So you want to get funding from industry?
Funding workshop
Informs Annual Meeting
Seattle, 2007
Warren Powell
CASTLE Laboratory
Princeton University
http://www.castlelab.princeton.edu
© 2006 Warren B. Powell, Princeton University © 2007 Warren B. Powell
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Schneider National
© 2007 Warren B. Powell
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The fractional jet ownership industry
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NetJets Inc.
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CASTLE Lab
 CASTLE Lab financial support
» Trucks (Schneider National, Yellow Freight, Burlington
Motor Carriers, North American Van Lines, IU
International)
» Trains (Norfolk Southern, Burlington Northern Sante
Fe, Canadian National)
» Planes (Netjets, U.S. Air Force, Canadian Air Force,
Embraer)
» Energy (Lawrence Livermore, PJM Interconnections)
» Security (DIMACS/Dept of Homeland Security)
» Government (NSF, AFOSR)
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CASTLE Lab
 Research challenges
» How do you optimize these problems in real-time?
» How do we plan operations over the near-term?
» How do we design these systems?
•
•
•
•
»
»
»
»
With the right resources?
With the right contracts?
With the right work rules?
To be robust under different forms of uncertainty?
Are we charging the right prices?
Are we serving the right customers?
Are we using the right information technologies?
…. Etc. etc.
© 2007 Warren B. Powell
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CASTLE Lab
 The CASTLE Lab research model
» Research dimensions:
• Theoretical research (e.g. convergence proofs)
• Computational research (speed of convergence, solution
quality)
• Field research (does it work?)
» Mixture of government and industry funding which
supports
• Faculty (W. Powell)
• Full-time research staff (2-4, depending on the year and
projects)
• Graduate students
» Professional staff produce production-quality,
deliverable code
• All software owned by Princeton University
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Research expenditures
Expenditures (000's)
Castle Lab
900
800
700
600
500
400
300
200
100
0
19992000
20002001
20012002
20032004
20022003
20042005
20052006
20062007
Year
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So you want to work with industry…
 Why do you want to work with industry?
» Money – Funding for summer support and graduate
students, computers, travel, etc., etc.
» New problems – You are looking for fresh ideas, rather
than simply recycling problems from the literature.
» New theory – Real world problems sometimes
challenge fundamental theory.
» Data - Government agencies are a source of funding,
but they don’t have data. Companies have data.
» Field testing – Does your research actually work?
© 2007 Warren B. Powell
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So you want to work with industry…
 Why should industry want to work with you?
» Prestige – To be able to say they are working with a
university to solve their problem.
» Access to faculty – By providing funding, they are
buying the ability to call you in for a meeting, or to
come and visit to meet with you (and possibly other
faculty).
» Access to students – It is a way for them to gain better
visibility with the students, making it easier to attract
them.
» Deliverables:
• They want the results of studies you might perform to help
them with their planning.
• They want technology (software which delivers new models
and algorithms) they can use to improve their business.
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So you want to work with industry…
 Your challenge:
» Do the deliverables contribute to the research mission
of a university?
» Yes if:
• The questions represent questions that we cannot answer with
current methods.
• Answering the questions provides you access to data to test
new or existing models and algorithms in a way that has not
been done (to academic standards) in the research literature.
• The work will provide field demonstration of technology in
industry that has not been done before.
Most important: There must be a significant degree of
uncertainty in the outcome. If you are sure the method
will work, then the activity is not research!
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Technology transfer
 Traditional model development creates a wall
between academic research labs and operational
environments.
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Technology transfer
 In some cases, there are multiple layers of walls
between model development and implementation.
Academic research
Software vendor
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Industry
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Technology transfer
 Working with faculty startups
Princeton Transportation Consulting Group
» University rules limit ability to
participate in enterprises which
relate to our research.
» Companies cannot fund further
research at the university.
» “Awkward” having staff from
these companies visiting the
university.
» Limits our ability to continue
to work with these companies
to develop technologies that
are not quite ready.
 Partner companies
» Princeton Consultants (no
affiliation with any Princeton
faculty).
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Technology transfer
 Problems with the “over the wall” approach
» It assumes the technology is basically sound before it is
tested in the field.
» Laboratory testing uses data that reflects your initial
understanding of the problem.
» Real problems are often much more complex than what
we learned in textbooks.
 An illustrative application:
» A real-time model for boxcars at a major railroad.
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Managing boxcars
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Managing boxcars
 The academic view:
» Stochastic, multicommodity flow problem:
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Managing boxcars
 The evolution of attributes:
Single
Multicommodity commodity
flow
flow
Multiattribute
flow
a   Time   Time  
Time
Time
Time



 Location   Location  
  Location   Location 
Location






 Boxcar type   Boxcar type   Boxcar type   Boxcar type 




Time
to
dest.
Time
to
dest.
Time
to
dest.




 Repair status   Repair status 


Shipper
pool


A 
4,000
40,000
1,680,000
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5,040,000
50,400,000
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So you want to work with industry…
 When is it “consulting,” and when is it research?
» Most managers cannot tell the difference.
» Question: Can the problem be solved with a very high
probability of success using known technology?
• Research requires some level of risk.
» You should be able to use the experience of doing the
project to contribute to publishable research in a
significant way.
 Common myths
» “Research” = “theory”, “experiments” and “anything
that can be done entirely in a lab.”
» “Implementation” = “consulting”
Operations research needs to develop a culture of doing
field research.
© 2007 Warren B. Powell
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So you want to work with industry…
 What if they are looking for software:
» There is a lot of funding available from industry if you are willing
to deliver a product (software).
» Software is hard.
 Reasons to deliver software they can use:
» The company will only provide funding if they can get software
they can use.
» With corporate involvement, you get access to data and
management that would otherwise not be available.
» Provides a true field-test of your research.
» You get to see implementation problems first-hand. If your
software does not work, is the problem engineering (data,
software), implementation (people issues) or fundamental research
(models and algorithms)?
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So you want to work with industry…
 Delivering software:
» Who is going to write the code?
•
•
•
•
•
You?
A graduate student?
Post-doc?
Full-time research staff?
A third-party consulting firm?
» Who is going to maintain the code?
• You?
• The sponsor?
• A third-party?
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So you want to work with industry…
 Traps to look out for:
» Common mathematicians mistake: “If you know how to
do it, it is easy.”
• Real projects introduce dimensions you may have never
anticipated.
» Is the company using you or your graduate students as
cheap programmers?
• First rule: Graduate students can’t code (production quality).
• Second rule: Most professors can’t code (and the rest
shouldn’t).
• Third rule: Sometimes have to ignore rules 1 and 2 to get the
relationship started.
» “We are just looking for prototype code.”
» Are you charging $25k for a $250k project? Are you
charging $250k for a $2.5M project?
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So you want to work with industry…
 Dealing with the lawyers:
» Who is going to own the code?
• The university?
• The sponsor?
• A third-party consulting firm?
» What about the “intellectual property”?
•
•
•
•
What is “IP” in an OR model?
What is “fundamental” research?
Should you apply for a patent? If so, what is patentable?
At what point does the model capture private business
information (and therefore should be proprietary to the
business)?
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Yellow Freight System
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Yellow Freight System
© 2004 Warren B. Powell, Princeton University © 2007 Warren B. Powell
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“But the crown jewel of
[CEO] Zollars’ and [CIO]
Caddell’s technology
overhaul has been SYSNET,
a state-of-the-art computer
system designed jointly by
Yellow and CASTLE Lab…
at Princeton University.”
© 2007 Warren B. Powell
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