# data[].attributes.body
Hi Constantina and Ray!

# data[].attributes.headline
Transportation workforce in the news for the WRONG reasons

# data[].attributes.subject
Transportation workforce in the news for the WRONG reasons

# data[].attributes.body
Excellent news from the WSJ where it showcases some of the transportation industry hiring woes.

# data[].attributes.attachment_link.title
Jobs Go Unfilled as the Economy Expands - WSJ 8-8-18

# data[].attributes.body
With unemployment at extreme lows, there is a shortage of willing labor that make it difficult to attract and hire talent. When the demand or anything exceeds the supply you have a recipe for disaster given that there is a booming economy and we are about to head into the retail season again. So if you cannot hire the employee you want are you "building" one? Talk to the Talent Networks to help with his initiative. ~ Ray

# data[].attributes.attachment_link.readable_text
Supply chain risk has certainly evolved during the past few years. While a blizzard, a strike or even more crumbling infrastructure may still impact shipments, newer risks such as piracy, geopolitical turmoil, immigration restrictions, trade wars and data breaches have taken over the risk headlines.

But there is one giant risk out there that is not being addressed with the significance it deserves, and it can be described in just two words:
Help Wanted.
The shortage of labor in the United States is hurting companies from coast to coast and the performance of your supply chain is at risk. Demand for labor exceeds supply, causing labor rates to creep up, resulting in higher prices. Gaps in labor for manufacturing and service companies are delaying shipments. Changes in processes to offset these labor shortages are hurting product quality, resulting in customer service and cash flow issues.

Supply chain managers are simply not paying enough attention to the long-term implications. Labor shortages will only get worse, and supply chain managers need to address these issues head on. That is, if they have the staff to do it.

The U.S. Bureau of Labor Statistics, in its June 5, 2018 Job Openings and Labor Turnover Summary (JOLT) noted that there were 6.7 million job openings as of the end of April. This was a new high.

Just consider the enormity of that number. While larger retail, service or manufacturing companies may have openings that number in the hundreds or even thousands across their networks, many small businesses have one or two open positions they cannot fill.

Perhaps one of those companies is your key local 20-person machine shop or plating company. Two unfilled positions equates to 10% of their work force. Imagine what that kind of labor shortage does to their production schedule. Now extend that labor shortage downstream into the supply chain and you can see the enormity of the potential impact.

One segment where labor shortages are acute is in the transportation sector. I was recently on a road trip where seemingly every truck had a sign on back door advertising for drivers. While this is not a new issue, what got my attention was a tow truck dragging a broken down box truck with a big sign on its boom looking for drivers and mechanics. And every motel, diner or truck stop had help wanted signs hanging in their window. No comment please on the types of establishments I frequent. My per diem has been recently cut.

Driver turnover has always been high, averaging more than 100% in some years. Life on the road, increased regulatory restrictions, less than stellar pay and other employment options keep that turnover high. But an increase in e-commerce deliveries has exacerbated the acute shortage. Economics drives the supply chain. Get ready for even higher transportation costs.

The problem with drivers goes deeper than commercial freight carriers. A friend in the bus business laments the lack of experienced coach drivers to support commuter routes and their charter business. The shortage of drivers is so bad that most of the company managers and supervisors have trained for their commercial drivers licenses so they can maintain essential commuter routes if there are no regular drivers. These are competitive routes, and it only takes one service hiccup for a rider to opt for another company, or even get back behind the wheel of their own car.

They are willing to train inexperienced drivers. They fully subsidize their training and licensing, essentially about a $5,000 cost that they are eating to overcome this shortage. But even this generosity is not enough to fill in the ranks. Some new drivers leave after a short period of time, looking for the next job that may pay them a bit more in a competitive job market. And, there is a delay in licensing. An extended backlog at the motor vehicle bureau for road tests due to ... you guessed it ... lack of qualified personnel.

Some bus companies are discontinuing routes and charter services due to lack of drivers. The ramifications for increased automobile traffic, at least on the Boston area roads I frequent, are horrendous with almost 24/7 gridlock. Those trucks crawling along the interstate next to you have deliveries to make, increasingly late deliveries. It's all related.

Perhaps automation is the answer. Walmart is a strong advocate for autonomous trucks in order to solve the persistent driver shortage problem. Robotics are being combined with artificial intelligence and machine learning to do more and more complex tasks that were once filled by traditional labor. And those pesky chat windows that pop up asking to help you complete your online order? A "chatbot" with a fake name and good looking avatar.

So it is time to add labor issues to the supply chain risk profile, and quickly. Ask your suppliers what they are doing to not only find the bodies to keep their business running, but to keep their current employees happy and productive. The robots may be advancing, but until they take over the world we need workers - 6.7 million of them ... and counting.

Top image credit: Pixabay

# data[].attributes.attachment_link.title
Help wanted: The giant risk supply chain managers are ignoring

# data[].attributes.attachment_link.description
Supply chain risk has certainly evolved during the past few years. While a blizzard, a strike or even more crumbling infrastructure may still impact shipments, newer risks such as piracy, geopolitical turmoil, immigration restrictions, trade wars and data breaches have taken over the risk headlines.

# data[].attributes.headline
Supply Chain Digital Traceability Severely Lacking in the Food Industry 

# data[].attributes.subject
Supply Chain Digital Traceability Severely Lacking in the Food Industry 

# data[].attributes.attachment_link.readable_text
If there is one thing we've learned in the past six months, it's that the current traceability practices in the produce industry were not effective in tracing back the root of the outbreaks. Where do we go from here? How will supply chain digitization and AI play a key role in solving these issues?

The Context

Recent Outbreak (#2): In June 2018, the US Center for Disease Control and Prevention announced that since the first romaine lettuce E. Coli outbreak (March '13), 197 people across 35 states had become ill, and five people had died. Although authorities had no way of knowing exactly where the outbreak came from, their investigation lead them to believe that the contaminated produce came from somewhere in Arizona.

First Outbreak (#1): Last holiday season, people in North America were affected by a first romaine lettuce outbreak. Dozens of people became ill and two people died in Canada and the U.S. due to the E. coli 0157:H7 outbreak. Yet, the source of the contamination was never found.

In less than six months, millions of people were directly threatened by no less than two deadly outbreaks, and the source of the contamination is still unknown. These food safety crises have huge negative effects on the consumer's confidence and for businesses across the globe. In May, romaine lettuce sales fell nearly by 45%, according to the WSJ, and prices for whole heads of romaine were down 60%.

How can this happen in such a technology-driven time, where smartwatches can educate us on our sleeping patterns, cars basically drive themselves and meat is starting to be engineered and produced in laboratories?

When it comes to food safety, we cannot compromise. Consumers solely rely on food safety leaders to pave the way to a confidence-based and reliable food supply chain.

Many supply chain quality processes are still paper-based. End-to-end traceability, from raw materials to the end user, is a big challenge. Consolidation of raw material, lack of knowledge of suppliers, mislabeling, incomplete shipping information, unreliable records and lack of data collection are just a few of the reasons traceability is sub-optimal.

The truth is that the food industry is a late adopter when it comes to supply chain digitization, and for many reasons.

Where to Go from Here: Supply Chain Digital Traceability

According to a recent PwC study on the rise of Industry 4.0 (2016), 33% of 2,000 respondents said that their company has started to digitize their supply chains, and 72% expect to have completed this process within the next five years.

By connecting the dots of your supply chain, not only are you making it more intelligent, but also more effective. From a quality and safety standpoint, one of the many advantages to digital traceability within the supply chain is the fact that quality management costs will be lowered, while increasing real-time visibility into quality processes and optimization via big data analytics.

Coming back to the lettuce outbreak, some would argue that even if you connect the dots of existing data with a digital supply chain, that may not be enough because the information needed was not entered - like in microbiological testing. This is where enabling technologies like AI, IoT and blockchain come into play. Blockchain, as a distributed ledger, is also a promising tool to create transparency and ensure data integrity.

Roadblocks Ahead

Digital traceability is quite promising. Nonetheless, there are challenges currently affecting its mass deployment.

The first one is the adoption of new technologies, which is always a challenge, especially when under pressure to increase productivity and profitability. Most people and companies don't know where to start, but a proven traceability expert can help meet specific needs and serve as a guide throughout the entire process.

The second challenge is cost. Implementing full traceability is initially expensive. However, considering that the average cost of a recall is estimated at $10M, the return on investment is worth it. Specialized technology suppliers can offer highly flexible solutions to maximize these returns.

Conclusion

End-to-end supply chain digital traceability is a promising avenue to control, track and trace products for food safety concerns.

By leveraging AI, IoT and blockchain technologies, OPTEL GROUP, a global traceability leader and expert has developed unique traceability platforms to help small producers and Fortune 500 companies alike to tackle food safety challenges thanks to an intelligent supply chain.

# data[].attributes.attachment_link.title
Post-romaine lettuce outbreaks: Lessons in traceability

# data[].attributes.attachment_link.description
If there is one thing we've learned in the past six months, it's that the current traceability practices in the produce industry were not effective in tracing back the root of the outbreaks. Where do we go from here? How will supply chain digitization and AI play a key role in solving these issues?

# data[].attributes.attachment_link.readable_text
For all the attention given by politicians in both parties to trade and globalization as a threat to the middle class, by far the most important, past and future, is automation - the replacement of tasks performed by human beings by machines, increasingly enabled by software, especially software that "thinks" or learns on its own, or "artificial intelligence" (AI).

Automation's upside is that it is the primary way that economies grow and standards of living advance. This happens because automation is responsible for cheaper and often better goods and services.

Automation's downside is that it is disruptive, and however essential "creative destruction" is to economic advance, when it is your job or that of a close relative or friend that is "destroyed," the "creative" advantages don't count for much.

Automation anxiety

Last year, the Pew Center reported that 72 percent of Americans said they were worried about the impact of automation on jobs - this, despite the unemployment rate at the time being at a twenty-year low (and even lower since).

The fears of a jobless dystopia are misplaced. Despite cyclical ups and downs, economies generate new jobs to replace the old ones disrupted by technological change (or by "globalization," or increased competition from firms in other countries). There are multiple reasons for this, as outlined in my new paper "Meeting the Automation Challenge to The Middle Class and the American Project," but the simplest is that the savings enabled by automation do not disappear into thin air. They get spent on other goods and services, which creates more jobs elsewhere in the economy.

Worry about wages, not jobs

The real concern about automation is the wages those new jobs pay, or more precisely, on the distribution of those wages. If, as automation proceeds, it continues to favor those especially able to use it at the expense of those who don't have those skills - in economists' language continues to be "skills biased" - it will further widen income inequality. More inequality today erodes opportunities tomorrow for the next generation (and the ones thereafter) to realize the American Dream. To use an analogy favored by many labor economists, especially Brookings Senior Fellow Isabel Sawhill, if the rungs on a ladder are driven further apart, it makes it that much more difficult for many to climb the ladder, especially those born at or near the bottom.

What, then, should be done? There is wide support for slowing automation down. According to the same Pew survey reporting high levels of anxiety about automation, 87 percent of Americans say want a human in "driverless" cars, just in case. Nearly the same level, 85 percent, favors limiting machines to performing primarily those jobs that are dangerous or unhealthy for humans.

Technological advances don't work in so discriminating a fashion, however. To be sure, robots can defuse bombs at essentially zero risk to human life and are to be vastly preferred for this task - and other dangerous or dirty jobs - than people. There will always be a market for such innovation. It is safe to count on it continuing.

But most technological advances will be used to reduce the cost of making goods and delivering services, a process that is and will continue to be invisible to consumers. Elected or regulatory officials will not have an easy time to singling out and slowing down or preventing every such improvement, nor should they. If anything, given the slow pace of productivity growth and thus wage growth since the Great Recession, citizens should want faster automation in the future, because it is key to realizing more rapid economic growth.

Here are four ways government can help smooth the transition of workers from jobs that automation will displace to those that automation either will create directly or enable.

Cure #1: Maintain a High-Pressure Economy

Over four decades ago, my first full-time employer and mentor, the late Arthur Okun, authored a pioneering study in the Brookings Papers on Economic Activity showing that workers have the greatest opportunities to realize wage gains at their current jobs and to move to ones with even higher wages and benefits when the economy is "running hot" - that is, at or close to full employment. While the U.S. economy has undergone much change in the intervening years, Okun's proposition remains as true today as when he outlined it, with two notable differences.

First, the long-term or potential growth rate of the U.S. economy since the Great Recession - at roughly 2 percent according to the Congressional Budget Office and even the more optimistic (but less realistic) 3 percent rate projected by the Trump Administration - has fallen well below the near 4 percent pace of the post-war years until 1973, when Okun wrote his article. Slower GDP growth, especially slower productivity growth, also means slower growth in workers' compensation.

Second, whereas in the early 1970s when policy makers thought they had two instruments - fiscal and monetary policy - to keep the economy operating at "high pressure" - today and in the future that may not be the case. With the federal deficit already approaching 4 percent of GDP when the economy is operating very close to full employment, policy makers may be more reluctant to use fiscal stimulus to counter future downturns if, as CBO and virtually every economist outside the Administration projects, the deficit only goes higher. That leaves only the Federal Reserve to keep the economy humming while also trying to keep inflation in check, a difficult balance to maintain.

In a recent op-ed in the Wall Street Journal, Harvard's Martin Feldstein nonetheless argued that the Fed cannot and indeed should not "save jobs from AI and robots," and indeed urged that attempting to maintain full employment should be dropped from the central bank's mandate. With all due respect to Feldstein, who is a great economist, this is precisely the wrong advice, unless he can use his powers of persuasion to convince his fellow Republicans and willing Democrats to compromise on a comprehensive deficit reduction plan - involving both entitlement reforms and tax increases - that would restore some freedom for fiscal policy to fight future economic downturns.

Failing that outcome, which unfortunately looks unlikely for the foreseeable future, it would be a severe mistake to deprive the Fed of the ability to maintain employment. Otherwise, we will be condemned to suffer the adverse economic, health and political consequences of the jobless dystopia that the automation pessimists claim is in our future.

One way for the Fed to prevent this outcome is to target an economy-wide price level, as advocated by Brookings Senior Fellow and former Fed Chairman Ben Bernanke. Such a policy would make it easier for the Fed to keep the economy close to full employment even when the inflation rate may temporarily rise about the central bank's current informal target of two percent. This is because a price level target would allow the Fed to take account of and make up for low inflation rates in earlier years.

Cure #2: Insure Wages

Spanning more than three decades, I and multiple co-authors have advocated wage insurance for displaced workers, initially just those victims of import competition but later for all displaced workers for any reason.[1] The idea is to compensate displaced workers for some portion of their wage loss in accepting a new lower-paying job. Most wage insurance proposals set the compensation fraction at 50 percent, and trigger payments only when workers take a new job and stop at two years from when they lost their job. The ticking clock nature of when the compensation kicks in would give workers incentives not to remain unemployed looking for the "ideal" job that may never materialize. The compensation should be limited in time, say two years, and be capped. For years I thought the annual cap should be set at $10,000 but given the severity of job and income loss during and since the Great Recession, a higher cap, such as $20,000 might be in order.

In 2016, CBO reportedly estimated the annual cost of wage insurance at about $3 billion annually, an amount that could easily be funded, if not part of a larger adjustment package, in various ways, such as through an increase in the federal unemployment insurance tax.

In his last State of the Union address, President Obama briefly voiced his support for a universal wage insurance program - one available to workers displaced for any reason - but given President Trump's continuing efforts to reverse anything that Obama implemented or endorsed, there seems little chance now that he would support the idea. That shouldn't kill it. Those Republicans and Democrats wanting to preserve freer trade and avoid a "techlash" against automation-driven productivity improvement should be interested in addressing workers' legitimate concerns about displacement. Wage insurance had bipartisan support in 2000 in the recommendations of Commission on Trade Deficit. The case for wage insurance is just as strong now - maybe stronger given current fears of automation - than it was then.

#3 Finance Lifetime Learning

Wage insurance is not a silver bullet to middle class anxieties. It is meant primarily to cushion the short-term pain of job loss and to ease transition to other jobs. In this respect, wage insurance is analogous to government assistance for apprenticeships, in principle a good idea and one for which additional government support also is appropriate, but a program likely to be limited to helping younger workers get their first, good job. Neither wage insurance nor apprenticeships are designed to facilitate the efforts of workers already in the labor force to move to new, potentially higher paying and ideally more secure careers.

For that, more than on-the-job training is required: in community or even four-year colleges, or for-profit institutes offering certificates for various kinds of jobs. At Brookings, Darrell West has written thoughtfully about how government can provide financial assistance for this type of continuous skills upgrading, in the form of new tax-deferred accounts (like IRAs) for retraining, with dollar-for-dollar government matches, up to $1000 per year.

I believe the government can and should do more, since many individuals may not be able or have the foresight to save up enough in their "Lifetime Training Accounts" (LTAs) to pay for training when they may most need it - when they're out of a job. As I have laid out elsewhere with Council on Foreign Relations Senior Fellow Ted Alden, government can solve this problem by extending "income contingent" loans, which so far have been made available for those attending college, to a wide range of training opportunities that individuals may want, or need, throughout their working lives.

Income contingent loans, as their label implies, are not repaid by regular repayments of some principal, with interest, but rather through repayments calculated on a percentage of the borrowers' income (more money borrowed, the higher that percentage, up to a ceiling). To prevent borrowers from being cheated by fly-by-night training centers, loan funds should be available for appropriately certified providers and/or for institutions that provide current information about their placement records post-training (with strong penalties for false reporting). To keep loan repayments manageable, the loan balances in these LTAs would have a lifetime ceiling (such as $50,000-100,000, inflation adjusted).

The budgetary cost for these lifetime training loan accounts should be limited. That is because only any subsidies related to the loans are counted as federal expenditures, not the loan funds themselves. To minimize the subsidy expenditure, the lifetime loan program can be structured so that income-contingent repayments from highly successful borrowers, who will repay more than they borrowed (up to a cap) largely, if not entirely, offset the costs for those borrowers, who for any number of reasons, are unable to fully repay their loans.

Cure #4: Target Distressed Places

Wage insurance and lifetime training accounts, as needed as they are, cannot help all workers who want to help themselves but are committed for family and other reasons to staying in parts of the country that are being or threaten to be left behind in our modern economy. The 2017 tax bill implicitly recognized this by offering generous capital gains tax incentives for investments in a limited number of high poverty "Opportunity Zones" designated by the states. But as Brookings Senior Fellow Adam Looney notes, the 2017 bill may simply promote real estate investments that increase land values in and thus "gentrify" poorer areas, doing little or nothing for the lifetime earnings prospects of poor people who live in them.

An alternative, and potentially more cost-effective approach, is to subsidize employment or jobs in lagging areas, as Benjamin Austin, Edward Glaeser and Lawrence Summers suggested in a paper presented earlier this year at Brookings, to appear in the next issue of the Brookings Papers on Economic Activity. Although the authors do not offer a detailed plan for doing this, a tax credit for new hires (so as not to provide windfall benefits on existing jobs) could be aimed at areas with abnormally high unemployment or poverty. Subsidizing jobs in such locations has the advantage of inducing investment along with it, which is not necessarily the case with targeted investment incentives only.

Concluding Thoughts

Worries about the job displacement effect of future automation nonetheless are so great that, according to the Pew survey already cited, healthy majorities (in the 60 percent range) support having the government guarantee a universal basic income (UBI) or establish a national service program to be a last resort source of employment. Apart from being unnecessary for reasons noted at the outset of this blog, neither idea is fiscally realistic, given an already large and growing federal deficit, but also due to pressing demands for added federal funding for other programs - for infrastructure and fixing Obamacare, to name just two obvious priorities - that would ease middle class anxieties.

Assisting those who help themselves, through programs like wage insurance and financial assistance for lifetime training, will be far less costly, and once Americans realize the full fiscal implications, far more politically acceptable, than paying people who can work but choose not to or running a potentially huge federal jobs program.

The middle class justifiably is worried about automation. Policymakers need to offer some practical solutions in response.

[1] Those co-authors include, in alphabetical order: Martin Baily, Lael Brainard, Gary Burtless, Lori Kletzer, Robert Lawrence, and Robert Shapiro.

# data[].attributes.attachment_link.description
For all the attention given by politicians in both parties to trade and globalization as a threat to the middle class, by far the most important, past and future, is automation - the replacement of tasks performed by human beings by machines, increasingly enabled by software, especially software that "thinks" or learns on its own, or "artificial intelligence" (AI).

# data[].attributes.body
What was your best takeaway from today’s meeting? Why?

# data[].attributes.body
The purpose of these meetings (speaker series) is to serve YOU, the businesses - what other topics would you like to see covered?

# data[].attributes.body
How can we, the Talent Network, support your businesses and help you grow and become more competitive within your areas?

# data[].attributes.body
Can you refer another business you think would benefit from involvement in these conversations?

# data[].attributes.headline
What is the hardest position your company is trying to fill? 

# data[].attributes.subject
What is the hardest position your company is trying to fill? 

# data[].attributes.body
What are the average wages in the upcoming position?

# data[].attributes.headline
Avoiding Supply Chain Breakdowns - Lessons Learned from the KFC Debacle. 

# data[].attributes.subject
Avoiding Supply Chain Breakdowns - Lessons Learned from the KFC Debacle. 

# data[].attributes.attachment_link.readable_text
The breakdown of Kentucky Fried Chicken's supply chain in the United Kingdom in February 2018 provides a cautionary tale about hidden vulnerabilities in supply chains that all organizations should note.

Two-thirds of KFC's nearly 900 UK locations were affected by the breakdown, which led to shortages of chicken, gravy, and many other supplies. Two months after the initial crisis, less than half of the locations were serving a full menu, according to HuffPost UK.

The situation has been more than just a PR and logistics nightmare for company executives. KFC's parent company, Yum Brands, reported on May 2 that the supply chain problems would negatively impact earnings.

What went wrong, and how can organizations prevent themselves from falling into the same trap?

The key breakdown in the KFC supply chain centered around the food chain's recent switch from a specialty food distributor to a mega-freight forwarder, DHL, which, like many third-party logistics (3PL) companies, owns very few physical assets. These 3PL companies rely on a complex patchwork of individual trucking companies and other carriers to deliver their service.

Organizations should take specific measures for creating visibility in the vendor supply chain when it is dependent on 3PL providers.

Companies should work with their 3PL partners to keep track of which carriers will be used for their shipments and ensure that their quality and security requirements are cascaded down to subcontractors in contractual language with the 3PL.

Companies should clearly define key performance indicators with the 3PL partner and minimum standards for carriers that they use.

Logistics buyers should conduct in-person checks of at least a slice of the 3PL partner's subcontractors to directly check out their quality, business continuity, and security practices.

In addition, companies should work to identify where their supply chains run through regions that are vulnerable to disruptive local events and build in redundancy there to circumvent disruption or supply chain bottlenecks. Localized low-impact, high-likelihood events pose risks to supply chains around the world without making international news and can create "cascading risk" in which disruptions in one part of the supply chain create additional problems downstream.

Companies should speak with vendors about how local events affect them and what contingency plans they have in place, as well as engage with external geopolitical risk experts
who can offer unbiased analysis and context.

Communication and cooperation between the teams examining the supply chain - business continuity, procurement, logistics, and so on - is essential to reduce silos and mitigate overall risk. While many organizations seek to simplify and streamline their supply chains to maximize efficiency and profitability, Pelli warns that reducing redundancy can also introduce risk, fragility, and an increased potential for disruption.

Complex supply chains can hide diamond-shaped chains, in which most or all vendors source a component from a small group of suppliers. For example, dye pigments used in many manufacturing industries are only made by a few factories in one region of Japan. A natural disaster in that region that halted production would disrupt all industries that use that pigment.

Having one company coordinate all activity can lead to an onion-like structure of contracting and subcontracting that reduces visibility into who is actually carrying a company's cargo at any point in time. This increases the difficulty of ensuring quality and security through the distribution chain.

In some cases, it may be more sustainable in the long term to work with a roster of several approved logistics companies, granting delivery lanes to each one depending on where their networks are the most dense and robust. Companies can then compare performance across lanes and re-allocate them as the better performing providers rise to the top.

Working with multiple logistics providers serves as a sort of insurance policy. In case there is a business continuity issue with one of them, one (or several) of the others may be able to fill in.

If you take basic precautions to protect the integrity of your supply chain today, your organization will be more likely to operate uninterrupted - preventing future headaches and negative headlines in the future.

# data[].attributes.attachment_link.title
Avoiding Supply Chain Breakdowns: Learning From the KFC Debacle

# data[].attributes.attachment_link.description
The breakdown of Kentucky Fried Chicken's supply chain in the United Kingdom in February 2018 provides a cautionary tale about hidden vulnerabilities in supply chains that all organizations should note. Two-thirds of KFC's nearly 900 UK locations were affected by the breakdown, which led to shortages of chicken, gravy, and many other supplies.