apé is a sign of progress, of a kind: people can afford four wheels instead of three, and the traffic moves a bit faster than it used to, at least in between towns: in urban areas we all crawl at the same speed. I can’t help wondering if there isn’t an Apé-shaped space in our modern logistics networks. Any of the light vans that call at my house to deliver small packages could be replaced with an Apé. (Preferably an electric-powered Apé that departs with a hum instead of a puff of exhaust smoke, but… whatever.) So many of the things that get hauled that final mile are lightweight packages: it’s absurd, but instead of picking things up while I’m at the supermarket, I save money by getting all my toiletries from an online retailer – despite the obvious cost of delivery to my door. Some people are doing the same thing with groceries, and it’s only a matter of time before most of us decide that it’s cheaper to cut Sainsbury’s (etc.) out of the loop.

And then? Perhaps the world is ready for a resurgence of the Apé.

Ape panel van

Cyber Mischief and Cyber Attack

It’s recently been revealed that Nissan’s small electric car, the Leaf, is vulnerable to computer hackers. Not very vulnerable perhaps, but a prankster only needs the VIN number of the car (displayed clearly through the windscreen on most vehicles) to call up your vehicle and monkey with its climate control, using nothing more than a web browser. They can also access information about recent journeys.

Having your heating or air-conditioning switched on while the car is parked up doesn’t sound like much of a problem, but these are electric cars: their range is limited at the best of times, and the last thing you need is somebody running down your battery for laughs.

It was only a couple of weeks ago that a supermarket cashier was cheerfully telling me that his Leaf could be programmed so that it’s nice and warm when his shift finishes. It made me think, wow… maybe these electric cars are beginning to carve out a niche for themselves. Having the vehicle warmed up and ready to go is a nice little gimmick that my humble diesel could never manage.

It’s around a hundred years since cars first acquired circuitry. Before that, you had to make to with hot tube ignition, and later a magneto – both dependent upon enthusiastic work with a starting handle. Then along came the 1912 model Cadillac, with its electric starter. Everything changed once cars had a supply of electric current: in addition to keeping a battery topped up, electricity offered practical lights, a horn, an electric means of ignition and so on, through to electric headrest adjustment and all the bells and whistles of a modern car.

Inevitably, the economics of providing electrical (and later electronic) systems in a car improved. Electronic control systems proved to be simpler, cheaper and more reliable than their mechanical predecessors. Cars acquired systems for emissions control, and anti-lock braking – later mandated by law – and if you’re going to have all that computing power in a vehicle, it’s logical to let it work like a computer. Cars acquired diagnostic sockets that allowed a mechanic to investigate faults (and which locked drivers into paying top dollar for servicing at manufacturer-approved centres, for a time). But then, if you’ve got communications gear such as a cellular antenna and a global positioning system on-board, why not integrate it all? That allows the car manufacturer to ‘mine’ your data, and learn things such as how their vehicle performs, and how customers use it. It’s a bit of an invasion of privacy, but it’s a fabulous way to turn all your customers into unpaid test drivers. We have to assume that drivers’ data is regularly being mined today, at some level of abstraction.

Here at Capacify, we strive to accurately portray a range of business concepts. This is how data mining is done.

Here at Capacify, we strive to portray business concepts in accurate and useful terms. Here, you can see how data mining is performed.

And if you can receive data from cars, maybe it’s a good idea to be able to send data to cars, as well. Updates to the navigation system require such a capability… but it could also be handy to be able to patch a hypothetical fault in your firmware without the usual formal recall for work at an approved service centre (and all the bad press that this entails).

It’s amazing to think that all this capability comes about for free, piggybacked onto other functions that a modern car needs. Computing really has improved to the point where it’s more expensive to leave functionality out. (There’s also the question of designers mistakenly leaving in a ‘back door’ as a result of using off-the-shelf components or code segments that have other applications…)

As Nissan have found out, sooner or later, somebody figures out how to hack your system. In their case, it was security researchers Scott Helme and Troy Hunt. Hunt is said to have informed Nissan of the vulnerability, but after a month with no news of a fix he went public with a demonstration in which a Nissan Leaf in the UK was accessed from Australia.

It doesn’t exactly presage armageddon, but we can expect this kind of thing to become increasingly common as machines get ‘smarter’. Nissan aren’t software developers or security specialists: they just wanted to make a competitive car with some neat features, such as allowing drivers to ensure their car is at a comfortable temperature with a smartphone app… but they messed up. They’re not alone, either: this article reports how a 2015 Jeep Cherokee could be hacked remotely, manipulating the in-car entertainment and windscreen wipers, and even shutting the car down.

VW Beetle cutaway

No word yet on whether my other car is safe from the hackers…

More worrying is the tale of security researcher Chris Roberts, who appears to have hacked into airliners while on board as a passenger. He exploited a weakness of the in-flight entertainment systems to interface with critical systems on aircraft such as the Boeing 737-800, 737-900, 757-200 and Airbus A-320, making fifteen to twenty such incursions from 2011 to 2014. Roberts has been interviewed by the FBI, but hasn’t been charged with a crime. It appears he’s not welcome to fly with United Airlines anymore, though.

Screenshot that appears to show access to aircraft systems

The control system of a jet airliner seems somewhat… retro. [Image: Chris Roberts]

What of the supply chain, and the Internet of increasingly connected things? Lars Jensen, CEO of CyberKeel, found serious vulnerabilities in sixteen out of twenty ocean carriers surveyed. The motive and opportunity exist for theft of data, fraud and perhaps terror attacks.

“No opening is too small,” says Carole Boyle at Strategic Sourceror. Information that would once exist on a physical clipboard is now in cyberspace, and shared widely. Where businesses collaborate, the security is only as good as at its weakest point, while differences of time zone and asynchronous communications may mean that organisations are slow to notice when their security has been breached.

Citing a data breach at US retailer Target, John Mello suggests that the supply network is a particular point of vulnerability for corporations. A supplier’s credentials, normally used in legitimate business-to-business communications, can be used to gain access to much of a network… and the hackers only have to find their way into one supplier’s account to achieve this, while a large corporation will have to audit the security of hundreds of vendors.

computer screen reporting cyber attack

Remember the good old days, when all you had to worry about was the wrath of former employees?

Like Nissan, you probably didn’t think you were in the cybersecurity business… but it turns out that we all are, from now on. Next time you install a free game on your smartphone, you might be wise to ponder if it really is a bargain, or if it contains a piece of malware that will snoop on your SMS messages, and perhaps suppress or spoof a two-step verification attempt from a web-based service that you depend upon.