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2018

It can be argued that, in some regards, Walmart and Amazon lead the way when it comes to testing applications for robots and drones.

 

Consider, for example, that every day, robots equipped with cameras move through some Walmart stores to scan aisles for out-of-stock items, products placed in the wrong shelf space, incorrect prices, and wrong or missing labels—and then alert human employees to the errors. Pilots worked out so well that Walmart has expanded its tests, and now uses the robots in 50 stores across four states, including Arkansas and California.

 

The robots, from fully autonomous robot manufacturer Bossa Nova Robotics, use artificial intelligence and machine learning to help identify stocking or pricing errors. They are capable of scanning dozens of aisles in under an hour, which enables employees to monitor inventory levels several times each day.

 

Critics of these robots, and other evolving technologies, fear they will eventually displace an inordinate number of human workers. Productivity, however, isn’t what Walmart has been focused on with the pilot program, according to the company’s vice president of innovation, John Crecelius. Use of the robots, which are often more efficient than employees performing similar tasks, is intended to free up workers’ time so they can use it to better help customers.

 

“This has largely been about how we improve our performance and improve our service to customers,” Crecelius told Business Insider.

 

One result is an improved ability to keep products in-stock by noticing more quickly when item inventory levels are running low. What’s more, during the initial testing phase, Walmart’s store employees found new uses for the robot that corporate hadn’t thought of, like using the information a robot compiles to realize certain items need to be immediately rushed from the delivery truck to store shelves, Crecelius says.

 

Meanwhile, the Washington Post reports that Amazon.com has been granted a new patent by the U.S. Patent and Trademark Office for a delivery drone which can respond to human gestures. The concept may help Amazon toward its goal to develop a fleet of unmanned aerial vehicles to deliver packages to customers in 30 minutes or less. The patent may help Amazon explore how flying robots might interact with human bystanders and customers waiting on their doorsteps.

 

According to the patent, the drone’s communication system would include an array of sensors, including a depth sensor and cameras, used to recognize human hand and body gestures, human voices and movement. Depending on a person’s gestures—a welcoming thumbs-up, shouting or frantic arm waving, for example—the drone can adjust its behavior, according to the patent. As described in the patent, the machine could release the heavily padded package it’s carrying, change its flight path to avoid crashing, ask humans a question or abort the delivery.

 

Among several illustrations in the design, a person is shown outside a home, flapping his arms in what Amazon describes as an “unwelcoming manner,” to showcase an example of someone driving away a drone flying overhead. A voice bubble comes out of the man’s mouth, depicting possible voice commands to the incoming machine.

 

“The human recipient and/or the other humans can communicate with the vehicle using human gestures to aid the vehicle along its path to the delivery location,” Amazon’s patent states.

 

Another diagram depicts the steps a drone would take when reading human body language as it delivers packages: “Receive human gesture”; “access gesture database”; “determine human gesture based on gesture database”; “proceed in accordance with determined human gesture and delivery instructions.”

 

What are your thoughts on increasing use of robots and drones? How do you see them being used in your supply chain, and how would they effect operations?

 

 

There has been considerable progress toward gender parity in the workplace. How women are treated in the workplace, however, remains a different story.

 

Consider, for instance, the results from a Pew Research Center survey, which show the gaps in perceptions about how women are treated in the workplace and how much attention is paid to increasing gender diversity. Most women who work in majority-female workplaces say women are usually treated fairly where they work when it comes to recruitment and hiring (79 percent) and in opportunities for promotion and advancement (70 percent). Smaller shares, but still majorities, of women who say their workplace is balanced in terms of gender say women are treated fairly in these areas.

 

Women who work in majority-male workplaces, on the other hand, have a different perception. Of the respondents indicating they work in a predominantly male workplace, only 48 percent say women are treated fairly when it comes to recruitment and hiring. Even fewer (38 percent) say women are treated fairly in promotions and advancement.

 

The survey—conducted between July and August last year—also found that of those women working where they are not equally represented in the workforce, they report they are more likely to be treated as incompetent (37 percent) and less likely to receive support from senior managers (24 percent). Even more troubling, while almost half (49 percent) of the women who say their workplace is mostly male say sexual harassment is a problem at work, 28 percent said they have experienced it first-hand.

 

It isn’t likely that the reported discrimination can be attributed to demographic differences between women in primarily-male and primarily-female workplaces, according to the Pew research, as all those surveyed were of a similar median age and comparable educational, racial and ethnic backgrounds. That then begs the question: What is the source of this gender inequality?

 

Ellyn Shook, Chief Leadership and Human Resources Officer at Accenture, says corporate culture may be one answer. For there to be true equality, company leaders need to set the standard and create an environment where it’s clear that people will be treated equally, she says in a recent Forbes article.

 

In the latest installment of Accenture’s “Getting to Equal” research—just one piece of the firm’s ongoing initiative to achieve a gender-balanced workforce by 2025—Shook and Accenture’s CEO for North America, Julie Sweet, surveyed more than 22,000 men and women from 34 countries. Their research identified 40 factors most prevalent in cultures of equality. These factors can be categorized into three areas, and when taken together, they nurture a culture of purpose, accountability, belonging, trust and flexibility, Shook and Sweet say.

 

Those categories are: bold leadership, identified by a diverse leadership team which sets, shares and measures equality targets openly; comprehensive action, identified by policies and practices that are family-friendly, support both genders and are bias-free in attracting and retaining people; and an empowering environment, identified when the organization trusts employees, respects individuals and offers freedom to be creative and to train and work flexibly.

 

When these dynamics are at work in an organization, the results are remarkable, Shook and Sweet say. For example, women in these workplaces are nine times less likely to experience sexual discrimination or harassment, and are 35 percent more likely to advance into management. From there, the probability of being promoted into more senior leadership roles increases fourfold.

 

“Doing one thing or even five things are important,” Shook says in the Forbes article. “But when you do the things that are most significant in the three categories, collectively, that’s when you see the real acceleration of change.”

 

What do you think about gender parity? Are women treated fairly in recruitment and hiring as well as in opportunities for promotion and advancement where you work?

Because blockchain maintains, records and authenticates data and transactions, it offers considerable potential as a means to improve security within pharmaceutical supply chains. Products are assigned unique identifiers which enable their entire history to be captured as they move to the end customer, and since stakeholders validate this information in real time, they would know if anyone tried to tamper with, alter or erase a record. This traceability, as two new studies show, could also be used to help prevent the flow of counterfeit medicines.

 

The first report, from DHL and Accenture, includes initial findings on a working prototype which tracks pharmaceuticals from the point of origin to the consumer, preventing tampering and errors. The companies created the blockchain-based serialization prototype with nodes in six geographies to track pharmaceuticals throughout the supply chain. The ledger tracking these medicines may be shared with stakeholders, including manufacturers, warehouses, distributors, pharmacies, hospitals and doctors. Lab-simulations show that blockchain could handle more than seven billion unique serial numbers and 1,500 transactions per second, the companies explain.

 

“We see especially exciting potential for blockchain in pharmaceuticals, which is why we focused our proof-of-concept with Accenture on the life sciences and healthcare industry,” says Keith Turner, CIO Chief Development Office, DHL Supply Chain. “By using the inherent irrefutability within blockchain technologies, we can make great strides in highlighting tampering—reducing the risk of counterfeits and actually saving lives.”

 

Another group working on a project to test the potential use of blockchain to “establish security and trust between trading partners” in U.S. pharmaceutical supply chains has also recently reported its first findings. The project—conducted by the Center for Supply Chain Studies—was created to establish the feasibility of incorporating blockchain into the Drug Supply Chain Security Act (DSCSA), which requires data to be generated on the movement of medicines from manufacturer to dispenser when it is fully implemented in 2023. It also will require the ability to share that data with other parties and authorized bodies. This interoperable tracking will be required at the package level, and existing advance shipping notices will likely become obsolete.

 

“We gained incredibly valuable data and insight from the simulated Reference Models we developed in Phase 1,” Bob Celeste, the center’s founder, says. “As an exploratory study, we experimented with the nuances of the supply chain, the DSCSA and blockchain to see how they may all fit together. The contribution of supply chain stakeholders and solution providers on the team created a rich environment that allowed us to test ideas and explore new ways to address drug traceability. Based on the success of Phase 1, it’s time to take these findings out of the virtual environment and show the industry and regulators that they may indeed hold up under real-world conditions.”

 

Using current blockchain technologies, database platforms and intelligence gleaned from “Phase 1”, the study, “DSCSA & Blockchain Phase 2: Proof of Concept”, will develop proof-of-concept pilots to demonstrate blockchain’s viability for the pharmaceuticals supply chain, Celeste says. Working scenarios include trading partner methods, data governance, data-persistence and other processes.

 

There is a clear need to address the problem of counterfeit medicine. According to Interpol, as many as one million lives are lost each year due to use of counterfeit medications, and it’s estimated that as much as up to 30 percent of pharmaceutical products sold in emerging markets are counterfeit. However, as DHL and Accenture note, moving from concepts and pilot applications to actually deploying viable solutions will require: the technology to be further developed, organizational transformation and a willingness among all stakeholders to collaborate. Success will depend on all parties working together, so it will be interesting to watch future tests and research.

 

What are your thoughts on the possible use of blockchain for the pharmaceutical supply chain?

Given its focus on innovation and a corresponding reliance on connected products, the manufacturing industry is particularly vulnerable to cyberattacks. As manufacturers increasingly connect more equipment and devices to the internet to compile and analyze data to make better business decisions, this growing connectivity also brings a higher risk of cyberattack. One of the risks is that a cyberattack on physical plant equipment could threaten worker safety as well as the integrity of the products being manufactured, which is of particular concern when the attack results in defects to products such as components for the automotive, aerospace and defense industries.

 

To help mitigate this risk, the Digital Manufacturing Design and Innovation Institute (DMDII) recently announced it is launching a “Cyber Hub for Manufacturing” using $750,000 in seed funding from the U.S. Department of Defense (DOD). The hub will serve as a “testbed” for the creation and adoption of new cybersecurity technologies to secure manufacturing shop floors across the U.S. It also complements DMDII’s public-private partnership as one of the Manufacturing USA institutes sponsored by DOD to advance the state-of-the-art in digital manufacturing in America.

 

“The Manufacturing USA Institutes were established with this type of initiative in mind,” says Tracy Frost, director of DOD Manufacturing Institutes and acting director of DOD Manufacturing Technology. “Applying the best ideas from the research and startup sectors to the real-world problems of industry—from component manufacturers to prime system integrators—helps secure the supply chain, and, ultimately, the warfighters who rely on these capabilities to achieve their missions.”

 

Small and medium-sized manufacturers (SMMs) are particularly vulnerable since their resources to address increasingly sophisticated cyberattacks aren’t as plentiful as their larger counterparts. At the same time, original equipment manufacturers (OEMs) are only as strong as the weakest link in their supply chains, which are often comprised of dozens of small suppliers, DMDII notes. Furthermore, U.S. companies are leading targets for cyberattacks: in 2015, nearly half of attacked manufacturers were in the U.S., with Italy in a distant second at one quarter, DMDII reports.

 

Research from Kaspersky Lab, working with Business Advantage, also determined that industrial cyber-risks and cybersecurity issues in an industrial control happen on a constant basis. More than half of the companies interviewed by the firm admitted they have experienced at least one incident in the last 12 months. These attacks also have a significant financial impact. For example, the average annual cumulative loss resulting from a cyberattack was $347,603, according to the research. That said, larger companies with 500+ employees reported annual cumulative losses of $497,097. What’s more, the majority of these larger companies (71 percent) report that they have experienced between two and five cybersecurity incidents in the last 12 months, creating even more financial impact.

 

DMDII will leverage its more than 300 partners across industry, academia and government—and its own in-house 24,000 square-foot manufacturing floor with wide-ranging capabilities—to test cybersecurity use cases in a real-world manufacturing environment. To address the acute challenge faced by SMMs, DMDII plans to develop cybersecurity workshops and online lessons for manufacturers, and will also build the cybersecurity infrastructure for the in-house assembly line the institute uses to test manufacturing processes. By adding software and hardware to its own line, the institute can teach manufacturers how they may mitigate the risk of cyberattack in their own plants.

 

What are your thoughts on cybersecurity in the manufacturing facility? Do you think your company and its suppliers can benefit from workshops and online lessons about mitigating the risk of cyberattacks in manufacturing plants?

There may be considerable interest in the digital transformation of supply chains, but the industry appears to remain firmly in the early stages of adoption. For example, just five percent of the respondents to a recent survey said their company is at a “transformation supply chain-wide level of application.”

 

Based on the survey results, a new report from logistics provider DHL—“Digitalization and the supply chain: Where are we and what’s next?”—explains that although new technologies and solutions are developing at a fast-pace and disrupting industries on multiple fronts, supply chains struggle to keep up. Nearly 350 supply chain and operations professionals from around the world in automotive, consumer, life sciences, technology, engineering and manufacturing took part in the survey. It is somewhat expected that 95 percent of respondents said their company is not fully capitalizing on the potential cost-reduction benefits for operations and supply chain strategies resulting from the use of next-generation robotics, artificial intelligence, blockchain, big data analytics, sensors and other technology.

 

All of this is not to say, of course, that supply chain and operations professionals aren’t investigating such technology—and predicting significant gains. Indeed, when respondents were asked about their expected top benefit from integrating physical technologies, 82 percent of the respondents said they anticipate reduced costs and improved profitability, while 77 percent said the same for analytics-based digitalization.

 

Technology adoption, however, certainly lags. The report notes that “businesses are beginning to test the waters,” with 39 percent of the respondents reporting their company is developing one or more information or analytics solution, but only 31 percent are doing the same for physical applications. The underlying reasons for the slow pace are symptomatic of traditional organizational change scenarios, the report explains. For hardware technology applications, 68 percent of the respondents said reliability was the main concern, while 65 percent reported a resistance to change in their organization, followed by concerns about insufficient or prolonged return on investment, cited by 64 percent of the respondents. Comparatively, for information and analytics solutions, 78 percent of the respondents reported that organizational siloes and legacy systems were the top impediments, followed by a lack of specialized talent expertise, cited by 70 percent of the respondents.

 

“This is a transformative juncture for the supply chain industry,” says José F. Nava, chief development officer, DHL Supply Chain. “The traditional model faces unprecedented levels of disruption from new hardware technologies combined with information and analytics solutions. Technology offers considerable opportunity to reduce cost and improve profitability, but it also means businesses which fail to adapt risk getting left behind. It’s vital for companies to digitalize processes to meet an ever-increasing demand to drive efficiency and flexibility, and improve the customer experience.”

 

Interestingly, the report explains that survey respondents ranked big data analytics as the most important information solution, with 73 percent reporting that their company was investing in this technology—ahead of cloud-based applications (63 percent), the Internet of Things (54 percent), blockchain (51 percent) and machine learning (46 percent). On the other hand, importance in physical hardware has focused on robotics, with 63 percent of the respondents ranking it as the most important physical technology—considerably ahead of 3D printing at 33 percent, and augmented reality and drones at 28 percent.

 

What are your thoughts on the digital transformation of supply chains? Is your company undertaking this initiative? If so, what do you think the largest benefit will be?

Cost reduction continues to be the top priority for procurement leaders, cited by 78 percent of the respondents to a new survey. New products/market development (58 percent) and managing risks (54 percent) are the second and third key business strategies cited by the respondents.

 

More than 500 procurement leaders from 39 countries representing organizations with a combined annual turnover of $5.5 trillion took part in the survey, “The Global Chief Procurement Officer Survey 2018.” Deloitte conducts the survey annually to gather insight into the key themes and challenges facing procurement, including market dynamics, value and collaboration, talent and leadership, and digital procurement.

 

Procurement leaders are continuing to expand the role of procurement in the wider supply chain. This is being achieved through better alignment between procurement and business strategies and priorities, adopting a closed loop and holistic approach to performance measurement for procurement and proactive involvement in key decision making. For example, consolidating spend (37 percent), reducing total life cycle/ownership costs (32 percent) and increasing competition (31 percent) are the key procurement strategies cited by respondents as a means to deliver value.

 

On the other hand, over the past few years, fewer procurement leaders seem to have used supplier collaboration as a procurement strategy for delivering greater value—indicating a continued focus on more tactical levers to support the achievement of procurement strategies. Indeed, only 23 percent of procurement leaders in 2018 plan to increase the level of supplier collaboration as a lever to deliver value, a decrease from 26 percent last year and 39 percent in 2016.

 

A surprising—and perhaps somewhat worrying—finding from this year’s survey is that 65 percent of procurement leaders say they have limited or no visibility beyond their Tier 1 suppliers. This has major implications for organizations across all industries, particularly for meeting regulatory and corporate social responsibility requirements, and for the identification and mitigation of supply chain risks. It’s worth noting, however, as the report points out, high performers are two-and-a-half times more likely than their peers to have full supply chain transparency.

 

Finally, a clear imperative for procurement leaders at high performing organizations is to lead the procurement, business, supplier and digital agenda, according to the report. Surprisingly, only 49 percent of the procurement leaders said they believe their current teams have sufficient levels of skills and capabilities to deliver their procurement strategy. Although this is the highest level of confidence shown by procurement leaders in their teams since 2013, it’s still a low figure.

 

I was interested to also read that spending on talent development has also fallen, with 72 percent of procurement leaders saying they spend less than two percent of their operating budgets on training and development programs for their teams, compared to 66 percent last year. Survey results for recruiting and training talent paint a similar picture. While sources of talent recruitment are broadly unchanged since last year, 47 percent of procurement leaders said it has become more difficult to attract talent in the last 12 months.

 

The report recommends a number of courses to address procurement challenges but I was particularly intrigued by its recommendations for improving talent management and leadership. For example, Deloitte recommends companies develop and implement a talent strategy and plan; accelerate development of leadership in procurement and at suppliers; and invest in training and new skill development. The report also recommends that companies establish or join collaboration networks with suppliers and other subject matter experts.

 

  What are your thoughts on procurement’s role in the supply chain? Do you believe your company’s procurement team has the necessary skills and capabilities to deliver their procurement strategy?

Governments and companies should do more to attract and retain women and people from other underrepresented groups to science-related fields, according to a new report co-authored by General Motors Co. Chairman and CEO Mary Barra and Linamar Corp. Chief Executive Officer Linda Hasenfratz.

 

“To leverage the widest possible range of ideas and creativity, we must tap into the entire population in all its diversity,” Barra and Linamar write in “Increasing the Number of Women in STEM,” released yesterday on International Women’s Day, by the Canada-United States Council for Advancement of Women Entrepreneurs and Business Leaders. “If half the population is not playing its full role in ground-breaking fields such as artificial intelligence, self-driving vehicles, advanced materials and 3D printing, we face a grave risk of debilitating labor shortages and, as a result, slower growth for the entire economy.”

 

In the U.S., 50 percent of middle school girls say they’re interested in computer science, but by high school, less than two percent of young women plan to major in computer science, Barra says. These girls need a path, they need support and they need more role models, she continues. As industries continue to transform, improving access to STEM education isn’t only crucial to the ability to innovate, it helps communities attract and keep good jobs that will drive the future, she says.

 

“Further increasing women in STEM studies and careers is critical to fully harness the potential of 100 percent of our population,” says Hasenfratz. “STEM grads have proven to be great entrepreneurs, starting businesses that employ thousands of people which every economy needs more of. STEM grads are also desperately needed in many existing organizations as well, as they transition through innovation to increasingly sophisticated technical solutions to many tasks.”

 

An education in STEM is one of the most effective tools for launching new businesses, and extensive research has proven the economic advantage of a diverse workforce. While more women are studying and launching successful careers in STEM fields, they still aren’t at parity with their male counterparts in many areas, Barra and Hasenfratz write. Key barriers affecting women’s interest in and pursuit of STEM careers include: conscious and unconscious biases; lack of awareness regarding STEM programs and opportunities; and limited access to female STEM role models and professional mentors, they continue.

 

To overcome these hurdles, the Council has made recommendations across four categories. First, across all four categories, the Council recommends that the Canadian and U.S. governments develop a public-private partnership to create an online STEM portal for teachers, students, parents and businesses which hosts information on STEM career paths, programs and learning tools, and features role models and successful case studies to inspire and motivate. The four recommendation categories are: Communicate and educate, identify and share tool, identify and promote programs, and mentor and empower women in STEM.

 

Within these categories, the Council’s research-based recommendations include:

  • Expand school curricula to include more STEM topics in courses designed to be engaging, and build confidence and increase academic outreach to women,
  • Rethink the approach to post-secondary STEM education through program design, faculty makeup, admission requirements and recruitment efforts,
  • Encourage companies to develop STEM outreach programs and partnerships with academic institutions,
  • Recommend that STEM-centered organizations set participation goals for under-represented minorities broadly, and that corporate partners request this information,
  • Strengthen training to address conscious and unconscious biases, and
  • Develop formal corporate and academic mentorship, role model and retention programs.

 

What are your thoughts on women in STEM fields? Does your company have STEM outreach programs and partnerships with academic institutions? If not, are you aware of any programs at academic institutions in your community?

 

 

When it comes to managing sustainability in their supply chains and evaluating how mature they are in their approach, 50 percent of the respondents to a recent survey rated their employers as beginners at managing sustainability.

 

More than 1,400 professionals from Europe, Asia and America responded to the survey, conducted by quality assurance and risk management firm DNV GL, with support from research and analytics firm GFK Eurisko and Supplier Ethical Data Exchange, a not-for-profit organization which operates a collaborative platform for sharing responsible sourcing data on supply chains. The survey identifies a set of front-running companies, defined as “Leaders,” which have a more structured approach to sustainability in their supply chain than their counterparts. These companies, mainly large, international companies, “stand out as they are managing their supply chain with a strategic approach, penetrating all tiers of their value chains with a holistic and structured approach,” the resulting report explains.

 

For example, these leading companies involve third parties to a much higher extent than other companies when auditing suppliers against their own protocols or recognized methodologies, and 30 percent of them say they provide suppliers with dedicated training, the report explains. By implementing sustainability in their supply chain, they say they have gained brand reputation (cited by 65 percent of the leading respondents), improved their ability to meet customer needs (cited by 58 percent) and increased market share (32 percent).

 

“Building sustainable supply chains is no longer a voluntary initiative based on unstructured attempts,” says Luca Crisciotti, CEO of DNV GL–Business Assurance. “Companies which have experienced positive effects from their actions have adopted a more systematic approach. Those able to tackle it in a strategic and holistic way can manage their risks better and reap benefits, while responding to legislative, stakeholder and global demands.”

 

Overall, 86 percent of the survey respondents said their company experiences greater pressure to show it has a sustainable supply chain today, than in 2014. Interestingly, 76 percent of the respondents said customers are the main driver influencing sustainable supply chain management. Nevertheless, pressure also comes from multiple direct and indirect stakeholders. Indeed, respondents said companies today are expected to proactively manage all tiers of their supply chain—and to do so in a way that contributes to the world’s sustainability goals.

 

I was also interested to read that while 81 percent of the respondents said their company has taken at least one action to improve supply chain sustainability, those actions were mainly self-conducted and limited to “Tier 1” suppliers—and fewer actions were taken further out in the value chain. Furthermore, 39 percent of the respondents said their company has conducted a direct audit of some suppliers, 36 percent have required suppliers to provide information, and 32 percent have either had a dialogue with suppliers to address the challenges or implemented a sustainability policy. Perhaps not surprisingly, only seven percent of the survey respondents said their company has have reached out to all tiers of its supply chain.

 

“Managing risks across the entire supply chain can be challenging and requires the collection of supplier performance data to efficiently create visibility further down the value chain,” says Crisciotti. “However, companies can leverage advancements in big data analytics, data sharing platforms and blockchain technology to help collect and measure supplier performance in a structured and reliable way.”

 

What are your thoughts on managing sustainability? Has your company taken actions to improve sustainability within the supply chain?