While many question whether drone deliveries will ever happen in the developed world, Keller Rinaudo is already using autonomous aircraft to deliver medical supplies to remote locations in Africa.
Few people are fortunate enough to combine their job with their passion. Keller Rinaudo is one of them. Rinaudo is CEO and cofounder of Zipline, a company that builds autonomous drones designed for delivering medical supplies to remote parts of the world.
The Harvard University-educated Rinaudo started his career as a software engineer and a professional rock climber. For a time, he built computers out of RNA and DNA to operate in human cells as molecular doctors. Then, he discovered the wonderful world of logistics and the possibilities of using new technologies to deliver medical supplies to all of the world's inhabitants, wherever they may live.
San Francisco, California-based Zipline employs 40 aerospace and software engineers and is funded by an impressive slate of investors, including Sequoia Capital, Google Ventures, Paul Allen, Jerry Yang, and Stanford University. The tech firm builds and operates 40-pound battery-powered drones that look like small airplanes. The drones are catapult-launched and fly to remote destinations to make deliveries by paper parachutes. They then return to the distribution center, where they fly into a large net or are caught by a tailhook and are quicklymade ready for further deliveries. (You can watch a video of a drone delivery on the company's website, www.flyzipline.com.)
NAME: Keller Rinaudo TITLE: Chief Executive Officer and cofounder of Zipline EDUCATION: Artium Baccalaureus (Bachelor of Arts) in economic and biotechnology from Harvard University EXPERIENCE: Chief executive officer of Zipline, where he oversees a team of 100 flight engineers and operators formerly of companies including SpaceX, Boeing, and Google based in the San Francisco Bay area and Rwanda; software engineer; professional rock climber; as a student at Harvard, he built computers out of RNA and DNA that can operate in human cells as molecular doctors RECOGNITION: Published research on RNA and DNA computers in Nature Biotechnology, becoming one of the youngest first authors in the publication's history
Zipline's first major project was partnering with the government of Rwanda to use its drones to make last-mile deliveries of blood to remote transfusing facilities. From its DCs, Zipline currently delivers about 30 percent of the national blood supply of Rwanda. The long-term vision for this project is to be able to swiftly reach each of Rwanda's 11 million citizens with any essential medical product they need, regardless of how remote they are.
Rinaudo recently sat down with CSCMP's Supply Chain Quarterly Editorial Director David Maloney to discuss this ground-breakingventure. The following is an edited version of their conversation. To watch the full interview, go to https://www.supplychainquarterly.com/video.
Q: What made you decide to zero in on health care logistics for Zipline's first drone deliveries?
Health care logistics was a really good place for us to start for a number of reasons. First of all, every delivery is potentially saving a human life. Second, health care products are obviously urgently needed, and logistics is a really important part of making sure that doctors have what they need to treat patients. Plus, the health carelogistics market itself is a huge US$7 billion market, and it's one that, while it functions well in developed countries, really doesn't function well in a lot of other parts of the world. There is a huge opportunity to both push the industry forward and also save lives.
Q: Why was Rwanda chosen?
We wanted to find a country that was small enough that we could get to national scale quickly and had a government that was making active investments in technology and health carefor its citizens. Rwanda really fit that bill. So, in partnership with Rwanda's administrative health [ministry], we've been able to turn Rwanda into the first country to achieve universal health careaccess for all. They have been able to put every single one of their citizens within a 15- to 25-minute delivery of any essential medical product.
Q: Your drones sometimes have to fly over populated areas to reach patients in remote locations. Some people have questioned the safety of drones flying over people. Is that a concern for you as well?
When we're flying, what's important to us is not just saving the life of the person that we're delivering for, but also ensuring that we're safe for the people we're flying over—the people who live in the towns and cities that we fly over on a daily basis. It's really important that these vehicles be able to operate at a similar level of reliability as general aviation aircraft.
Q: Could you describe just how the vehicles fly and make their deliveries?
The user experience of receiving a delivery from Zipline is very simple. Any doctor or health worker can use a cellphone to send a text message to place an order. When the distribution center receives that text, Zipline's team will basically pull the product from stock and load it into one of our aircraft. That aircraft is then launched from the distribution center, and it flies autonomously to the destination's GPS coordinates.
Q: So, no one is controlling it? It is all programmed electronically and by computer?
Exactly. The plane is flying itself using a flight control algorithm. It will descend to about 30 feet off the ground, and then we drop the package using a really simple paper parachute. That enables us to deliver every shipment right into the receiver's "mailbox," which is an area about the size of two parking spaces on the ground. The plane will turn around, come home, and land at the distribution center. It is ready to fly again a few minutes later.
Q: Have you had any complications with your deliveries in Rwanda?
We've made tens of thousands of deliveries, and we've never lost a vehicle. We design redundant systems into every level, whether it's the flight controls, the avionics, or the way the vehicle is mechanically engineered.
Q: And these are delivery vehicles that your company has created?
Yes. We build everything from scratch. We also have a system on board so if the vehicle can't make it back to the distribution center, it can actually use a parachute to bring itself to ground gently. So, this is how we ensure that these vehicles are 100-percent safe for the people they're flying over.
Q: How many types of those deliveries are you making a day in Rwanda?
We just agreed to an expansion of our services in Rwanda and have added a second distribution center. That will allow us to do about 200 deliveries per day countrywide.
Q: Are you looking to expand to other nations with this technology?
Yes, rural health care is a global problem. A lot of other countries are now looking at Rwanda as a role model and figuring out how they can leverage similar technology to improve their own health care systems. So, we will be launching in several other African countries in the next six months.
And here in the United States, we will soon begin making lifesaving medical deliveries in rural North Carolina. We're working through final details with the Federal Aviation Administration, the state of North Carolina, and our partners on the ground. We expect to begin deliveries there beginning in the second quarter of this year.
Q:There's been a lot of talk in the logistics industry about drones being used for deliveries. Can you see a day when that technology will be used on a regular basis for small parcel deliveries, such as e-commerce orders?
Yes. The funny thing is, it is already happening at scale today, just not in the United States. When it comes to e-commerce, we think it's inevitable that this type of technology will have a big impact on how e-commerce orders are delivered, but that's not the first place the technology is going to start. It makes more sense to start focused on lifesaving applications. Then I think after that, you'll see a lot of high-need, urgent applications that might be more industrial applications. And then in the long run, you'll start to see this technology permeate the really big parcel-delivery market that's currently served mainly by UPS and FedEx.
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
Census data showed that overall retail sales in October were up 0.4% seasonally adjusted month over month and up 2.8% unadjusted year over year. That compared with increases of 0.8% month over month and 2% year over year in September.
October’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were unchanged seasonally adjusted month over month but up 5.4% unadjusted year over year.
Core sales were up 3.5% year over year for the first 10 months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023. NRF is forecasting that 2024 holiday sales during November and December will also increase between 2.5% and 3.5% over the same time last year.
“October’s pickup in retail sales shows a healthy pace of spending as many consumers got an early start on holiday shopping,” NRF Chief Economist Jack Kleinhenz said in a release. “October sales were a good early step forward into the holiday shopping season, which is now fully underway. Falling energy prices have likely provided extra dollars for household spending on retail merchandise.”
Despite that positive trend, market watchers cautioned that retailers still need to offer competitive value propositions and customer experience in order to succeed in the holiday season. “The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under invest in their stores,” Nikki Baird, VP of strategy & product at Aptos, a solutions provider of unified retail technology based out of Alpharetta, Georgia, said in a statement. “They need to make investments in labor, customer experience tech, and digital transformation. It has been too easy to kick the can down the road until you suddenly realize there’s no road left.”
A similar message came from Chip West, a retail and consumer behavior expert at the marketing, packaging, print and supply chain solutions provider RRD. “October’s increase proved to be slightly better than projections and was likely boosted by lower fuel prices. As inflation slowed for a number of months, prices in several categories have stabilized, with some even showing declines, offering further relief to consumers,” West said. “The data also looks to be a positive sign as we kick off the holiday shopping season. Promotions and discounts will play a prominent role in holiday shopping behavior as they are key influencers in consumer’s purchasing decisions.”
That result came from the company’s “GEP Global Supply Chain Volatility Index,” an indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses. The October index number was -0.39, which was up only slightly from its level of -0.43 in September.
Researchers found a steep rise in slack across North American supply chains due to declining factory activity in the U.S. In fact, purchasing managers at U.S. manufacturers made their strongest cutbacks to buying volumes in nearly a year and a half, indicating that factories in the world's largest economy are preparing for lower production volumes, GEP said.
Elsewhere, suppliers feeding Asia also reported spare capacity in October, albeit to a lesser degree than seen in Western markets. Europe's industrial plight remained a key feature of the data in October, as vendor capacity was significantly underutilized, reflecting a continuation of subdued demand in key manufacturing hubs across the continent.
"We're in a buyers' market. October is the fourth straight month that suppliers worldwide reported spare capacity, with notable contractions in factory demand across North America and Europe, underscoring the challenging outlook for Western manufacturers," Todd Bremer, vice president, GEP, said in a release. "President-elect Trump inherits U.S. manufacturers with plenty of spare capacity while in contrast, China's modest rebound and strong expansion in India demonstrate greater resilience in Asia."
Even as the e-commerce sector overall continues expanding toward a forecasted 41% of all retail sales by 2027, many small to medium e-commerce companies are struggling to find the investment funding they need to increase sales, according to a sector survey from online capital platform Stenn.
Global geopolitical instability and increasing inflation are causing e-commerce firms to face a liquidity crisis, which means companies may not be able to access the funds they need to grow, Stenn’s survey of 500 senior e-commerce leaders found. The research was conducted by Opinion Matters between August 29 and September 5.
Survey findings include:
61.8% of leaders who sought growth capital did so to invest in advanced technologies, such as AI and machine learning, to improve their businesses.
When asked which resources they wished they had more access to, 63.8% of respondents pointed to growth capital.
Women indicated a stronger need for business operations training (51.2%) and financial planning resources (48.8%) compared to men (30.8% and 15.4%).
40% of business owners are seeking external financial advice and mentorship at least once a week to help with business decisions.
Almost half (49.6%) of respondents are proactively forecasting their business activity 6-18 months ahead.
“As e-commerce continues to grow rapidly, driven by increasing online consumer demand and technological innovation, it’s important to remember that capital constraints and access to growth financing remain persistent hurdles for many e-commerce business leaders especially at small and medium-sized businesses,” Noel Hillman, Chief Commercial Officer at Stenn, said in a release. “In this competitive landscape, ensuring liquidity and optimizing supply chain processes are critical to sustaining growth and scaling operations.”
With six keynote and more than 100 educational sessions, CSCMP EDGE 2024 offered a wealth of content. Here are highlights from just some of the presentations.
A great American story
Author and entrepreneur Fawn Weaver closed out the first day of the conference by telling the little-known story of Nathan “Nearest” Green, who was born into slavery, freed after the Civil War, and went on to become the first master distiller for the Jack Daniel’s Whiskey brand. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
She told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest. That story also inspired her to create Uncle Nearest Premium Whiskey.
Weaver discussed the barriers she encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, pointing to a recent project in which the company was able to fast-track a new Uncle Nearest product thanks to close collaboration with its supply chain partners.
A two-pronged business transformation
We may be living in a world full of technology, but strategy and focus remain the top priorities when it comes to managing a business and its supply chains. So says Roberto Isaias, executive vice president and chief supply chain officer for toy manufacturing and entertainment company Mattel.
Isaias emphasized the point during his keynote on day two of EDGE 2024. He described how Mattel transformed itself amid surging demand for Barbie-branded items following the success of the Barbie movie.
That transformation, according to Isaias, came on two fronts: commercially and logistically. Today, Mattel is steadily moving beyond the toy aisle with two films and 13 TV series in production as well as 14 films and 35 shows in development. And as for those supply chain gains? The company has saved millions, increased productivity, and improved profit margins—even amid cost increases and inflation.
A framework for chasing excellence
Most of the time when CEOs present at an industry conference, they like to talk about their companies’ success stories. Not J.B. Hunt’s Shelley Simpson. Speaking at EDGE, the trucking company’s president and CEO led with a story about a time that the company lost a major customer.
According to Simpson, the company had a customer of their dedicated contract business in 2001 that was consistently making late shipments with no lead time. “We were working like crazy to try to satisfy them, and lost their business,” Simpson said.
When the team at J.B. Hunt later met with the customer’s chief supply chain officer and related all they had been doing, the customer responded, “You never shared everything you were doing for us.”
Out of that experience, came J.B. Hunt’s Customer Value Delivery framework. The framework consists of five steps: 1) understand customer needs, 2) deliver expectations, 3) measure results, 4) communicate performance, and 5) anticipate new value.
Next year’s CSCMP EDGE conference on October 5–8 in National Harbor, Md., promises to have a similarly deep lineup of keynote presentations. Register early at www.cscmpedge.org.