Reflections from the CSCMP Edge 2023: AI, Smart Labeling, and the Future of Jobs

I just returned from the CSCMP - Council of Supply Chain Management Professionals Edge 2023 conference. Sharing some takeaways from the conference:

1. AI will enrich human jobs: It is no surprise that the topic of AI came up in most of the sessions. The general consensus was that AI with human in the loop decision making is the way of the future. In a highly provocative panel discussion featuring five women supply chain leaders, Angie Freeman , Chief Human Resources Officer of C.H.Robinson commented that rather than worrying about AI taking over our jobs, we should worry about other humans knowing more about AI taking over our jobs (Well said Angie!). Prof. Yossi Sheffi of MIT, in his keynote shared an overall optimistic view for how AI will augment humans. His 30-min talk is an excellent summary of his book “The magic conveyer belt: Supply Chains, AI, and the future of work”, which I reviewed in a recent post . He shared the 3 phases of job disruptions from automation, which include - Deskilling, Scaling, and Elimination. For each phase, he shared some compelling examples. As for deskilling which involves reduced need for human expertise, he shared the example of the handloom and how it reduced the need for expert weavers. In case of scaling, which involves doing more with less, he sighted the examples of how the number of people employed in agriculture in the USA shrunk from 41% in the 1900 to 1.9% by the year 2000. While most agricultural jobs disappeared - thanks to automation, we are now feeding a lot more humans than a hundred years ago while the current unemployment stands at ~3.5%. Yossi’s point was to remind us that we should welcome technological advances. As for elimination, he cited the example of a cockpit crew of five (pilot, copilot, navigator, flight engineer, and radio operator) and how the progress of electronics eliminated these roles and left only the pilot and copilot with jobs. All in all, while these radical shifts happened, humanity as a whole is in a better place as for standard of living and employment was the key takeaway. Yossi was in his elements - witty and energetic as ever!
2. Smart labeling empowers consumers: In a highly engaging keynote, John S. Phillips , PepsiCo’s SVP of Customer Supply Chain and Go To Market shared how 2D barcodes following GS1 Digital Link standards will empower consumers by placing critical information at their fingertips. As the traditional UPC barcodes celebrated their 50th anniversary, John spoke of a future wherein QR codes on packaging will be ubiquitous and the bar codes as we know them will drop off in about 7 to 10 years. By scanning the QR code, consumers can get a wealth of information including, ingredients and their meaning in plain English, allergen info, nutrition info, instructions on recycling, and so on - the kind of information that is impossible to print on the label of a soda. The beauty of such smart labeling is, the info tied to the QR code can be digitally updated. Say, you buy a can of food and it is sitting in your pantry for 2 weeks and there is a recall that is announced, the recall related info can be dynamically updated by the brand owner so that, by scanning the QR code, the consumer gets the latest information with zero latency. Such is the transformative power of smart labeling! Here is a short video in which John Phillips shows the power of smart labeling and how Pepsi is leveraging it.
3. Key to solving labor shortage and driving economic growth is in the immigration reform: Prof. Marianne Wanamaker of the University of Tennessee narrated a compelling story backed by data, of how the current labor shortage is less of a skillset mismatch issue and more a result of rapid growth combined with a fast changing demographic mix. She cautioned that the growth will suffer if the labor shortage challenge is unsolved. To make her case, she used a simple equation: Rate of Growth of Output = Rate of Productivity Growth + Rate of Growth of Workforce. While the key to productivity is with automation and AI, the rate of growth of workforce is a function of either having more population growth or better labor participation rate, or a combination of the two. With an anemic population growth of 0.5% or less in the US as a result of the shrinking gap between births and deaths, over 80% of the US population growth is driven by immigration. However only 6% of the recent immigrants to the US came on a work or skill based visa program. Marianne encouraged the audience to draw their own conclusion. I will share my conclusion here. Speaking from the vantage point of the Indian diaspora, the US H1B visa program as well as Green Card processing requires a serious overhaul given the heavy backlogs in both. The US is losing so many highly educated and skilled tech workers and scientists to other countries that if immigration reforms are not taken up with a sense of urgency, we will erode away our competitive advantage and growth will suffer. The same argument applies for jobs requiring skilled physical labor as well. While in the short run, the shortages are impacting the physical end of the labor spectrum, immigration reforms overall should help alleviate the concerns here.
4. Decoupling of global supply chains is a myth: In a power packed panel discussion I took part in, along with Kevin O'Meara , EVP of Business Transformation for Shaw Industries and Prof Krista Wiegand of the University of Tennessee, moderated by Alan Amling , also of the University of Tennessee, we discussed Friend-shoring and the implications for global supply chains (I shared my views on the topic in a recent blog post on the 7 pitfalls of Friend-shoring ). We unanimously agreed that a complete decoupling of the Global supply chains is a myth given the deep dependencies at the raw material and commodities level. While the government policies impose constraints on business decisions, Kevin shared his optimism that business will find its way. Krista’s deep background in trade policies added a highly nuanced perspective to how supply chain professionals view global trade. Alan masterfully moderated the session. I had a terrific time collaborating with this panel leading to the event and thoroughly enjoyed taking part in this highly topical conversation. In a future writeup I will be elaborating on some key recommendations to the business leaders as Friend-shoring takes hold.
5. End-to-end thinking delivers superior shopper experience: Gretchen McCarthy , Chief Supply Chain & Logistics Officer of Target shared how target is building a ‘Guest-centered global supply chain’ (Target refers to its customers as 'guests'). While most other retailers are shrinking their retail space, Target is making significant expansions in leveraging stores as hubs to meet rapidly shifting consumer preferences which include expanding drive up pickups, returns, and even picking up Starbucks orders. Target embraced Guest centricity as a company culture rather than simply as an in store experience. As an example, the fulfillment centers operate with “each carton represents a guest” as the mantra. Target is also employing automation in its distribution centers so it sorts various cartons by the order of aisles in the store to make it easy on the store personnel. This is an example of upstream automation helping downstream operations. Embracing such end-to-end thinking allows the store personnel to dedicate more time towards guest experience than managing the store inventory. When asked if Target shifted from Just in Time (JIT) to Just in Case (JIC) inventory, Gretchen said that instead of picking one or the other, Target is taking a more nuanced approach. For example, in case of perishable foods where freshness is the key, the dominant approach is JIT. Whereas for items that can be stored and have increased supply variability, there has been a shift towards JIC. Such nuanced and segmented approach helps ensure product availability for the guests.

There were a vast number of other topics including emerging technology trends, sustainability, professional growth that were discussed. I tried to summarize my twenty seven pages of notes(!) in this blog post by sharing some key highlights. Besides the content rich conversations, I also had the pleasure of meeting so many friends while making some new friendships as well. Hearty congratulations to the CSCMP EDGE team for pulling together a content rich event!