Skip navigation
2018

McDonalds recently announced it will stop using plastic foam cups and also plans to eliminate foam packaging from its global system by the end of 2018, but the eco news that really caught my attention came from Coca-Cola Company. The beverage giant recently announced a goal to collect and recycle the equivalent of every bottle or can it sells globally by 2030. The company and its global network of bottling partners will tackle the ambitious goal, which is part of a holistic plan it calls “World Without Waste,” through a renewed focus on the entire packaging lifecycle—from how bottles and cans are designed and made, to how they’re recycled and repurposed.

 

“Consumers around the world care about our planet,” says James Quincey, president and CEO, The Coca-Cola Company. “They want and expect companies like ours to be leaders and help make a litter-free world possible. Through our ‘World Without Waste’ vision, we’re investing in our planet and in our packaging to help make the world’s packaging problem a thing of the past. This vision is the next step in our broader strategy to grow with conscience by doing business the right way, not just the easy way.”

 

There are two parts to Coca-Cola’s recycling strategy. The first is to use its global marketing power to help educate the public on “what, how and where” to recycle. The company says it will also continue to team with local communities, NGOs, industry peers and consumers to help make recycling easier and more accessible for everyone by improving local recycling systems and driving policy change that supports a truly circular economy.

 

This move is a continuation of on-going efforts. For example, in 2002, Coca-Cola bottlers in Mexico joined the country’s plastics industry, and leaders from other industries, to create Ecology and Corporate Commitment, a nonprofit organization dedicated to encouraging a culture of recycling, and also funded the creation of two food-grade PET plastic recycling facilities. These investments are paying off: In 2016, Mexico recycled 57 percent of the PET plastic it produced (up from nine percent in 2002), making it the leading country globally for PET recycling, according to Coca-Cola.

 

The second part of the company’s recycling initiative is for Coca-Cola to continue its work toward making all of its packaging 100 percent recyclable globally, Quincey explains. For example, the company is building better bottles, whether through more recycled content, by developing plant-based resins, or by reducing the amount of plastic in each container, he says. By 2030, the Coca-Cola system also aims to make bottles with an average of 50 percent recycled content, Quincey says.

 

For instance, in 2009 Coca-Cola introduced fully recyclable PlantBottle packaging made from up to 30 percent plant-based materials. Traditional PET plastic is made using fossil fuels such as petroleum. PlantBottle, on the other hand, is made with a combination of traditional materials and material made from plants. The end product is still PET plastic, so the PlantBottle package delivers the same performance—e.g., shelf life, recyclability, weight, chemical composition and appearance—but it reduces potential carbon dioxide emissions from PET plastic bottles and dependence on fossil fuels when compared to traditional PET plastic, according to Coca-Cola.

 

“We believe every package, regardless of where it comes from, has value and life beyond its initial use,” Quincey says. “If something can be recycled, it should be recycled, so we want to help people everywhere understand how to do their part.”

 

What are your thoughts on Coca-Cola’s recycling strategy? What impact do you think it will have? Secondly, does your company have an active recycling strategy?

The rise of automation won’t significantly diminish jobs in the U.S., and the country will “double down” on retraining efforts to help workers who have been displaced by robots, U.S. Commerce Secretary Wilbur Ross said this week at the World Economic Forum in Switzerland.

 

“Technology doesn’t just shrink jobs,” Ross told reporters. “It changes the nature of jobs.”

 

In a similar vein, the news at WEF I found most interesting is that Accenture, CA Technologies, Cisco, Cognizant, Hewlett Packard Enterprise (HPE), Infosys, Pegasystems,  PwC, Salesforce, SAP and Tata Consultancy Services announced a joint mission to “reskill” a million workers worldwide over the next three years.

 

“All over the world, people are asking themselves how they are going to prepare for their future, whether it’s a new job, new responsibilities or needed new skills,” Robert E. Moritz, Global Chairman, PwC International, PwC, said in a statement. “By working together across the public and private sectors, our hope is to enable new opportunities for people to carve their own paths, develop new skills and future-proof themselves.”

 

The joint project is part of WEF’s IT Industry Skills Initiative to meet the global skills gap challenge and address job displacement arising from automation and the so-called Fourth Industrial Revolution. The goal is to provide one million people with resources and training opportunities on the SkillSETportal by January 2021.

 

The initiative comes at an opportune time, because, according to a WEF report on workforce reskilling, one in four adults have reported a mismatch between the skills they have and the skills they need for their current job. Therefore, enabling and empowering workers to transform and update their skills is a key concern for businesses and societies around the world.

 

“In our dynamic world, technology has opened up many avenues for growth, however, we’re also seeing how innovations such as artificial intelligence and automation can impact the workforce,” Chuck Robbins, Chairman and CEO, Cisco, and Chair of the Forum’s IT Governors community, said at the conference. “It’s important for all of us to recognize that without the talent we need, none of us would be successful. This initiative brings together the capabilities and strengths of all of our companies to help educate the high-skilled workers needed for jobs now and into the future. It’s our obligation to make sure that people with jobs across every industry are given the means to learn new skills and remain competitive.”

 

Essentially, the coalition created a free platform of online tools to streamline the process of reskilling. To address fast-changing skill requirements, initiative partner companies are providing key elements of their individual training libraries for one centralized portal. Consequently, users will have free access to current self-paced training materials from global IT companies—ranging from general business skills to introductory digital literacy, and including more advanced subjects such as cybersecurity, big data or Internet of Things. The portal will offer a tailored Skills Assessment, developed by PwC and based on the Fourth Industrial Revolution skills research, to help users determine which coursework and/or learning pathways best fit their current skillset and learning goals, the coalition reports.

 

“People need innovative ways to learn new skills to remain relevant and adaptive as the pace of technology change accelerates,” Pierre Nanterme, Chairman and Chief Executive Officer, Accenture, said in a statement. “For example, AI offers enormous opportunities for growth, but success will increasingly depend on humans collaborating with intelligent technologies. By accessing a broad range of ‘new skilling’ techniques, people will be better placed to work with machines and help businesses pivot to new growth models.”

 

What are your thoughts on reskilling? Do you believe there is a mismatch between your skillset and the skills needed for your job? Also, would you use an online portal to access training libraries?

Danish shipping conglomerate A.P Moller–Maersk and IBM have been working together to build new blockchain- and cloud-based technologies for roughly 18 months. Since then, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, and U.S. Customs and Border Protection.

 

IBM and Maersk have now formally announced they will establish a joint venture to provide more efficient and secure methods for conducting global trade using blockchain technology. The companies add that the digitization platform, built on open standards and designed for use by the entire global shipping ecosystem, will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.

 

The joint venture enables IBM and Maersk to commercialize and scale their solutions for a broader group of global corporations, many of whom have already expressed interest in the capabilities and are exploring ways to use the new platform, including General Motors and Procter and Gamble to streamline the complex supply chains they operate, and freight forwarder and logistic company Agility Logistics to improve customer services such as customs clearance brokerage.

 

Additional customs and government authorities, including Singapore Customs and Peruvian Customs, have also expressed interest in exploring possible collaboration with the platform to streamline trade flow and enhance supply chain security, IBM reports. Global terminal operators APM Terminals and PSA International also expressed interest in using the platform to increase port collaboration and improve terminal planning. IBM also notes that with support from Guangdong Inspection and Quarantine Bureau—by connecting to its Global Quality Traceability System for import and export goods—the platform may also link users to important trade corridors in and out of China.

 

“Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes,” says Michael J. White, former president of Maersk Line in North America, and CEO of the new company. “The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardizing information flows using digital solutions.”

 

Initial plans call for the new company to commercialize two core capabilities for digitizing the global supply chain from end-to-end. The first, IBM explains, is a shipping information pipeline to deliver end-to-end supply chain visibility so all supply chain partners can securely and seamlessly exchange information about shipment events in real time. Secondly, use of paperless trade will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries—ultimately helping to reduce the time and cost for clearance and cargo movement. Blockchain-based smart contracts ensure all required approvals are in place, helping speed up approvals and reducing mistakes, IBM notes.

 

“The big thing that’s missing from this industry to digitize and unleash the potential of the technology is really to create a form of utility that brings standards across the entire ecosystem,” Maersk’s Chief Commercial Officer Vincent Clerc said in an interview with Reuters. This solution will help manage and track tens of millions of shipping containers globally by digitizing the supply chain process from end to end, he explains.

 

Documentation and bureaucracy have been estimated to account for as much as a fifth of the total cost of moving a container. What are your thoughts on the use of blockchain to streamline this process? Secondly, what impact would visibility of goods as they cross borders and trade zones have on company’s supply chain?

 

 

 

Discussions about artificial intelligence (AI) inevitably turn to how many jobs the technology will take away from humans. Although some industries, such as manufacturing, will see considerable job loss, starting in 2020, AI-related job creation will cross into positive territory—reaching two million net-new jobs in 2025, according to research from Gartner.

 

“Many significant innovations in the past have been associated with a transition period of temporary job loss, followed by recovery, then business transformation—and AI will likely follow this route,” says Svetlana Sicular, research vice president at Gartner. “Unfortunately, most calamitous warnings of job losses confuse AI with automation, which overshadows the greatest AI benefit: AI augmentation. This augmentation is a combination of human employees and AI intelligence, where both complement each other.”

 

On the one hand, use of AI will indeed eliminate some middle- and low-level positions, to be sure, but it will also improve the productivity of many jobs, and as Gartner notes, create millions of new positions of highly skilled, management and even entry-level and low-skill level jobs. Consequently, the onus is now on IT leaders to not only focus on the projected net increase of jobs, but with each investment in AI-enabled technologies, they must take into consideration which jobs will be lost, which jobs will be created, and how this evolution will transform how workers collaborate with others, make decisions and get work done, Sicular says.

 

“This is the time to really impact your long-term AI direction,” Sicular says. “For the greatest value, focus on augmenting people with AI to enrich people’s jobs, re-imagine old tasks and create new industries. This also is the time to transform your culture to make it rapidly adaptable to AI-related opportunities or threats.”

 

For example, AI applied to non-routine work that is more varied due to lower repeatability is more likely to assist humans than replace them because combinations of humans and AI will perform more effectively than either human experts or AI-driven machines working alone. Gartner forecasts that by 2022, one in five workers engaged in mostly non-routine tasks will rely, in some part, on AI.

 

“Using AI to auto-generate a weekly status report or pick the top five emails in your inbox doesn’t have the same ‘wow’ factor as, say, curing a disease would, which is why these near-term, practical uses go unnoticed,” says Craig Roth, research vice president at Gartner. “Companies are just beginning to seize the opportunity to improve non-routine work through AI by applying it to general-purpose tools. Once knowledge workers incorporate AI into their work processes as a virtual secretary or intern, robo-employees will become a competitive necessity.”

 

What are your thoughts on AI augmentation? In particular, how do you think AI can be leveraged to improve the speed, accuracy and efficiency of your existing supply chain

planning processes? Secondly, what impact do you think use of AI will have on the ability to address complex sourcing issues?

In a move to address the aviation industry’s requirement for more capacity in aircraft seating manufacturing, superior product quality and reliable on-time performance, Boeing and global automotive seat manufacturer Adient announced they are forming Adient Aerospace. The joint venture will develop, manufacture and sell a portfolio of seats to airlines and aircraft leasing companies—both for new planes and as retrofit configurations for planes made by Boeing as well as other commercial airplane manufacturers.

 

“Seats have been a persistent challenge for our customers, the industry and Boeing, and we are taking action to help address constraints in the market,” says Kevin Schemm, senior vice president of Supply Chain Management, Finance & Business Operations and chief financial officer for Boeing Commercial Airplanes.

 

Aircraft interior production issues, and congestion in cabin supply manufacturing in particular, have increasingly led to late airplane deliveries over the past two years. Vertical Research Partners analyst Rob Stallard explains that these delays can cost airplane manufacturers $100,000 a day, which makes solving the bottlenecks in aircraft seating a top industry priority.

 

Traditionally, aircraft seat makers such as B/E Aerospace and Zodiac Aerospace sell seats directly to airlines, a process which may involve multiple customized designs and regulatory approvals, and potentially lead in turn to industrial delays. Schemm at Boeing notes that this joint venture “supports Boeing’s vertical integration strategy to develop in-house capabilities and depth in key areas to offer better products, grow services and generate higher lifecycle value.”

 

By sourcing its own seats along with other aircraft components, Boeing stands to gain greater control over quality, intellectual property and high-margin aftermarket sales—a chief source of profit for aerospace suppliers. Transitioning from a global outsourcing approach to an increasing degree of vertical integration. In recent years, Boeing has expanded its reach into avionics, additive manufacturing, actuators and engine covers.

 

One drawback to creating the joint venture is that it risks adding tension to what may sometimes be anxious relationships between Boeing and some of its largest suppliers. However, it’s worth noting that there has been an on-going shifting dynamic in the aviation supplier ecosystem. For instance, Safran SA, which makes engines for Boeing’s 737 Max through a joint venture with General Electric, is taking over Zodiac, Bloomberg reports. What’s more, Rockwell Collins, a long-time supplier of radio and flight displays to Boeing, last year bought B/E Aerospace, the largest cabin-equipment supplier. United Technologies then struck a deal to acquire Rockwell, a deal aimed at gaining bargaining clout with Boeing and rival Airbus SE, Bloomberg notes.

 

Then again, with 86,000 employees at more than 230 plants in 33 countries, Adient—itself a spinoff from Johnson Controls—sees itself as a potential “disruptor” in the aircraft seating industry, Mark Oswald, Adient’s vice president of investor relations, said at an aerospace conference last fall.

 

“The customers aren’t excited about the current supply base,” Oswald said, Bloomberg reports. When Adient was approached about the joint venture with Boeing, a board member “was very influential” in spurring it to look at the opportunity, he said.

 

Whether you are in the aerospace industry or not, what are your thoughts on vertical integration to develop in-house capabilities as a means to eliminate industry constraints?

You may have seen news this week that Toyota and Mazda announced they will build a $1.6 billion joint assembly plant in Alabama, employing as many as 4,000 workers. The plant, which will be roughly 14 miles from Toyota’s engine plant in Huntsville, is expected to produce 300,000 vehicles annually. Toyota plans to build Corolla cars at the plant, while Mazda will build crossover SUVs.

 

The location wasn’t a complete surprise. When the two companies agreed last summer to form an alliance and establish a joint-venture plant, many industry observers speculated the new plant may be located near an existing facility, especially since it would provide an opportunity to leverage a pre-existing supplier network, along with a labor force and government incentives. Toyota has 10 U.S. plants in an arc running from West Virginia through Indiana and Kentucky, and continuing across Alabama, Mississippi and Texas.

 

The total incentives package that helped Alabama land the Toyota-Mazda automotive plant is expected to be between $800 and $900 million, according to Huntsville Mayor Tommy Battle, AL.com reports. However, the numbers remain somewhat fluid as various government entities work to get formal approval for the aid they plan to provide, and some incentives, such as from the Tennessee Valley Authority, are unknown.

 

“Incentives are the icing, but they aren’t the cake,” Chip Cherry, president and CEO of the Huntsville-Madison County Chamber of Commerce, says in the AL.com story. “From a company’s perspective, what makes a deal work or not work is can you get it to market on time? Will we be able to ramp up? Will they be our partners when the unforeseen issues pop up? We had the added benefit of having a history with Toyota of being able to solve problems when things pop up. The reality of a relationship is something is going to go wrong. They had to have faith that that something is going to be solved in a partnership with them.”

 

It’s also worth noting that Alabama is already home to 150 automotive companies and suppliers, providing more than 50,000 auto-related jobs, so there is a workforce well-versed in the automotive industry. What’s more, Huntsville lies close to existing auto suppliers in Tennessee, 21 miles from Toyota’s engine plant—which is currently undergoing a $106 million expansion—and isn’t far from the company’s plant in Mississippi.

 

Indeed, Alabama has become a hot bed of sorts for automotive production over the past 20 years or so. Made in Alabama explains that together, assembly plants operated by Mercedes, Honda and Hyundai in Alabama produced more than one million cars and light trucks, and set a record annual production tally. Toyota, Honda and Hyundai also produced nearly 1.7 million engines in 2016. Furthermore, vehicles have become Alabama’s top export, with shipments to more than 85 nations around the world every year.

 

It also helps that training programs from AIDT (Alabama’s workforce training agency) and others prepare a skilled workforce for the auto industry. Partners in the state’s automotive training program include the Alabama Community College System and the Alabama Robotics and Technology Park near Decatur, where technicians learn how to operate advanced robots and automation processes in a unique facility.

 

The result is that Alabama is already the fifth largest producer of cars and light trucks. Once the Toyota-Mazda factory begins output, the state is expected to pass Kentucky and become the South’s largest automaker, according to a forecast from IHS Markit. The following year, it is expected to edge out Indiana to become the state with the second largest automotive production, behind Michigan.

 

What are your thoughts on locating factories near existing supply chain networks? Secondly, how important are incentives in enticing a company to build a plant?

As the flu season picks up, it’s troubling to read how hospitals across the U.S. are forced to deal with the nationwide intravenous (IV) bag shortage.

 

The problem is that when Hurricane Maria slammed into Puerto Rico last September, it forced the temporary shutdown of Baxter International’s manufacturing plants. Baxter produces more than 43 percent of the U.S.’ IV bags.

 

Puerto Rico’s power grid is being slowly restored and the last of three Baxter factories there that make saline bags and nutrient solutions was reconnected just before Christmas. Baxter, in a statement, said the plants are “making progress on the road to a full recovery” of operations and the company expects “to return to more normal supply levels for products made in Puerto Rico in the coming weeks.” The U.S. Food and Drug Administration said in a statement it believes shortages will start to ease over the next few weeks, but it cautioned that “the production situation in Puerto Rico remains fragile.”

 

Nonetheless, many hospitals are only getting half or two-thirds of what they order, and typically have only a few days’ worth of saline on their shelves. Erin Fox, who tracks nationwide drug shortages and heads the University of Utah health system’s drug information and support services, told the Associated Press its hospital system now has five to eight pharmacists a day working on nothing but managing shortages.

 

The worst shortage is for small saline bags. Hospitals use hundreds—or possibly thousands—of the IV bags daily to hydrate patients and to dilute antibiotics, painkillers and other drugs, then hang the bags from a pole so the mix slowly drips through a tube and into a patient's vein. Deliveries of those bags have been most unpredictable, David Chen, a pharmacy director with Promedica, which operates 13 hospitals in Ohio and Michigan, says in the AP story.

 

“Some facilities are getting virtually zero,” Chen says. “Other are having them trickle in. You never know what you’re going to get.”

 

Health leaders are pressing federal regulators and Congress to adopt new measures aimed at ensuring a steady supply of critical treatment products. For example, groups such as the American Hospital Association, American Society of Anesthesiologists and American Society of Clinical Oncology are urging Congress to examine whether it’s acceptable that some medications are allowed to be made at a single plant, according to a letter to some lawmakers, a Wall Street Journal article reports. They also are pushing to get regulators more information about the cause of shortages and congressional incentives to get more manufacturers involved in producing specific critical products—such as IV saline and drugs.

 

In the meantime, the IV bag shortage remains acute, as the Centers for Disease Control and Prevention reports the flu is widespread in 46 states, which puts this year on par with 2014-2015, which was the most severe flu season in recent years. Consequently, hospital officials, pharmacists and other staff have been devising alternatives and workarounds, training doctors and nurses on new procedures and options, and working the phones to try to contact secondary suppliers.

 

In the intensive care unit at Massachusetts General Hospital, nurses are using Gatorade to combat dehydration among patients, CBS News reports. The process takes four times as long as treatment that is normally delivered intravenously.

 

Shortages are also hitting surgery centers, cancer clinics that infuse chemotherapy, dialysis centers and companies that provide regular infusions to home-bound patients. For example, although nutrient solution bags are needed for far fewer patients than saline, supplies are running low and there are few substitutes, Connie Sullivan, head of research and innovation at the National Home Infusion Association, says in the AP story. As a result, association members have been swapping products with other infusion services and even limiting the number of new patients they accept, she says.

 

“I have never seen anything quite this bad,” Sullivan says.

 

What are your thoughts on shortages of critical medical products and drugs? Would government incentives entice manufacturers to produce these products?

Jim Fulcher

Blockchain growth

Posted by Jim Fulcher Jan 9, 2018

I was interested to read recently that IBM and Comcast’s venture arm will become the largest supporters of an investment fund for startups, which will help Fortune 500 corporations use blockchain. The startup accelerator, called MState, plans to invest $25,000 to $50,000 apiece in five or six blockchain companies over the next six months. Comcast Ventures will provide funding, while IBM will supply support services to the MState startups. The other backing company is Galvanize, a technology incubator, venture fund and coding school with U.S. campuses.

 

“The first wave of killer apps built on blockchain are already growing explosively,” says MState Co-Founder and CEO Rob Bailey. “Cryptocurrencies built on blockchain like Bitcoin, Bitcoin Cash, Ethereum and Litecoin have collectively surged past $500B in market valuation. In 2018, we’ll see a growing number of enterprise blockchain use cases go mainstream, from healthcare applications to government, supply chain and retail to the real estate and transportation industries. But for most of these use cases to succeed, blockchain start-ups need to be able to engage well with enterprise customers.”

 

Companies funded by MState will be earlier in their development than the startups typically backed by IBM and Comcast, Bailey says. IBM was among the first large companies to embrace blockchain, deploying it internally and helping clients test and implement applications. Comcast is working to use the blockchain to improve the efficiency of video advertising.

 

“It’s complementing our strategy,” Janine Grasso, vice president for blockchain strategy and ecosystem development at IBM, said in a phone interview with Bloomberg. IBM may also end up helping entrepreneurs who don’t make the cut for MState, she said.

 

MState will run a six-month program at Galvanize offices in New York and San Francisco focusing on helping technical founders with all aspects of their go-to-market strategy, including product development, team building, sales, marketing, finance, business development and customer support, Baily says. A core focus will be helping start-ups in the program engage successfully with prospective enterprise customers and partners. Key to this is that MState has already built a network of 30 advisors, which include five founders who have successfully built billion-dollar tech companies, as well as a team of 25 CMOs, COOs and CROs, he adds.

 

The growth lab will invest in all of the companies in its program and has already made its first investment in Blockdaemon, a blockchain deployment platform. Blockdaemon helps companies roll out blockchain applications faster by letting them deploy and manage network nodes.

 

“There’s a massive [blockchain] opportunity in Fortune 500 companies,” Bailey says. “They don’t know which companies to work with.”

 

There, indeed, is growing interest among those companies in blockchain technology. For example, according to research last summer by Juniper Research, nearly 60 percent of large corporations are either actively considering, or are in the process of, deploying blockchain technology. Of the respondents from companies which have already reached the proof of concept stage, 66 percent say their company expects blockchain to be integrated into their systems by the end of 2018. Furthermore, among respondents who were prepared to state their organization’s level of investment in blockchain, 67 percent said the company had already invested more than $100,000 by the end of 2016, while 91 percent confirmed the company would be spending at least this amount in 2017.

 

What are your thoughts on blockchain? Is your company deploying—or actively considering deploying—the technology?