Posts tagged innovation

New Research by MIT Uncovers the Behavioral and Network Features for “Follow Back” on Twitter

 

Interesting insights and exploration from Dylan Walsh, who tells the tale of Taumid Zaman, MIT professor, who tries to tries to get a follow from Taylor Swift and ends up with a new tool for information warfare. To influence someone on social media, first you need them to follow you. New research uncovers the behavioral and network features that make that happen.

Reference: http://mitsloan.mit.edu/newsroom/articles/solving-twitters-follow-back-problem/?utm_source=mitsloantwitter&utm_medium=social&utm_campaign=followback

It was 2014. Taylor Swift had recently released her single “Shake It Off.” She was now a certifiable pop star and Tauhid Zaman, associate professor of operations at MIT Sloan, wondered if he could get her to follow him on Twitter. Swift had about 60 million followers; he had fewer than 1,000. She represented a global empire; he was an academic. A long shot, yes, but these odds were precisely what motivated the question. “I wanted to know what makes people follow you back,” Zaman said. “Celebrities have a wall around them, but their weaknesses on social media are the people they follow.”

Could he somehow use a celebrity’s friends on Twitter — Swift’s hair stylist or sound engineer — to open the gates to her inner circle? He dubbed this the “follow-back problem,” and he solved it with his students at MIT. The first step of this process was to understand the underlying dynamics of follows on Twitter. For instance, what kinds of Twitter interactions matter the most when trying to get followers? And do overlapping social networks actually help build connections? If they do, then to what degree do they help?

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Zaman tested these questions using a group of Twitter bots posing as artists. Each bot was designed to promote a real artist’s work through Twitter’s three main interactions: following, retweeting, and replying. By tracking these interactions and the responses, Zaman was able to methodically probe and quantify the behavior of users on Twitter.

Two basic principles emerged: first, intuitively, those who don’t follow many other people are unlikely to follow you back, while those who follow a lot of people are likely to follow you if you follow and retweet them. Second, social overlap matters. If Swift follows somebody who, in turn, follows Zaman, then Zaman has a greater chance that Swift will follow him. This boost follows a predictable pattern where the friend of my friend is my friend.

But simply understanding these relationships wasn’t Zaman’s goal.

“We’re engineers, and so we wanted to design a system around this insight,” he said.

By the time he and his team got to work on this, though, “Shake it Off” had become much less interesting than the world’s most famous Twitter user, President Donald Trump. What, he wondered, would be the most promising path to get a follow from @realDonaldTrump?

Zaman ran a model to find the optimal sequence of interactions to garner a follow from Trump, assuming you could only interact with 10 or 20 of his connections. (As the number of interactions gets larger, Zaman said, a Twitter account becomes increasingly suspect, looking more like a bot than a real person.)

He found that targeting the right people in the right order made a follow from the president four to five times likelier than a random approach; and if the follow-back campaign expanded to include friends of friends, then the likelihood jumped even higher. In the end, by targeting a network of 200 individuals on Twitter associated with Trump and the people he follows, Zaman found that he could increase the chance that the president would follow him back by an order of magnitude compared to an uncoordinated campaign. The chance was still small, about 2 percent in his calculations, but it still showed the impact of following people in a smart way.

What does this have to do with democracy and counterterrorism? 
As frivolous as this result may seem, Zaman’s work is both timely and relevant to core questions of democracy and counterterrorism, and more generally information warfare. Consider the involvement of Russian bots on Twitter and Facebook now understood as a concerted effort to sway results of the 2016 election.

Or consider the social media accounts created by organizations like the Islamic State group, which has very effectively expanded membership through these channels. Given this social media landscape, cracking the follow-back problem is the first, essential step for infiltrating an adversary’s network. By targeting certain Twitter accounts, for instance, Zaman believes it may be possible to spread information that dampens the effect of foreign actors in domestic elections, or that counters the recruitment propaganda spread by IS.

This prospect, he admits, is equal parts exciting and scary. While there is plenty of good that can come out of these tools — getting people to exercise, eat their vegetables, stop joining IS — there is an obvious dark side.

“In my opinion, this can be far more dangerous than conventional weapons which have a fixed blast radius,” Zaman said.

While social media tools don’t present direct physical threats, they can powerfully influence the opinions of a whole country; they can, in Zaman’s analogy, have a tremendous blast radius.

“These are weapons, and I’m building efficient ways to use the weapons, so this has to be handled with care,” he said.

Zaman hasn’t yet used the modeling results from this work to pursue a Twitter follow from Swift and Trump, but he is considering giving it a try. And as for the follow-back problem, he is planning on incorporating it into a full-fledged social network counter-measure for influence campaigns by hostile state and non-state actors.

Or, as he puts it, he is “developing the tools for the next generation of information warfare.”

This is the first in a three-part series examining new work about Twitter, influence, and bots by MIT Sloan associate professor Tauhid Zaman.

 

 

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Cradle-to-Cradle System Design: reflections by Dr. Michael Braungart

 

Wanted to share insights from Dr. Michael Braungart on circular economy. My focus this Spring in post-graduate work is centered on application of circular economy theory in supply chain optimization.

The passage below is from ICR (2007) 7:152–156 – DOI 10.1007/s12146-007-0020-2 – © ICR 2007 Published online: 28 November 2007.

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“Our current ‘eco-efficient’ view of sustainability sees materials flowing through the system in one direction only – from input to an output that is either consumed or disposed of in the form of waste. Eco-efficient techniques may be able to minimize the volume, velocity and toxicity of these material flows, but they cannot alter its linear progression ‘from cradle to grave’. While some materials are recycled, this recycling is difficult and brings added costs. The result of such recycling is actually downcycling: a downgrade in material quality which limits its future usability. We need an ‘eco-effective’ perspective to replace this limited and limiting agenda. In eco-effective industrial systems, the material intensity per service unit or ‘waste’ produced by each individual element is irrelevant as long as the materials entering the system are perpetually maintained as usable resources. For example, if the trimmings from the production of textile garments are composed in such a way that they become nutrients for ecological systems, then it doesn’t matter that they are not included in the saleable product. They are not ‘waste’. Even if the material intensity per service unit of the textile mill is astronomically high, it could still be highly eco-effective if its trimmings become productive resources for natural systems. The goal is not to minimize the cradle-to-grave flow of materials, but to generate cyclical cradle-to-cradle ‘metabolic cycles’ that enable materials to maintain their status as resources and accumulate intelligence over time.

Instead of downcycling this approach is all about upcycling. It doesn’t seek to eliminate waste or produce zero emissions. Instead it focuses on maintaining (or upgrading) resource quality and productivity through many cycles of use (and in doing so, it achieves ‘zero waste’ along the way). The difference between the two strategies of cradle-to-grave and cradle-to-cradle are very important. Strategies focused on achieving ‘zero waste’ do not create sustainable cradle-to-cradle cycles. But eco-efficient cradle-to-cradle cycles do achieve zero waste. How they achieve their goals is also different. ‘Zero waste’ cradle-to-grave strategies emphasize volume minimization, reduced consumption, design for repair and durability and design for recycling and reduced toxicity. On the other hand cradle-tocradle strategies design products and industrial processes so that every single one of their ‘outputs’ becomes a nutrient for another system – designed to be re-used – to create a perpetual cycle where resources are either maintained or ‘upcycled’.”.

The Social Dilemma of Human Behavior & Sustainable Choices in the Fashion Supply Chain

Introduction

Although the premise of clothing characterizes a rudimentary need (Yawson, Armah, & Pappoe, 2009), the intricacies and system dynamics specific to the fashion industry’s supply chain are far from basic (Amed, Berg, Brantberg, & Hedrich, 2016). The current state of the fashion industry is challenging because factors contributing to its complexities are uncertain and constantly changing (Amed, Berg, Brantberg, & Hedrich, 2016). From the acquisition of raw materials, to manufacturing and distribution for purchase by the consumer, the fashion industry can influence sustainable practices across the global supply chain (Strahle & Muller, 2017).

Sustainability involves changing environmental dynamics that affect dimensions of ecology, economy, socio-politics, and human behavior (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Research shows an inherent dissension among some fashion consumers (McNeill & Moore, 2015), who “often share a concern for environmental issues even as they indulge in consumer patterns antithetical to ecological best practices” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). An emerging concept in industry is fast fashion, which refers to “low-cost clothing collections that mimic current luxury fashion trends and helps sate deeply held desires among young consumers in the industrialized world for luxury fashion, even as it embodies unsustainability” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012).

Globalization and competition create increased financial and operational pressures in industry to reduce costs (Christopher, Lowson, & Peck, 2004). When paired with growth in human population (Strahle & Muller, 2017), scarcity of natural resources (De Vries, 2013), growth in industry (Amed, Berg, Brantberg, & Hedrich, 2016), advances in technology, consumer trends (Education Bureau, 2017), and human behavior in social dilemmas, the participants in a fashion supply chain may partake in unsustainable business practices (Chan & Wong, 2012). At the intersection of globalization, market competition, fast fashion (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) and sustainability is the social dilemma of fashionable versus durable clothing. This analysis will explore the social dilemma of human behavior and sustainable choices in the fashion supply chain using the context of a pay-off matrix (De Vries, 2013).

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Social Dilemma Assessment

A social dilemma is where interdependent participants face a conflict between the maximizing personal gain and/or a collective interest (Dawes, 1980). As noted by Dr. Robyn Dawes (1980), leading psychologist and researcher, “public goods dilemmas occur when individuals can choose whether to contribute to a common pool that benefits both contributors and non-contributors alike, as long as enough choose to contribute”. Resource dilemmas are slightly different because individuals can decide how much to withdraw for personal use from a common pool that will only be maintained if withdrawals are kept to a minimum (Dawes, 1980). Public goods and resource dilemmas encompass “many of the most critical problems facing humanity, most notably those regarding resource shortages caused by overuse and failures to contribute to the common good” (Shankar & Pavitt, 2002). Moreover, research demonstrates that communication between participants has a significant effect on cooperation rates in these two types of social dilemmas (Shankar & Pavitt, 2002).

Overview of the Pay-Off Matrix

The pay-off matrix offers a way to analyze human behavior in situations of interdependence and conflict (Yawson, Armah, & Pappoe, 2009). As depicted in Figure 1, interdependent positions can range from virtuously cooperative, wherein a gain for one is a gain for the others, to a win-lose competitive position (Dawes, 1980). A decision to maximize individual gain is known as a defecting choice (Dawes, 1980), depicted as “you are the free rider” in Figure 1 (De Vries, 2013). Conversely, a win-win decision (De Vries, 2013) to maximize the gain of the collective is known as a cooperative choice (Dawes, 1980). Furthermore, “at any given decision point individuals receive higher payoffs for making selfish choices than they do making cooperative choices regardless of the choices made by those with whom they interact” (Weber, Kopelman, & Messick, 2004). The cost of the dilemma is that everyone involved receives a lower payoff by making a selfish choice (Dawes, 1980).

 

Figure 1: Pay-Off Matrix in a Social Dilemma (De Vries, 2013)

Pay-Off Matrix Participants in a Fashion Supply Chain

While enduring substantial growth over the past two decades (Strahle & Muller, 2017), the fashion industry has drastically evolved due to retail consolidation, globalization and e-commerce (Amed, Berg, Brantberg, & Hedrich, 2016). It is considered to be one of the most polluting industries in the world (Strahle & Muller, 2017). Industry and trading partners often request for participants to act sustainably (Strahle & Muller, 2017). Participants in a fashion supply chain include suppliers, manufacturers, distributors, retailers, and consumers (Strahle & Muller, 2017).

Theory and Influence in Consumer Fashion Decisions

Martin Christopher, thought leader in supply chain theory and best practice, defines fashion markets as typically exhibiting the following characteristics: short life cycles, high volatility, low predictability and high impulse purchasing (Christopher, Lowson, & Peck, 2004). A key concept in understanding the impulses of consumer purchasing is Maslow’s theory of human motivation (Chan & Wong, 2012). The theory classifies all human efforts as an attempt to fulfill one of five needs (Yawson, Armah, & Pappoe, 2009, p. 951). Figure 2 shows the hierarchical order in which these needs are connected, specifically in decisions that involve buying clothes.

Figure 2: Adaption of Maslow’s Motivational Theory in Fashion-Based Decisions (Yawson, Armah, & Pappoe, 2009, pp. 952-953)

Consumer decisions to purchase fashionable or durable clothing are also influenced by body type, age, family, lifestyle, peers, society, and consumer socialization (Yang, Song, & Song, 2017), or amount of disposable income that allows for considerations of quality and durability (Education Bureau, 2017). Other influences include values from one’s culture, environment, and value orientation (Education Bureau, 2017, p. 16). Lastly, frequency of wear and care instruction (McNeill & Moore, 2015) may influence the need for fashionable, inexpensive, and of lesser quality clothing versus durable clothing (Education Bureau, 2017, pp. 47-51).

Perspectives in the Pay-Off Matrix

Using the interdependent participants in a fashion supply chain, the over-arching perspectives and the decision to cooperate or defect in sustainable practices are shown below in Figure 3.

Figure 3: Pay-Off Matrix in a Fashion Supply Chain (De Vries, 2013)

Cooperate, Cooperate: A Win-Win Solution

When all participants cooperate, all are aligned in sustainable practices (Yang, Song, & Song, 2017). Because all parties benefit from this scenario, resolutions to the conflict are likely to be accepted voluntarily (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). In this scenario, the supplier uses ethical growing conditions, labor practices, and pricing mechanisms that are passed onto the manufacturer (McNeill & Moore, 2015). The product is manufactured with considerations in sustainable design, efficient use of water and energy in textile process, chemical-free treatments, and lean waste reduction (Shankar & Pavitt, 2002). Distributors and retailers respect considerations of packaging waste, energy use in transportation and logistics (Christopher, Lowson, & Peck, 2004) and the ethical treatment of trading partners. Most importantly, the consumer uses sustainable participation across the supply chain to guide purchasing decisions. After purchase, the consumer limits the use of chemical detergents, water and energy use in care, early disposal and landfill waste, and shares the experience with others in his or her circle of influence (Yang, Song, & Song, 2017). The costs of quality and sustainable considerations are shared and accepted by each participant (Jung & Jin, 2014).

Cooperate, Defect

In this scenario, the consumer adheres to sustainable practices while the supplier, manufacturer, distributor, and retailer defect. The consumer receives a small positive individual outcome that is immediate and a large negative collective outcome (the depletion of future resources) is delayed (Shankar & Pavitt, 2002). The defectors receive a higher payoff in the short run no matter what decisions all other individuals make (Dawes, 1980). The result is that the consumers suffers or loses (Dawes, 1980). The defecting choice is known as the “dominant strategy” (Dawes, 1980). Because the dominant strategy produces less preferred outcomes, it is known to be a deficient outcome (Dawes, 1980). The costs of sustainable considerations are born by the consumer and common resource pools (Jung & Jin, 2014).

Defect, Cooperate

In this scenario, the consumer defects and is “a free-rider” (De Vries, 2013), while the supplier, manufacturer, distributor, and retailer adhere to sustainable practices. The consumer pursues individual short-term interest regardless of the impact to common resource pools in the long run (Chan & Wong, 2012). Common pool resources are available to all participants such as air, water, energy, and are increasingly in short supply (Shankar & Pavitt, 2002). When the consumer defects, resources are still available without any personal cost borne. The collective actively participates in aforesaid sustainable practices across the supply chain.

Defect, Defect: The Commons Tragedy

In this scenario called the commons tragedy (De Vries, 2013), all participants in the supply chain defect causing unsustainable outcomes in decision making as depicted in Figure 4. The concept echoes that “open-access common resource pools are exploited until the very last unit as long as someone else pays for it” (De Vries, 2013, p. 390). In a widely cited paper entitled The Tragedy of Commons (1968), the biologist Hardin suggested there is an inherent tendency amongst humans to overexploit such a shared, common, or collective resource” (De Vries, 2013, p. 390). Research related to the commons tragedy “emphasizes the role of factors that may predispose people to take risks in social dilemmas” including aforementioned theory and influence in consumer fashion decisions (Weber, Kopelman, & Messick, 2004). As Figure 4 suggests, participants may differ systematically in the way each arrives at the same decision to defect.

 

Figure 4: Unsustainable Outcomes of Decisions Made by Participants in the Fashion Supply Chain (Strahle & Muller, 2017)

Conclusion

Sustainability and ethical conduct has gained increasing importance in the fashion industry (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Many fashion companies are focusing on tactical efficiencies, implementing changes to their core operations “from shortening the length of the fashion cycle to integrating sustainable inno­vation into their core product design and manu­facturing processes (Amed, Berg, Brantberg, & Hedrich, 2016). However, although companies realize that trendy, affordable fashion raises sustainable concerns, the pressure to meet consumers demands is still influencing industry behavior (Amed, Berg, Brantberg, & Hedrich, 2016).  As demonstrated in this analysis, sustainable decisions in the textile and fashion industry can be controlled along the supply chain (Strahle & Muller, 2017). Specifically, “retailers are the link between the supplier and the consumers. They could be the ecological gatekeepers and help the relevant partners along the supply chains incorporate sustainability into the business” (Yang, Song, & Song, 2017). While the fashion supply chain and consumers continue to evolve in the progression of whether to make and/or consume fashionable or green products, the challenge to connect and meet “deeper elements of value, such as high ethical standards in sourcing, efficient use of materials, low-impact manufacturing, assembly, and distribution,” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) will remain challenging for decades to come.

References

Amed, I., Berg, A., Brantberg, L., & Hedrich, S. (2016, December). The State of Fashion. Retrieved October 29, 2017, from McKinsey & Company: https://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion

Chan, T., & Wong, C. (2012). The Consumption Side of Sustainable Fashion Supply Chain: Understanding Fashion Consumer Eco‐fashion Consumption Decision. Journal of Fashion Marketing and Management: An International Journal, 16(2), 193-212. doi:10.1108/13612021211222824

Christopher, M., Lowson, R., & Peck, H. (2004). Creating Agile Supply Chains in the Fashion Industry. International Journal of Retail Distribution Management, 32(8), 367-376. doi:10.1108/09590550410546188

Dawes, R. M. (1980). Social Dilemmas. Annual Review of Psychology, 31, 169-193.

De Vries, B. (2013). Sustainability Science. Cambridge: Cambridge University Press.

Education Bureau. (2017, November 13). Consumer Behavior in Clothing Choices and Implications. Retrieved from www.hkedcity.net/res_data/edbltr-te/1-1000/…/2_Consumer_eng_Oct_2011.pdf

Joy, A., Sherry, J., Venkatesh, A., Wang, J., & Chan, R. (2012). Fast Fashion, Sustainability, and the Ethical Appeal of Luxury Brands. Fashion Theory, 16(3), 273-296. doi:10.2752/175174112X13340749707123

Jung, S., & Jin, B. (2014). A Theoretical Investigation of Slow Fashion: Sustainable Future of the Apparel Industry. (D. E. Kempen, Ed.) International Journal of Consumer Studies, 38(5), 510-519. doi:10.1111/ijcs.12127

McNeill, L., & Moore, R. (2015, May). Sustainable Fashion Consumption and the Fast Fashion Conundrum: Fashionable Consumers and Attitudes to Sustainability in Clothing Choice. International Journal of Consumer Studies, 39(3), 212-222. doi:10.1111/ijcs.12169

Shankar, A., & Pavitt, C. (2002, July). Resource and Public Goods Dilemmas: A New Issue for Communication Research. The Review of Communication, 251-272.

Social Dilemma. (n.d.). Retrieved November 7, 2017, from Wikipedia: https://en.wikipedia.org/wiki/Social_dilemma

Strahle, J., & Muller, V. (2017, October 30). Key Aspects of Sustainability in Fashion Retail. Retrieved from Springer Link: https://link.springer.com/chapter/10.1007/978-981-10-2440-5_2

Sustainable Apparel Coalition. (2017, November 7). The Higg Index. Retrieved from Sustainable Apparel Coalition: https://apparelcoalition.org/the-higg-index/

Weber, J. M., Kopelman, S., & Messick, D. M. (2004). A Conceptual Review of Decision Making in Social Dilemmas: Applying a Logic of Appropriateness. 8(3), pp. 281-307.

Yang, S., Song, Y., & Song, S. (2017). Sustainable Retailing in the Fashion Industry: A Systematic Literature Review. Sustainability, 9(7), 1266. doi:10.3390/su9071266

Yawson, D., Armah, F., & Pappoe, A. (2009, November). Enabling Sustainability: Hierarchical Need-Based Framework for Promoting Sustainable Data Infrastructure in Developing Countries. Sustainability, 946-959.

Moving Towards a Circular Economy

When you think about accelerating impacts and long-term solutions to current supply chain challenges that impact the 3P’s (people, planet and profit), we need to adopt and develop sustainable frameworks with a holistic life-cycle perspective. There is a ton of innovation happening in the CPG space (Levi’s, Unilever, PepsiCo, etc.)

Shifting from the current ‘take-make-waste’ linear model to the circular economy is critical for businesses to continue to thrive and meet society’s needs. Waste volumes are projected to increase from 1.3 to 2.2 billion tons by 2025, and with nearly 9 billion consumers on the planet including 3 billion new middle class consumers by 2030. The challenges of addressing waste and meeting increasing demand are unprecedented. Therefore it is imperative businesses continue to re-evaluate raw materials, design, manufacturing, consumption, and end of life to keep materials and products continuously flowing through closed loop systems.

How is your company innovating in product life cycle management from design and inception to sustainable product packaging? How are you personally adopting a sustainable mindset in your home, the daily choices you make as a consumer to move toward a circular economy? The bigger question is how are YOU INFLUENCING this change?

Blockchain: Revolutionizing the Global Supply Chain by Building Trust and Transparency

Introduction

The history of Supply Chain Management has evolved since its’ roots in the early 1900s. From improving labor processes of basic material handling and freight transportation, to more sophisticated approaches of balancing cost and efficiency trade-offs, the concept of a supply chain is no longer siloed. It requires integration of supplier-customer relationships, process synchronization, and data harmonization in a complex, dynamic network that is susceptible to vulnerabilities in a global environment. Critical processes to this relationship include real-time communication, collaboration, trust, and transparency that yield mutually beneficial outcomes and competitive advantage. In today’s world, there is a growing prevalence in leading firms advancing toward the adoption, development and implementation of Blockchain technology as a backbone of business operations. This case dives a bit deeper into Blockchain, a novel technology with the strong potential to revolutionize the Global Supply Chain. The goal of this analysis is to discuss: 1) the key technical and economic aspects of Blockchain, 2) the current Blockchain innovators, barriers, and obstacles to Marketplace acceptance, 3) the business case for Blockchain, and 4) future applications and implications of Blockchain technology.

Click here to read the research: Blockchain_Revolutionizing the Global Supply Chain by Building Trust and Transparency

Going Green or Greenwashing?

 

Sustainable, much like organic, is used loosely as a marketing ploy. More often than not, countless companies use a concept called “green-washing.”Green washing is when a company, government or other group promotes green-based environmental initiatives or images but actually operates in a way that is damaging to the environment or in an opposite manner to the goal of the announced initiatives. This can also include misleading customers about the environmental benefits of a product through misleading advertising and unsubstantiated claims.

I use this greenwashing index greenwashingindex.com/about. There are more robust reporting initiatives, but this site is simple and give tips to the basic consumer on how to spot greenwashing and outlines the methodology behind the index. I highly recommend EcoVadis for larger organizations looking to integrate a desktop, cloud-based sustainable compliance solution. EcoVadis operates the first collaborative platform providing Supplier Sustainability Ratings for global supply chains. With a focus on maintaining quality and integrity, EcoVadis has managed to also grown quickly to meet this increasing need. Since its founding in 2007, EcoVadis has become a trusted partner for procurement organizations in more than 150 leading multinationals worldwide including Verizon, Nestlé, Johnson & Johnson, Heineken, Coca-Cola Enterprises, Nokia, L’Oréal, Bayer, Alcatel-Lucent, ING Bank, Air France-KLM, Centrica/British Gas, BASF, and Merck. Combining People, Process and Platform, EcoVadis has developed the industry-leading team, innovative technology, and a unique CSR assessment methodology that covers 150 purchasing categories, 110 countries, and 21 CSR indicators. More than 30,000 companies use EcoVadis to reduce risk, drive innovation and foster transparency and trust between trading partners. EcoVadis is driven by a diverse team of over 300 talented professionals from 40 nationalities committed to a real impact on the environmental and social practices of companies around the world.

Operations or Supply Chain Excellence?

I’m sharing great insights from Innovation Enterprise via Micha Veen who explains simple tips to master supply chain excellence pinned Operational Innovation.

Source: A Refreshing Innovative Approach To Supply Chain Excellence | Articles | Chief Supply Chain Officer | Innovation Enterprise 

Operational or Supply Chain Excellence has been one of the buzzwords that is often heard around senior Supply Chain Execs. However, is excellence the right terminology, or do we need to rename ‘excellence’? Due to globalization, continuous creation of new small ‘global’ businesses that can compete with established organizations, leading supply chain organizations have started to look beyond ‘operational excellence’, best-in-class, benchmark data and industry metrics, towards using a combination of their own internal and tailored external relevant data to continuously review, assess, and adopt evolving leading-edge processes, technologies and behaviors to stay ahead in this ever increasing competitive business landscape. This new approach, named Operational Innovation, has become an effective methodology to deliver transformational impact through the following elements…

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Innovative solution design

Instead of spending a lot of time and effort in designing the optimal operational and supply chain solutions, successful organizations focus on creating a solid solution foundation, which is constantly reviewed and improved with cross functional teams to deliver cross-divisional, fit-for-purpose solutions.

Close collaboration

Instead of phased hand-offs between subject matter experts, technology specialists, operational teams, sales, finance, etc., leading innovative supply chain solutions should be created through continuous close collaboration with all impacted process participants at every stage of the supply chain journey.

Use of Robotics and Blockchain Technologies

A recent article (How will manufacturing robotics change in 2017) describes how robotics will change the industry as early as 2017. The article describes how by 2019, 35% of leading companies in logistics, health, utilities, and resources will start implementing robotics to automate their operations. Additionally, supply chain blockchain technology has started to be utilized in supply chain organizations to deliver additional benefits. A recent article describes clearly the impact that Blockchain has on Supply Chain.

End-to-end Solution integration

The key to delivering true Supply Chain Innovation is the manner in which organizations integrate end-to-end processes, technologies, data, and internal vs. external organizational units. Due to the external focus on innovative technologies, many organizations are still only focused on technology integration, but leading businesses have started to explore how different cloud solutions can be integrated across their partners and customers, creating hybrid learning organizational models which go beyond the traditional joint venture organization models.

Continuously generate value

In supply chains it’s crucial to continuously generate value. Through the use of innovative technologies, solution partnerships, operational models, etc. leading supply chain organizations are known to continuously review, adapt and improve their supply chain environment to deliver operational innovation. It allows supply chains to continuously deliver ‘new and improved’ excellence.

In today’s world, Supply Chain Excellence is not enough. There is no ‘end-station’. It’s critical for supply chain organizations to adopt an ongoing innovation journey, which requires people with the right mindset, experience levels, attitude and curiosity to deliver supply chain innovation….

 

Blockchain: The Best Way to Decentralize Supply Chains

 

This is a recent article written by a brilliant colleague Harry Goodnight. Great insights and perspectives on blockchain technology and why decentralization is a good thing for modern supply chains.

Source: http://www.supplychaindive.com/news/blockchain-Sweetbridge-decentralization-supply-chain-management/504362/

In business and economics, decentralization often refers to the ability to participate in a market and exchange value between peers without the interference of a third-party intermediary who most likely controls and restricts barriers of entry. As Ethereum co-founder Vitalik Buterin explains in his blog post “The Meaning of Decentralization,” blockchain is politically and architecturally decentralized, meaning no entity one controls it and there’s no central point of failure in its infrastructure. In this way, a decentralized supply chain would allow for a frictionless vehicle of business-to-business value exchange amongst even the smallest players in the industry.

Decentralization is defined as the transfer of power away from a central location or authority. As a concept, it is not new; as a business model, however, it is a powerful idea. Some sociologists claim that decentralization and centralization theories have actually been occurring in cycles for the last 4,000 years, causing the rise and subsequent fall of ruling states and empires. Throughout history, the core theory behind decentralization has remained the same: dispersing power from authorities and empowering smaller, individual entities with the ability to act in their own self-interest.

Why decentralization is necessary for modern supply chains

This is especially necessary in the supply chain industry, which has historically suffered from a number of issues that hinder its efficiency. Its main roadblock is that current supply chains are unable to become agile, which poses a significant problem in a market in which they must be able to change their configurations quickly and continually to meet the constantly-changing dynamics of supply and demand. Another major disadvantage is that methods of communication tend to vary greatly, with some companies still relying on manual paperwork. As a result, data storage becomes locked away in in proprietary systems that don’t allow for collaboration.

Supply chain companies also tend to face cultural and organizational issues, such as executing operating plans due to corporate goals, board restrictions and the competitive nature of the market. Consequently, companies have revoked social contracts, mistreated skilled laborers and underutilized their professional talent assets.

This mismanagement has serious financial consequences: for instance, $4.2 trillion is locked up in net working capital in today’s supply chains. By allowing today’s virtual supply chains to break from the company-centric, server-based environments in which they currently find themselves, they will become less brittle, more scalable and fully leverage the underutilized skills and assets available in modern-day business networks. Even a 1% improvement in Invoice-to-Cash cycle times would immediately return about $42 billion in cash to operations.

How can blockchain remedy the issues of centralization in supply chains?

When looking at its positive implications, blockchain is the most logical next step for supply chain managers and logistics providers. Blockchain was brought to the mainstream through cryptocurrencies like bitcoin and Ethereum. It creates an unchangeable digital ledger that provides a record of financial transactions in chronological order. This technology has been increasingly adapted to address gaping deficiencies in other fields, from education to voting to real estate. Through blockchain, massive networks of decentralized autonomous individuals and organizations can grow and operate seamlessly within a decentralized, distributed operating platform.

Blockchain also provides an efficient and viable solutions to the aforementioned hurdles that are restricting today’s supply chain. Specifically, it offers opportunities to synchronize processes that occur within supply networks, resulting in reduced Cost-of-Goods-Sold (COGS) and more cash freed from working capital.

The solution to many of these recurring issues in supply chain primarily involves people. By creating networks of skilled individuals and decentralized autonomous organizations, immense value can be brought to companies, supply chains, and customers. These networks align economic incentives so that everyone prospers, based on their contributions of time, skill, and intellectual property. These contributions are monitored and administered through outcome-based smart contracts on the blockchain. This new vision of decentralization has the potential to radically transform the supply chain space.