Archives for March 2015

Will smart robots take your job?

By Mitch Mac Donald | March 30, 2015 | 3:04 AM | Categories: Lift Trucks, Material Handling, Warehousing

Technology in logistics is replacing jobs traditionally done by humans, the trend and will continue at a record pace for the foreseeable future. Many have grown accustomed to seeing this kind of thing in certain industries like manufacturing, healthcare, and logistics. But now, according Professor Edward D. Hess of the University of Virginia's Darden Graduate School of Business, technology will be coming for white collar jobs, too.

"Technology will be replacing more jobs at an ever-increasing pace, particularly with this next round of technology, which includes artificial intelligence. AI is the game changer," says Hess, author of a new book Learn or Die: Using Science to Build a Leading-Edge Learning Organization (Columbia Business School Publishing, 2014, ISBN: 978-0-231-17024-6, www.EDHLTD.com). "It is the biggest discovery since fire! It effectively threatens to wipe out a whole new group of jobs, including white collar positions."

His assertions are supported by a recent University of Oxford study that found over the next 10 to 20 years, of full two-thirds of U.S. employees have a medium-to-high risk of being displaced by smart robots and machines powered by artificial intelligence.

So, what can you do to keep your job?

"When the AI tech tsunami hits, the only jobs that will be safe are the ones that require a human element,” says Hess. “The things that humans will be able to do better than robots is creative, innovative, and complex critical thinking and engaging emotionally with other humans. You must take up your skills in these areas in order to make yourself more irreplaceable."

His advice on the skills sets that will strengthen employability in the rise of smart machines include:

  • Overcome cognitive blindness. Humans have a problem when competing with smart machines. We are lazy, sub-optimal thinkers, Hess says. We seek to confirm what we already believe, and we tend not to be open-minded or rational. We take what we already know, replicate it, improve it, and repeat. It is easier than thinking critically or innovatively, but it makes us cognitively blind. You can overcome your cognitive blindness by strengthening your critical thinking.
  • Get good at not knowing. We have to change our mindset about what being smart really is. In the technology-enabled world, how much you know will be irrelevant, because smart machines and the Internet will always know more than you. What will be more important is knowing what you don't know and knowing how to use best learning processes—in other words, the smartest people will be focused on continuously learning.
  • "Quiet your ego," recommends Hess. Humilitywill help you really hear what your customers and colleagues are saying, and humility will help you be open-minded and more willing to try new ways. Don't be so consumed with being right—be consumed with constantly “stress testing” what you believe against new data. Treat everything you think you know as conditional, subject to modification by better data.
  • Become an true collaborator. "The ability to collaborate effectively will be an essential skill in years to come," says Hess. "The powerful work connections that will be needed to build successful organizations will result from relationships that are built by authentically relating to another person, recognizing their uniqueness, and doing so in a respectful way that builds trust.

          "Artificial intelligence will in many ways make our lives better," says Hess. "But it will also challenge all of us to take our skills to a higher level in order to compete and stay relevant. We humans need to focus on continually developing the skills that are ours and ours alone."

UPS’ Fork in the B2C Road

By Mark Solomon | March 16, 2015 | 4:59 PM



How does UPS Inc. manage the seismic shift from steady-Eddie B2B commerce to the volatile and less-margin friendly world of B2C? Bill Greene, lead transport analyst at Morgan Stanley & Co. and one of the scene’s more astute observers, says UPS can try to maintain its margins and risk losing market share, or maintain share –at the expense of margins—by sticking with an aggressive pricing stance. Greene says UPS should pursue market share, even if it means a short to medium-term hit on margins. 

Unlike the B2B segment where UPS and its rival FedEx Corp. enjoy a virtual monopoly, the B2C market is more competitive. Besides FedEx, the U.S. Postal Service is a major player and becoming more formidable. In addition, there are smaller players that, while they could never directly challenge UPS, could affect pricing on the margins. Greene reckons that if UPS pursued market share growth by offering cheaper capacity to the market, it could take share from USPS, FedEx, and the smaller players. Growth at UPS's competitors would become more expensive, Greene said. This could force competitors to pull back on their own capacity investments, and would remove incentives for potential entrants like Amazon.com to build delivery capabilities.

If managed correctly, UPS could ramp up revenue growth from market share gains while discouraging rivals from re-investing in their networks and new entrants from taking the plunge, Greene says. This, in turn, could improve UPS’ B2C delivery density, the lack of which today is the biggest impediment to the company’s profit outlook in B2C.

Such a move is not without risks, Greene acknowledges. UPS’ margins would fall (the only question would be by how much) and investors seeing margin compression could flee the stock. It would not be an easy choice for UPS management, Greene says, but it may be preferable to the alternative, which is to keep rates high in a bid to preserve margins. What should also be recognized is that FedEx, with its independent contractor driver network, is in a better position to attain suitable margins on B2C deliveries than UPS’ unionized system and the higher labor costs that accompany it.


A new warehousing model?

By Susan Lacefield | March 06, 2015 | 11:33 AM

My colleague Mark Solomon has done an excellent job of covering “Uber-like” service providers—like 10-4, Cargomatic, and Box Smart—which match loads with unused truck capacity.

 A similar phenomenon is also being seen in the warehousing space with the company Flexe.

Flexe is a service provider that helps companies share underutilized warehousing capacity by matching those that need space to store their products with those that have excess space. In a sense, it provides a spot market for warehousing space.

Last week, the event and research company eyefortransport did an interesting webcast with Flexe CEO and Co-founder Karl Siebrecht and one the company’s customers, Dhruv Agarwal, CEO of True Fabrications, which sells wine accessories. Cleverly the webcast title described Flexe as being “AirBnB for Warehousing.”

In his presentation, Agarwal said that using Flexe has allowed his company to grow without having to expand its warehousing space. “It allows us to act as if we have a warehouse twice as big [as what we currently have],” Agarwal said. 

That’s one of the biggest advantages of Flexe, according to Siebrecht. “Warehousing is the most fixed of all assets in the supply chain,” he says. By allowing companies to tap into other organizations’ unused warehousing space, Flexe helps companies create much more flexible and responsive supply chains without having to increase fixed cost.

This type of model does seem to have a lot of potential, in particular for seasonal products. Additionally retailers might find this one way to respond to the need to have more product stored closer to the customer to fulfill omnichannel retailing and e-commerce demands. 

The big question, of course, is security. After all, there have been numerous reported cases of Uber drivers sexually assaulting customers and the unforgettable story of the AirBnB customer that refused to leave. How can you prevent the warehousing equivalent of this from happening to you? Flexe insists that it screens all its partners to meet standards of service and has a rigorous training and onboarding process. 

While there are certainly a lot of unknowns about this new model that may make a cautious person hesitate, it’s definitely an idea worth keeping an eye on, and I would love to hear from anyone who has had experience with Flexe or other similar models.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

Thoughts from our editors.

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