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2015

The largest container ship ever to visit U.S. shores completed its first stop at the Port of Los Angeles Tuesday night, and has now arrived at the Port of Oakland. The megaship Benjamin Franklin, owned by French shipping line CMA-CGM, is 1,300 feet long, 177 feet wide and has the capacity of nearly 18,000 containers. Most ships coming into U.S. ports carry 14,000 containers.

 

The ship surely won’t be the last of such size to visit U.S. ports either. Indeed, as global trade volumes rise and shippers strive to reduce costs, they are turning to larger, more fuel-efficient ships that bring economies of scale and burn less fuel and have lower exhaust emissions than older vessels.

 

The problem is not all U.S. ports can accommodate such megaships. The Port of Oakland has already dredged berths and channels to 50 feet deep and raised the height of its cranes that load and unload vessels to handle the megaships. It also has a modernization project underway to move cargo more quickly from ships to warehouses, trucks and rail cars.

 

“Nothing this big has ever been seen in our country,” Port of Oakland Executive Director Chris Lytle says in a San Jose Mercury News article today. “There’s no doubt others will follow suit, and we’re gratified that Oakland is one of the only ports in the U.S. ready to receive them.”

 

Docking a ship of this size is one challenge, but unloading the sheer volume of cargo is even more challenging. However, officials at the Port of Los Angeles took early—and unusual—steps. For example, trucking companies were notified of the arriving containers, and railcars were positioned weeks in advance to ensure a quick turnaround, according to a CMA-CGM statement.

 

Two weeks before the ship arrived, the port received detailed information on container count and placement on the ship, as well as a breakdown of their destinations—to the Midwest via rail, for example, or to local retailers or inland warehouses to be unloaded. Ports typically receive that information 36 to 48 hours before the vessel arrives, Gene Seroka, executive director of the Port of Los Angeles, says in a Wall Street Journal article.

 

Knowing all that information earlier “gave us a great line of sight as to how we should plan railcar assets, truck power and longshore labor,” Seroka says, adding that it’s a system the port wants to replicate as more large ships come to call.

 

From Saturday morning, Dec. 26, to Tuesday evening, Dec. 29, APM Terminals Pier 400 in the Port of Los Angeles moved 11,229 containers of various sizes on and off the ship, about 61 percent inbound and 39 percent outbound, according to the port. Approximately 1,500 longshore workers were employed on the ship and in the shipyard more than 56 hours to unload imports and reload exports using a record nine cranes at once. According to APM Terminals, 12 double-stack trains carried 2,845 of the inbound containers off the dock.

 

The flip side of the coin, however, is that many analysts say U.S. ports aren’t prepared to regularly handle the traffic peaks in container activity that such megaships present. To be sure, it will be interesting to see how U.S. ports continue to prepare for megaships, as well as how supply chains will need to adapt to the greater cargo volume being unloaded.

California regulators, in a move to put limits on self-driving cars, recently proposed rules that would sharply restrict their use on the state’s roads. Furthermore, the proposal would ban “driverless” cars that travel with no humans onboard who are able to take control.

 

Under the proposal by the California Department of Motor Vehicles, all autonomous cars will need a steering wheel and pedals when operating on California’s public roads. More importantly, they will need a human driver with an “autonomous vehicle operator certificate” prepared to take control of the car if necessary.

 

There is more worth noting. According to the draft regulations, manufacturers would also need to put the driverless cars through a third-party safety test; regularly report accidents; implement security measures to detect, respond and alert a driver if someone hacks the vehicle;  and inform passengers what kind of data the vehicles collect.

 

The response was generally about what you would expect. In a statement, Google said California’s rules would hold back a technology with the potential to prevent car crashes and improve the mobility of people who currently cannot drive.

 

“Safety is our highest priority and primary motivator as we do this,” spokesman Johnny Luu wrote in an e-mail. “We’re gravely disappointed that California is already writing a ceiling on the potential for fully self-driving cars to help all of us who live here.”

 

What was surprising though is that Mark Rosekind, head of the National Highway Traffic Safety Administration, said the agency does not yet have a position on California’s proposals, however he does oppose a “patchwork” of state regulations on driverless cars.

 

Interestingly, although California’s proposal is opposed by innovators in driverless car technology, it’s consistent with NHTSA’s 2013 guidelines on driverless cars. Transportation Secretary Anthony Foxx has asked the NHTSA to review those guidelines to ensure they don’t hold back innovations, a Reuters story reports.

 

“We need to figure out how to make sure this is not a patchwork [of state regulations],” Rosekind said in the Reuters story. “We are pretty deep into looking at our regulatory framework that we currently have.”

 

Rosekind adds that NHTSA is talking to state officials in an effort to “have some kind of national approach to this.” He further notes that Europe has a “patchwork” approach to driverless vehicle testing that is, what he terms, “problematic.”

 

Although NHTSA is reviewing California’s rules, it also is worth noting that states do have wide authority to set state driving regulations.

 

In any event, I look forward to responses from other companies. In addition to Google, there are numerous other car companies with a permit to test vehicles on Californian roads. They include Honda, Mercedes Benz, Tesla Motors, Nissan and BMW AG as well as the newest entrant, Ford.

 

Indeed, the Ford Research and Innovation Center Palo Alto continues to grow, and one of the results is that the company recently announced it’s officially enrolled in the California Autonomous Vehicle Tester Program to test autonomous vehicles on public roads. Ford expects fully autonomous Ford Fusion Hybrid sedans to be driving in California next year.

 

I am in favor of innovation, however, at this point, I believe these vehicles should still have steering wheels and pedals, as well as a human driver ready to take control if need be. But that’s me. I also think there should be a national approach to governing how the cars may be tested, rather than a state-by-state patchwork.

 

What are your thoughts? Should autonomous vehicles still have controls and a human ready to seize control? Also, should governing decisions regarding these vehicles be left to individual states?

The Ford Research and Innovation Center Palo Alto has announced it will work with Girls Who Code to help close the gender gap in technology and engineering fields.

 

The Girls Who Code Clubs Program teaches computer science to 6th-12th grade girls. Clubs have been launched in 25 states, helping thousands of girls learn how to code. What’s interesting is the organization’s approach. First, it offers 40 hours of instruction in computer science including project-based activities to reinforce concepts like conditionals, lists and loops as well as skills such as mobile app development. However, Girls Who Code Clubs also host speakers, coordinate field trips and engage with the local tech community. Also, Girls Who Code explains that as Clubs participants, girls have access to a supportive and engaged network of teachers, mentors, professionals and fellow students.

 

As part of the collaboration, Ford Motor Company Fund, the philanthropic arm of Ford, will support the education and professional growth of Girls Who Code club members in northern California, serving more than 180 young women in the Bay Area. The Ford Palo Alto team will provide mentorship and instruction to club members, and help them engage in hands-on experience at the company’s Silicon Valley research lab.

 

“The use of technology is growing exponentially among young people, yet it’s becoming increasingly difficult to attract them to technology-related educational programs,” says Marcy Klevorn, Ford chief information officer. “Ford is working with Girls Who Code to educate them on the many exciting career opportunities available in the fields of science, technology, engineering and math. This kind of outreach grows more important each year.”

 

Ford’s national STEM efforts include working with colleges, high schools, founding academies for high school-age students, a high school science and technology program, sponsorship of FIRST Robotics teams and scholarship funding. By supporting education in these areas, the company notes it is working to create opportunities connecting the company and its employees directly with youth and the community to inspire interest in technology and innovation.

 

There is a particular need, however, for organizations such as Girls Who Code. That’s because while the number of technology-related degrees awarded in the U.S. is rising, women are especially underrepresented in the tech industry. A report from the American Association of University Women earlier this year found that just 12 percent of engineers are women, and the number of women in computing has fallen from 35 percent in 1990 to 26 percent today. Furthermore, the numbers are especially low for Hispanic, African American and American Indian women. Black women make up one percent of the engineering workforce and three percent of the computing workforce, while Hispanic women hold just one percent of jobs in each field. American Indian and Alaska Native women make up just a fraction of a percent of each workforce, according to the report.

 

“We are especially excited at this expanded collaboration because Ford is an institution with longevity in STEM careers for women,” says Reshma Saujani, founder and CEO, Girls Who Code. “The support will enable us to further our mission of providing young women with the resources necessary to one day work for Ford or any number of other technology companies.”

 

Clearly, women are underrepresented in the STEM fields, so it certainly is a good idea for clubs, organizations and even mentorship programs to reach out to grade school, middle school and high school girls to not only explain the possibilities of STEM careers, but to support and guide the students as they explore various courses. It will be interesting to watch Girls Who Code and follow the organization’s progress, not only with Ford, but with other companies as well.

 

What are your thoughts on promoting STEM careers for young women?

One of my favorite books—and movies, too—is “A Christmas Carol,” Charles Dickens’ tale of Ebenezer Scrooge and redemption.

 

As you likely recall, Scrooge was visited by four spirits on Christmas Eve. The first being that of his former business partner, Jacob Marley, who had died seven years ago on that very night. But it’s the other three spirits—the Ghost of Christmas Past, the Ghost of Christmas Present, and the Ghost of Christmas Yet to Come—that generally get most attention.

 

All of us can learn from Scrooge’s night, and can take stock—both professionally and personally—of what has been done, what is being done, and what will be done. These lessons can apply to most any supply chain discipline. So, for example, spend analysis can play the role of the Ghosts of Christmas Past and Present because purchasing executives can examine and scrutinize their own and their supplier’s past and present performance, contracts, commitments and risks so they in turn can make better decisions in the future.

 

The place to start, just as it was for Scrooge, is by reviewing the past. Using spend and supplier analytics, purchasing executives are able to examine past purchasing performance. That enables them to determine what went poorly, what was acceptable and—hopefully—what went well.

 

Purchasing executives also need accurate, up-to-date information to support advanced analysis. This way, they can see the reality of today’s transactions and commitments through numbers. That will allow them to determine, for instance, whether it’s best to continue tackling one crisis at a time or whether they should move to take corrective action. Admittedly, there can be some tough decisions to make. However, if executives have the facts and complete a thorough analysis, they will ultimately be more comfortable with the decisions they make.

 

That leads to future spending, or, for Scrooge, that which is Yet to Come. Spend analysis and sourcing provide a “what-if” course for purchasing. When purchasing executives have knowledge about the analysis of past performance—both their own and that of their suppliers—they can make better-informed decisions.  That is, they have an opportunity to learn from the past and take a new, improved course for future decisions.

 

During the supplier-selection process, for instance, innovative companies look beyond a vendor’s current capabilities, thinking about future capabilities and the anticipated cost to bring that capacity online. Using advanced optimization techniques, buying teams can quickly analyze the costs and benefits of making such an investment in a key supplier. By making a strong commitment to developing lasting collaborative relationships with the most strategic vendors, organizations can create the visibility and control necessary to be certain needed steps have been taken to reduce risk.

 

What do you think? Let me know how important you think it is to base key decisions by reviewing past actions and events. If you’d rather talk about Tiny Tim or a turkey as big as a young boy, that’s fine with me too.

 

Happy Holidays, everyone.

Two recent developments have me thinking more about the future of artificial intelligence (AI) and what it means to humans.

 

First, Juniper Research has forecast that more than one in 10 U.S. households will own a consumer robot by the end of the decade. That number is up substantially from the group’s estimates earlier this year of less than one in 25 U.S. households. To be fair, at this stage in development, those robots are expected to be so-called “task oriented” robots for routine, household chores, such as lawn mowing or vacuum cleaning.

 

On the one hand, it’s difficult to argue—perhaps even impossible—with the expected consumer demand. A robot vacuum cleaner may seem a bit like a novelty now, but five years is a long time and I certainly am curious to see how the technology develops over that time.

 

Then again, AI is developing at a surprising rate. It’s crucial to Facebook’s understanding pictures, Tesla’s cars autonomously driving themselves, and IBM’s Watson has moved on from beating humans at the TV game show “Jeopardy!” to medical research and diagnosing cancer. All of those developments are worthwhile, but they may also cause one to wonder where the technology is going.

 

That’s why it’s interesting to learn about a new non-profit AI research company called OpenAI. The company says its goal is to advance digital intelligence in the way that is “most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” What’s also noteworthy is that the company is backed by Tesla and SpaceX CEO Elon Musk and many others, who back the company with funding of an undisclosed amount but which Musk has said could be thought of as $1 billion.

 

“Since our research is free from financial obligations, we can better focus on a positive human impact,” OpenAI executives wrote in an introductory blog post last week. “We believe AI should be an extension of individual human wills and, in the spirit of liberty, as broadly and evenly distributed as is possible safely.”

 

The executives also explain in the blog that as a non-profit, their aim is to build value for everyone rather than shareholders. Researchers will be strongly encouraged to publish their work, whether as papers, blog posts, or code, and patents—if any—will be shared with the world. They further wrote that the company will freely collaborate with others across many institutions and expect to work with other companies to research and deploy new technologies.

 

OpenAI’s list of donors include PayPal Holding co-founder Peter Thiel and LinkedIn co-founder Reid Hoffman in addition to Musk. The venture’s research director is Ilya Sutskever, a former research scientist at Google, whose work included research into the technology that became Smart Reply, the auto e-mail-writing feature. OpenAI’s chief technology officer is Greg Brockman, formerly the CTO of Stripe, a technology start-up company.

 

Musk has been noticeably critical of the possible harm from AI, telling Massachusetts Institute of Technology students last year that AI may even be “our biggest existential threat.” He then added that with the development of AI, “we are summoning the demon.” So perhaps it’s no surprise that Musk backs OpenAI and advocates responsible development of AI. Indeed, in talking about OpenAI, and referencing his MIT speech, Musk recently said that “if you’re going to summon anything, make sure it’s good.”

 

In some respects, the work of OpenAI and the Leverhulme Centre for the Future of Intelligence can be thought of as a form of risk mitigation. However, rather than planning a response to a possible earthquake or catastrophic problem with a key supplier, leaders at this type of institute are working to prevent a problem in the first place—in this case, the unchecked development of, or even unethical use of, AI.

 

What are your thoughts on the development of AI, or even of robot vacuum cleaners?

The hallmark of the most innovative companies is that they achieve great speed, perfect Lean R&D processes, leverage technological platforms and systematically explore adjacent markets, according to the results of a new survey.

 

The Boston Consulting Group surveyed more than 1,500 senior innovation executives—across a wide range of countries and industries—to gain their perspective on the state of innovation in business. In the new report, “The Most Innovative Companies 2015: Four Factors that Differentiate Leaders,” the firm lists the 50 companies that global innovation executives rank as the most innovative.

 

Not surprisingly, Apple and Google are listed as the first and second most innovative companies. Tesla Motors, which was ranked seventh last year, is listed as the third most innovative company. Microsoft and Samsung were ranked fourth and fifth respectively.

 

What I found most interesting isn’t the four factors respondents believe differentiate truly innovative companies, but their views on those capabilities. For example, fast innovators are much more likely to see themselves as strong innovators—42 percent of innovators reporting a culture of speed at their company also rated their organization’s innovation capabilities as strong, compared with less than 10 percent of slow innovators. Respondents from fast innovators also see their companies as more disruptive—27 percent of respondents compared to 1.5 percent of respondents from slow innovators.

 

One reason respondents place such an emphasis on the need for speed is to overcome a key business challenge. Indeed, 42 percent of the survey’s respondents cited long development times as a key obstacle to their organization’s ability to earn a return on its innovation investment.

 

Likewise, Lean practices, most often associated with manufacturing, have also gained favor in research and development. Strong innovators are two to three times more likely to adhere to Lean principles than their weak counterparts, according to the survey results.

 

“It takes a deft touch to get processes right in R&D—you need appropriate control, but not so much that you quash creativity, the lifeblood of R&D,” says Michael Ringel, a BCG partner and report coauthor. “It’s all about doing the work right and doing the right work. Doing the work right in R&D involves the same principles that are core to the Lean approach in manufacturing and other domains. But where Lean in R&D departs from these other domains is in doing the right work. There are so many degrees of freedom in R&D, given that it is a learning enterprise, that getting smart about which hunches you track down and which you let go becomes critical.”

 

Also of note is how respondents view advances in technology platforms: 50 percent of the surveyed executives see the advances as the most impactful type of innovation. Additionally, more than half of the respondents who see tech platforms and big data as having a big impact have incorporated them into their company’s innovation strategies.

 

Finally, the survey respondents believe adjacent growth is crucial for innovation. Recurring members of BCG’s annual list of the 50 most innovative companies such as 3M, Amazon, Apple, General Electric, Google and Procter & Gamble, are all noted for their ability to successfully identify and leverage new adjacent business ideas that drive revenue.

 

“As markets mature and competition increases, growth in [a company’s] core portfolio often slows,” says Andrew Taylor, a BCG partner and report coauthor. “Adjacencies help innovative companies open new avenues for growth through exposure to markets in which they benefit from 100 percent of the share they achieve. To be successful, these companies frequently leverage existing capabilities in lean, speed and technology platforms to enable innovations, whether next door or further afield.”

 

What are your thoughts on innovation? Do you also believe that the combination of speed, lean R&D processes, use of technological platforms and systematically exploring adjacent markets are key factors in becoming an innovation leader?

 

Almost all of the Millennials taking part in a recent survey say they expect to see equal opportunities for women in the workplace but they also believe it won’t be soon.

 

Indeed, 97 percent of the Millennials (born between 1980 and 1995) responding to the survey said they believe they’ll be the generation to finally achieve equal opportunities for women in the workplace, according to a report from ManpowerGroup. However, they also are realistic about when it will happen, and estimate such changes will take another 21 years. The most optimistic respondents were established male leaders, who estimate the playing field will be level in the next 14 years, despite the fact they hold the power and influence at a time when progress is stalling, the report explains.

 

The report, “Seven Steps to Conscious Inclusion: A Practical Guide to Accelerating More Women into Leadership,” is based on survey responses from more than 200 global leaders. It evaluates generational, gender and geographical attitudes to achieving gender parity.

 

The most significant identified obstacle is an entrenched male culture, which even male respondents acknowledged must change. Interestingly, 59 percent of leaders interviewed said they believe the single most powerful thing an organization can do to promote more women leaders is to create a gender-neutral culture, led by the CEO. What’s more, 42 percent of the respondents believe that flexible working is key to getting more women into leadership.

 

“It’s proven that the problem will not correct itself—we are stuck in a circular conversation,” says Mara Swan, ManpowerGroup’s executive vice president, Global Strategy and Talent, and co-chair of the World Economic Forum’s Global Agenda Council on Gender Parity. “Increasing representation by putting more women in support roles like Communications and HR is just not good enough anymore. That is not shifting the needle. Getting more women into P&L roles will significantly help accelerate the talent and leadership pipeline.”

 

The ManpowerGroup report reminds me of a similar report earlier this year, from PricewaterhouseCoopers (PwC), based on its survey of Millennial women. The firm surveyed 8,756 female Millennials from 75 countries concerning their views of work and their career. According to a report, “The Female Millennial—A new era of talent,” based on the survey’s findings, female Millennials are much more likely to believe they can reach the very top levels with their current employer, particularly those women starting their careers (49 percent of the respondents).

 

Several other results from the survey are noteworthy. For instance, the respondents are more confident about their careers and more ambitious than previous generations, according to the report authors. Indeed, 53 percent of the respondents say opportunities for career progression is the most attractive employer trait.

 

Perhaps more importantly, 43 percent of the respondents said they believe employers are too male biased when it comes to promoting employees from within—and that percentage is up 14 percent since 2011. Additionally, 71 percent of the survey respondents believe opportunities aren’t equal for all employees.

 

“Our research shows that when it comes to the female Millennial, we really are talking about a new era of female talent,” says Dennis Nally, chairman of PwC International. “Female Millennials are more highly educated and are entering the workforce in larger numbers than any of their previous generations. But, this is not the only thing that has changed. They also enter the workforce with a different career mindset.”

 

I’d like to know what you think of these surveys. Do you believe the Millennial generation will see gender parity? Also, do you believe the single most important step an organization can make to promote more women leaders is to create a gender-neutral culture, led by the CEO?

 

The International Robot Exhibition 2015 was held in Tokyo last week, and it—along with recent developments—has me thinking about the future of robots and artificial intelligence (AI), as well as what that means to humans.

 

First of all, Toyota announced it has plans to leverage its manufacturing expertise to become a leader in the field of what it calls “partner robots.” The company only has about 150 robotics engineers out of a worldwide staff of 300,000, but Toyota is investing heavily in research and development.

 

Last month, for instance, Toyota announced a $1 billion investment in a research company headed by robotics expert Gill Pratt to develop AI and robotics. It’s already working with Stanford University and the Massachusetts Institute of Technology on robotics.

 

We are preparing for a future in which people may not be able to drive cars, or they may need artificial intelligence to support them to drive, and once they get out of their cars, they may need help from partner robots,” Akifumi Tamaoki, general manager of Toyota’s partner robot division, said in an Associated Press interview.

 

Then again, one must wonder about the implications of continued research and development in robotics and AI. Noted theoretical physicist Stephen Hawking expressed concern about AI in a BBC News interview last year. While the early forms of AI developed so far have already proved very useful, Hawking said he fears the consequences of creating something that can match or surpass humans. The development of full AI “could spell the end of the human race,” Hawking said.

 

Elon Musk, Tesla Motors’ CEO, has publicly expressed similar thoughts. A host of scientists and entrepreneurs later expressed additional concerns in a letter, titled “Research Priorities for Robust and Beneficial Artificial Intelligence: an Open Letter” earlier this year.

 

It was interesting then to recently read that the University of Cambridge is launching a new research center, thanks to a $15 million grant from the Leverhulme Trust, to explore the opportunities and challenges to humanity stemming from the development of AI. The Leverhulme Centre for the Future of Intelligence brings together computer scientists, philosophers, social scientists and others to, as center directors explain, examine the technical, practical and philosophical questions AI raises for humanity.

 

“Machine intelligence will be one of the defining themes of our century, and the challenges of ensuring that we make good use of its opportunities are ones we all face together,” says Huw Price, the Bertrand Russell Professor of Philosophy at Cambridge and Director of the Centre. “At present, however, we have barely begun to consider its ramifications, good or bad.”

 

Dr Seán Ó hÉigeartaigh, Executive Director of the University’s Centre for the Study of Existential Risk (CSER), adds that the center is intended to build on CSER’s work on the risks posed by high-level AI and place those concerns in a broader context, “looking at themes such as different kinds of intelligence, responsible development of technology and issues surrounding autonomous weapons and drones.”

 

That’s an important point and a growing concern. Elon Musk, Apple co-founder Steve Wozniak, Google DeepMind chief executive Demis Hassabis and professor Hawking along with 1,000 notable AI and robotics researchers presented an open letter expressing those same concerns at the International Joint Conference on Artificial Intelligence in Buenos Aires last summer. That letter warns of a “military artificial intelligence arms race” and calls for a ban on “offensive autonomous weapons.” The issue, the letter explains, is that if one military power starts developing systems capable of selecting targets and operating autonomously without direct human control, it would lead to an arms race similar to the one for the atom bomb.

 

I don’t necessarily believe that the rise of AI will bring the fears of science fiction writer Philip K. Dick to life. Then again, as research continues on projects such as partner robots, “smart” weapons and self-driving cars, I do believe it’s a good idea to determine just what, exactly, is considered to be the responsible development of technology and AI.

 

What do you think about the future of AI?