Exploring the Social, Economic, and Technological Issues Posed by Artificial Intelligence

Recently Bill Gates and Elon Musk have joined Stephen Hawking in discussing the dangers of Artificial Intelligence (AI).  Given that three of the smartest people alive today are concerned about this indicates that it is a topic that deserves further exploration. 

Bill Gates has gone on record that we should be worried about AI.  Elon Musk has stated similar concerns. Beyond their concerns about super intelligence,  there are issues concerning any level of artificial sentience. The ethical issues of creating intelligence and then holding it under control is certainly an alarming matter in society today. However, before one can have the ethical quandary, one must first identify and define artificial intelligence.   

Many organizations have attempted to define artificial intelligence, and I feel that there are many new intelligences that have been created. The big question is not if artificial intelligence will occur, but when and what shape it will take and how much a threat to humanity will it become. 

Programs like the iPhone’s Siri offer knowledge and information and a level of human interaction.  Google and Amazon are using artificial intelligence algorithms to sort through emails and online product reviews. 

To address the social, economic, and technological issues surrounding artificial intelligence and its various forms, a panel of experts will be convening in Washington, DC as part of the Policy Studies Organization Dupont Summit 2015 on Science, Technology, and Environmental Policy.

Dr. Andrew Colarik, Massey University – New Zealand will take the position that artificial intelligence is defined when an entity shows true learning and independent decision-making. He offers the example of a child. A parent can impart all the wisdom and knowledge to a child, but the child will make a decision on what to follow. 

To this end, an expert system would not be classified as artificial intelligence because it would always follow all wisdom and knowledge programmed into the system. This might be classified as super intelligence because an artificial intelligence that was enhanced by supercomputing power could certainly be defined as a potential threat to society.                 

I will share the position that artificial intelligence is defined when an entity passes the Turing test, the benchmark for artificial intelligence for some time now. An expert system becomes artificial intelligence by gathering enough experience to pass the Turing test. 

There has been a strong claim that an entity has been able to pass the Turing test, but the skeptics remains unconvinced. Once an entity does pass the Turing test, what are the rights of that entity once it is known to have passed this benchmark?

Dr. Kandis Wyatt, American Public University, will explore the position that artificial intelligence might take on a different form than super intelligence or artificial intelligence as previously defined. There are certainly a large number of expert systems in use that are used to predict future events with greater and greater accuracy.

For example, the satellites and expert systems currently in use for weather modeling and prediction have become quite sophisticated. These networks of knowledge are combined to collect and compare important, relevant data to come up with a predictive model for future activity. 

Does the artificial intelligence marketed by Google or Apple in their products truly display intelligence or are these just clever databases of available information? Does this kind of expert system that takes meteorological, historical, and satellite observational data constitute intelligence? Clearly, this kind of system is using multiple areas of knowledge and comparing them together to make predictions that are more accurate than the ability of a single human. 

I hope you can join us for this important conversation.

The Toyota Airbag Recall and the Dangers of Corporate Culture

Although the Toyota airbag recall is nowhere near over, there are already many lessons learned. Chief among them is the need for a corporate culture with checks and balances.

Although there were number of deaths associated with the malfunctioning airbags, Toyota did not initiate a widespread recall. After working hard for decades to be a company that is synonymous with quality, it seemed that Toyota did not want to accept that their product was defective. Although the airbag was a product from a sub-supplier, Toyota had quality checks for these vendors.  It appears that there was a belief in Toyota that a qualitative failure was impossible.

This same kind of mentality was common among U.S. car manufacturers prior to Japan’s push into the U.S. market. When Japanese cars debuted, American cars had quality issues consumers could see. There was so much pride in the workmanship among manufacturers that defects were not addressed. Is it any wonder that Americans were swayed by lower prices and higher quality from Japan?

Toyota seems to have that same mindset. After so many successful years, the company has forgotten what made it great in the first place.

Although Toyota has finally stepped up to recall all the defective units, there was certainly some pressure needed from Washington, D.C. Perhaps this kind of pressure was necessary so that Toyota did not have to admit a major failing. Unlike in the U.S., where a car manufacturer would throw the sub-contractor (Takata) under the bus, Toyota was unwilling or unable to do the same.

Hopefully, Toyota will learn from this recall. The company needs to re-examine its culture and put quality back at the top of its agenda. Failing this, Toyota might lose market share to competitors.

While even a company that is focused on quality will have an occasional recall, how that recall is handled can really make a difference in its brand perception.

Achieving True Diversity in Contracting

Guest Post By Dr. Oliver Hedgepeth, Program Director, Government Contracts and Acquisition at American Public University

What should be the focus of diversity in government contracting?  It can be linked to different types of federal, state, or private contracting practices or to hiring minorities in awarding a contract.

Should diversity result from a set of procedures and rules to follow? Or, should it be a set of guiding principles, such as our code of conduct or the ongoing discussion of ethics and culture in government contracting?

Dr. Charles B. Daniels from Old Dominion University defines diversity in today’s contracting world and in general as, “not just being defined by color, age, gender, or culture. True diversity and the hardest to achieve, is diversity of thought and ideas. Today’s great enterprises not only tolerate intellectual diversity, they seek it out, celebrate it and reward it. This is a true definition of diversity."

Is diversity part of the discussion with the subcontracting process? Although many government agencies are committed to diversity and inclusion, they still face challenges in getting a diverse representation of firms. 

“One of the reasons may be that the smaller firms are still getting established and have not been successful in partnering with the larger firms, who tend to receive contract awards,” says American Public University (APU) Management Program Director Dr. Marie Gould Harper.

Jere Ferguson, an adjunct professor of Government Contracting and Acquisitions  at APU adds, “In today's workplace, diversity remains a key element of the human capital strategy. Organizations are learning the importance of embracing these issues by developing and implementing diversity plans. Through these plans, successful organizations are increasing the organization’s competitiveness. These plans help to address resistance to change, create an open culture, utilize human resources more effectively, and improve employee retention due higher employee satisfaction. A focus on diversity in the workplace makes sense as organizations focus on one of their most limited resources they have: effective leadership.”

Dr. Morgan Henrie, author of Cultural Influences in Engineering Projects, notes that it was not that many years ago that various literary sources identified the growing trend of the multinational workplace and cultural diversity. From his viewpoint, it is almost a cliché to say this.

The mixing of ethics and cultures and building relationships among members of diverse contracting teams brings with them both opportunities and challenges.

The opportunities come from the different views and ideas that the sub-contracting cultures bring to the prime contractor and the government or private contracting management organization. If allowed and encouraged, the ability to identify problems and issues from different perspectives allows the contracting and program managers to develop new approaches and methods.

Henrie adds, “Often overlooked is that different cultures present team challenges as well, such as how team members communicate.”

Today—and it seems especially since 9/11—multinational work environments are the norm. If all of us in this contracting business do not understand the blend of ethics and culture and how to build relationships, it can lead to front page news.

In particular, our armed forces seem to have an increased diversity among their ranks. Brian Thompson, an APU adjunct professor of Government Contracting and Acquisitions, notes that, “Companies and government agencies need to continue to seize the opportunity like the military to better recruit qualified candidates.”

Diversity is not listed in the terms and definitions section of the Contract Management Body of Knowledge (CMBOK). It seems we are long overdue to address this oversight, but in the meantime we need to move ahead with understanding and leveraging diversity in our contracting efforts.

About the Author: Dr. Oliver Hedgepeth is the program director for Government Contracts and Acquisition at American Public University (APU). He is the former program director of Reverse Logistics Management and Transportation and Logistics Management. Prior to joining APU, Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage. His book, RFID Metrics, was published in 2007 by CRC Press and is in revision.

The Wide-Ranging Impact of Just-in-Time Inventory Management

Guest Post by Dr. Keith A Wade, faculty member, Transportation and Logistics Management at American Public University

Just-in-time (JIT) is an inventory management process that ensures that materials, labor, and other resources are available when needed. JIT is typically used by manufacturing industries that carry out daily production, such as car assembly plants.

With JIT, resources required are made available with no shortage, thus there are decreased holding costs and purchases of defective products.

JIT was widely adopted in the 1990s to keep inventory and other resources at stores and reduce costs. The savings allowed companies to reduce prices, increasing consumer demand and leading to more production and industry growth (Helper & Sake, 2012).

Transporting for JIT

Companies that use JIT often use air transport as the quickest means to deliver goods from suppliers worldwide. This approach enables companies to more easily switch suppliers if resources needed to sustain the demand of production are not available domestically (Nemetz & Fry, 1998).

Firms that require more material at a cheaper cost often use ocean shipping for short distances. This method is slower, so orders are often larger to ensure constant production (Nemetz & Fry, 1998).

Impact Across Industries

The growth of JIT has triggered the development of effective communication systems to ensure that suppliers deliver goods in time. JIT has also led to government policies. The Interstate Commerce Commission has formulated policies for trucking goods that have supported the goal of getting goods to consumers at the right price as well as the goal of profitable companies (Helper & Sake 2012).

JIT growth has resulted in new transportation industries that have reduced expenses for many companies. More trucking industries offer JIT delivery, which has increased employment in the industry. As a result, JIT has raised the US GDP by a significant percentage (Helper & Sake, 2012).

Challenges Ahead

The challenges facing JIT growth include the potential for supplier production delays that can cause production delays downstream. Communication systems and quick transport methods can help mitigate this risk (Helper & Sake 2012).

There are instances where JIT is not applicable. For example, in the energy industry, the petroleum and gas required for daily operations must be made available in large quantities in order to ensure constant productivity (Helper & Sake, 2012). So, the industry must lay out a strategy to maximize energy resources despite increased holding costs. Thus, some industries that produce essential goods and resources and rely on oil and gas may stop using JIT if such commodities become scarce. (Helper & Sake 2012)

The growth of JIT has solved many problems by ensuring rapid response to increasing consumer demand. It has also resulted in technological advancements and created jobs both internationally and domestically. It is likely to continue to play a role in U.S. manufacturing for years to come.

References

Helper, S., & Sake, M. (2012). Supplier relations in Japan and the United States: are they converging? Sloan Management Review

Nemetz, P. L., & Fry, L. W. (1998). Flexible manufacturing organizations: implications for strategy formulation and organization design. Academy of Management Review, 13(4), 627-639.

About the Author: Dr. Keith A. Wade is an Associate Professor of Transportation & Logistics with American Public University.  He teaches courses in Supply Chain and Logistics Management.  Prior to working full time in teaching, Dr. Wade worked in the Logistics field for over 15 years. He was most recent a Director of Supply Chain & Logistics Management for Ford Motor Company in which he managed logistics responsibilities all over the world. Dr. Wade earned a PhD from Michigan State University in Supply Chain Management, an MBA from the University of Detroit, and a BSBA from Oakland University. Dr. Wade is a Six Sigma Black Belt.

 

Successful Companies Employ Reverse Logistics

Reverse logistics completes the business cycle in a manner that offers new value to any organization.  While current sales are important, true success comes from being able to harness sales that take place in the future. If customers buy today and are happy with their purchase, they will buy again in the future. 

Reverse logistics practices such as retrograde, refurbishment, repairs, remanufacturing and recycling all contribute to building a sustained customer relationship.

Tapping into the adage, “Sell a man a fish, and he eats for a day,” companies that sell a man on the merits and value of a specific fish market sell that man fish for the rest of his life. For that matter, companies that do this well will also be selling that man’s family fish for the rest of their lives.

An example of this is my relationship with Nike. As a runner, I have purchased a lot of Nike shoes. I might occasionally purchase another brand, but I prefer Nike.  This means that I also buy Nike shoes for my children because I know that they are reliable and last. 

Some might argue that I am just a product of clever marketing. While I cannot dispute that point fully, a brand must fulfill a need and be something with which consumers want to affiliate. Growing up, my family shopped at K-Mart a lot. When that brand faltered, we would shop elsewhere. 

Products and companies that are built to last are responsive to the customer long after a purchase. This is where reverse logistics comes into the equation.

Through the years, I have purchased Nike shoes though various retailers and they all replace defective items without question. Customers want an easy, “no questions asked” replacement when there is a problem. People expect the brand to stand behind their product.

People want a relationship, not a one-night brand. Customers expect the brand to extend that relationship to the environment, to fair labor practices, and to value that endures the test of time. Companies need to ask themselves if they seek to build a relationship or just make a sale. Building something that endures requires that reverse logistics be built into the operation.

The Complexities of Food and Beverage Logistics

Guest Post By Dr. Oliver Hedgepeth, Program Director, Government Contracts and Acquisition at American Public University

The food and beverage business is more complex than the average person suspects. Have you ever checked the country of origin label on the items you buy? This will give you some idea of the logistics involved in your food.

In some cases, our food and beverages are flown in from Asia, often via Anchorage, Alaska for a refueling stop.  When I lived in Alaska, having over 600 such jets land each week was normal.

I owned part of a transportation company from 2006 to 2010. We often delivered to a local Wal-Mart distribution center. One stormy night delivering a truck load of frozen meatballs was the first up-close encounter with the food and beverage industry.  As I waited for the truck driver to unload the pallets of food, I looked around the huge warehouse where mountains of food were catalogued and stored ready for to pack into other waiting delivery trucks. The scene was a small city of activity.

The source of our food and beverages is one side of logistics in that industry. The other side has to do with recycling.  When I ran my trucking company, one night a rented trailer leaked air conditioner water on pallets of baby food. The food was not contaminated but could not be delivered to the intended customer. The food was donated to local food banks, churches, and homeless shelters avoiding the landfill for those thousands of small jars.

Food and beverages are controlled for safety and security in movement and storage and shelving. The Food and Drug Administration makes sure that consumers have access to safe food and beverages. When food is recalled or the sell-by date has arrived, reverse logistics comes into play.

At a Food and Beverage Committee meeting at a Reverse Logistics Association meeting a few years ago, I met a young entrepreneur who had a process to reclaim sugar from old drinks, sodas, and candy. The reclaimed sugar is then used in new products.

Other parts of food and beverage that are rescued or recycled that have nothing to do with taste.  A complex array of such things as white paper, computer paper, corrugated fiberboard, aluminum cans and foil, aerosol cans, metal cans, plastic translucent bottles, glass bottles, fats, oils and greases, and wood wastes (pallets) are also used and then must be recycled or disposed of.

Food and beverages are part of one of the world’s most complex cycles of a product life. The industry is about safely serving consumer and finding ways to reuse associated materials.

About the Author: Dr. Oliver Hedgepeth is the program director for Government Contracts and Acquisition at American Public University (APU). He is the former program director of Reverse Logistics Management and Transportation and Logistics Management. Prior to joining APU, Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage. His book, RFID Metrics, was published in 2007 by CRC Press and is in revision.

The Rise and Fall of Branded Logistics

Logistics was originally dominated by local businesses that understood certain transportation lanes, but did not have the national reach to move products nationally, or internationally. This was the case when United Parcel Service (UPS) became an early branded logistics company. Since then, there has been a steady rise in branded logistics companies. But, have these companies gotten so large that they might start to feel other providers are starting to take a bite out of their market share?

History of Branded Logistics

UPS was considered an alternative to national mail service, which at that time was the dominant player for logistics. National postal services have long been known for inefficiencies and taking far too long to deliver shipments. It is this common perception--more than anything else--that has led to the rise of branded logistics.

FedEx has become one of the most successful brands in logistics by offering innovative services while building a reputation for being fast, efficient, and reliable. Other companies that have built similar reputations are DHL, TNT, and UPS, who have been pushing the envelope with regard to deliveries. Businesses can no longer operate without these companies that offer scalable, seamless logistics.

Problems on the Horizon?

Advances in technology may soon lead to more competition. Local operators might be able to serve certain shipping routes and national mail carriers could re-tool and make these logistics giants take notice.

Not too long ago, these branded logistics giants were taking on the national mail carriers in a David versus Goliath showdown. Today, these companies have grown to a size that makes them less nimble and perhaps vulnerable.

Branded logistics companies have also failed to maintain innovation, which was at the heart of their initial success and what made FedEx the brand it is today. While these companies are continuing to implement incremental improvements and automation, few of these giants appear poised to make the next great leap in technology.

Competition from Amazon and Wal-Mart

Amazon, a global retailer, is looking to use drones for making deliveries, and has even purchased a drone manufacturing company so that they can customize their delivery system. This will make it a new breed of branded logistics company.

What Amazon has done would be like FedEx purchasing Boeing or UPS purchasing General Motors so they can better customize vehicles to meet their exact specifications. Controlling the manufacturing of delivery vehicles means that Amazon will be a clear branded logistics company.

Many companies already use Amazon for their distribution. If it can master logistics, it could conceivably supply every household item directly to consumers without consumers having to interface with any other companies. Amazon seems to be moving to become a one-stop-shop.

One should expect Wal-Mart, a retailer known for having the industry’s most efficient supply chain, to also move in this direction. It is already custom-designing trucks for its supply chain and could plausibly design drone delivery vehicles like Amazon.

These changes will not happen overnight. There are still many obstacles, including acceptance by the FAA and public as well as changes in technology. The question is not if this shift will take place, but when.

Three Critical Elements Impact Global Supply Chain Partnerships

Guest Post by Stacey Little, Program Director, Transportation and Logistics Management at American Public University

The three building blocks most important to supply chain relationships are communication, trust, and mutually beneficial results. The goal is to increase the benefits to all parties involved and add value to the end consumer. I always explain to students that there is a purpose to every link in the supply chain—to add value. 

Miscommunication is a common problem in any business setting. It is the root cause of costly mistakes, delivery delays, and customer frustration. The severe consequence of miscommunication is the reason communication is a necessary skill for all supply chain managers. Effective communication among supply chain partners is essential to the flexibility and responsiveness of the supply chain.  Communication is the foundation for trust among supply chain partners.

Communication among several members possibly from different countries is a challenge in itself. Add in over 6,000 languages spoken around the world, and you have just added another level of complexity to the miscommunication dilemma. Then we also need to consider communications styles. A simple illustration is that in some cultures communication is indirect and you may have to construe meaning from vague comments, gestures, or facial expressions.

A lack of trust among supply chain partners can impact transparency and information- sharing, which are essential to process efficiencies and good decision-making. On the other hand, a high level of trust enhances cooperation and can reduce time that would otherwise be spent on discussion, negotiation, and investigation.

Since trust facilitates quicker processes, it can impact supply chain execution. As an example of trust problems in the supply chain a major Midwest university in the Midwest once suspended sales of a popular soft drink brand on three campuses due to human rights violations, environmental waste, and water usage in India. The vendor’s failure to meet the university’s code of conduct resulted in a disruption to the supply chain and loss of sales impacting both partners. 

Due to a lack of transparency, information-sharing, and trust, a third- party independent auditor was used to satisfy both parties and resolve the issues at hand. An issue like this one can clearly deteriorate positive supply chain relationships. 

Another example comes from a good friend of mine from Germany was looking to setup a supplier in China to produce stainless steel oven parts for a high-speed baking oven.  When he arrived at the meeting in China, he had brought a box of $150 chocolates to give to the President.  When he gave the President the box of chocolates, he simply pushed it over to his assistant.   My friend was in shock.  He could not believe that he did not accept his gift.  The problem was that he should have given the gift in private instead of at the business meeting in front of a group of people.  He had not established any type of relationship or trust with the President before giving the gift.  A trusting relationship is the first-step toward achieving mutually beneficial results in supply chain partnerships.  

Mutually beneficial results are positive results of trust and communication in supply chain relationships.  Positive, trusting relationships are the foundation needed for achievement of mutually beneficial results. Benefits realized in this supply chain may not be equal to all partners, but as a whole the chain should be strengthened as a result of each member’s role.

Are the approaches and tactics you use to deal with your boss, co-workers, and your subordinates the same or are they different for each relationship? Every relationship is different and deserves a unique approach. Your relationship with your global supply chain partners or team members is no different. Supply chain managers must be proactive in their approach to achieving successful relationships. A great deal of flexibility is required to show a level of concern and build trust with supply chain partners. 

About the Author

Dr. Stacey Little is Program Director for the Transportation & Logistics Management program. She has over 13 years of experience in teaching in Business and Logistics in both the online and traditional format.  She has a Professional Designation in Logistics and Supply Chain Management and a Certification in Transportation and Logistics from the American Society of Transportation and Logistics. Her research interests are in the area of cultural influences on supply chain relationships.

 

 

Logistics in the Limelight

The impact of global logistics is making headlines with the recent controversy in the US about Beck’s beer not being brewed in Germany.

Beck’s has been brewed in Germany and exported to the US up until recently. Feeling the pinch in market share a couple of years ago, the company quietly moved their brewing operations for the US market from Germany to the US.

One might wonder why any company would risk a global brand by making such a change. Beck’s has acknowledged a savings of $12 million in transportation costs. Unlike other operational savings, savings in logistics go straight to the bottom line. 

This becomes a huge coup for any company competing in the fierce beer marketplace, where market share can shift with popular tastes. Logistical savings can really impact an organization's profitability, which is something shareholders love to hear. Bottom-line savings of $9 million a year is probably worth the risk of a little controversy.

The Beck’s shift happened in 2012 and a recent class- action suit   is offering up to $50 compensation for misled consumers. This case of Beck’s moving their brewing operations to save transportation costs is an instructive example. Real transportation savings trump many organizational risks because the savings are direct and tangible.

We should expect more of these kinds of changes in the future. The only question now is, will Beck’s change their branding to become a domestic beer along the likes of Budweiser, Coors, and Pabst Blue Ribbon?

 

Transit and Cargo Oriented Developments

Guest post by Jeffrey Wendt, faculty member Transportation and Logistics Management, American Public University

After World War II people migrated from the urban inner cities to the surrounding suburban communities to follow the American dream. This led to a major reliance on single passenger automobiles to move people from home to work and personal activities.

Today, with development of new communities and redevelopment of older urban areas, there is increasing interest in increasing public transportation. Reducing congestion and addressing environmental concerns are now the focus.

During the past few decades there have been initiatives to decrease travel times and increase access to services to reduce environmental and congestion problems. One such initiative is transit-oriented development (TOD) in older municipalities to take advantage of light rail and bus service to get people around. The emphasis is on developing housing to be within one-half mile of public transportation and retail business. Walking and bicycle pathways also give citizens of these communities more healthful travel options.

The TOD concept led to a similar industry objective: cargo oriented development (COD) or logistics cluster. The purpose of these strategies is to increase close local employment opportunities by bringing distribution and industrial operations together to serve industry needs. By improving abandoned lands and developing vacant properties with COD in mind, employment and living quality is improved within these clusters.

There is a positive connection between TOD and COD communities; one’s needs are met by the other’s available resources. This creates opportunities for enhanced rail and truck operations to address the needs of both the residential and commercial aspects of the community.

There have been many successful TOD communities throughout the world as well as in the United States, including Arlington County, Virginia; San Francisco Bay area; and Salt Lake City Metro. These community developers realized the positive impact on inner city revitalization when TOD practices were implemented. 

Although TOD communities are popping up all over the U.S. there has not been as many COD developments to match. Dallas/Fort Worth has a COD development near Alliance airport and in the southeast of Dallas. But neither of these applications incorporates TOD as a complimentary strategy.

The Center for Neighborhood Technology is a nonprofit research and advocacy organization that has worked with community developers to tie these two applications together. One such endeavor involved communities in Cook County Illinois.  Working with folks in Harvey and Blue Island Illinois to apply TOD/COD strategies proved to be integral in successfully reinventing these older once vibrant communities.

Sustainable living communities tied with accessible local employment opportunities in a vibrant socially and economically driven environment will define success in future revitalization of American cities.

About the Author

Jeffrey Wendt is an adjunct faculty member at American Public University System Transportation and Logistics Program, and is on the faculty at North Lake College, where he teaches logistics and supply chain management courses. He has worked in the logistics industry for over 30 years in different logistics and supply chain capacities. Jeff received his MBA in Supply Chain Management from the University of Dallas and is currently pursuing his doctorate degree in Transportation and Logistics from North Dakota State University.