Tag Archives: robotisation

Facebook AI Research Team Shuts Down Negotiating Robots

Facebook has shut down two robots after they abruptly stopped using English and invented their own language while conducting a negotiation exercise.

There have been a flurry of reports over the past week about Facebook’s decision to shut down two chatbots – named Bob and Alice – after they developed a coded language that was incomprehensible to humans.

The initial experiment involved a simple conversation between one human and one chatbot where they negotiated the sharing out of some items – books, hats and balls. This conversation was conducted in English, along the lines of “give me one ball, and I’ll give you the hats”.

So far, so good. But when the human was removed from the conversation and two chatbots were directed at each other, the way they communicated immediately became difficult for humans to understand.

Bob: i can i i everything else . . . . . . . . . . . . .

Alice: balls have zero to me to me to me to me to me to me to me to me to me

Bob: you i everything else . . . . . . . . . . . .

Alice: balls have a ball to me to me to me to me to me to me to me

Bob: i i can i i i everything else . . . . . . . . . . . .

Alice: balls have a ball to me to me to me to me to me to

Bob: i . . . . . . . . . . . . . . . . . . .

Some media commentators have labelled the development “sinister”, with frequent references to Terminator, Skynet and – of course – Frankenstein appearing in related coverage. But Facebook researcher Dhruv Batra told Fastco that there was simply no guidance set for the robots to stick to the English language. “Agents will drift off understandable language and invent codewords for themselves.” Essentially, the bots found a more efficient way of communicating with each other.

Setting parameters

The topic of negotiation and AI came under discussion at a recent Negotiation Roundtable organised by CABL (Conti Advanced Business Learning). The attendees agreed that if a robot is going to run a negotiation, it requires very clear guidance around the parameters and objectives.

Another concern about AI being involved in commercial negotiation is that at present, they are unable to understand emotional intelligence. Thierry Blomet, Senior VP of Global Sourcing at Kemira, says that “Until we completely remove the emotional aspect, AI cannot run negotiations. Body language and emotional reactions are intangible, and are most unlikely to be modelled by programmers.” In the case of Facebook’s Alice and Bob, the human factor was removed.

Blomet points out that AI can play a valuable role in complex scenario modelling, which would be “much more complex than even the smartest procurement brain could manage. Whatever might happen in the negotiation would be included in that model, with the answers already pre-empted.”

Laurence Pérot, Head of Global Supply Chain Procurement at Logitech, agrees. “Big Data and AI will lead to much more efficient scenario modelling, particularly with supply chain, logistics and transportation bids.”

Orestes Peristeris, Supply Chain Expert at Yale, comments that ultimately, it’s about quantification and sophistication of statistics. “Do you have the data in the same place and in one system? What can be quantified and what cannot be quantified objectively? There are some things that can be used, some things we know will happen with some certainty, and some things that can’t be quantified. Finally, we’ll always need humans to take the outcomes of Big Data and apply it to the business context.”

As for the future of procurement negotiation, perhaps one day we’ll see buyers and suppliers lining up their chatbots against each other and letting them negotiate in rapid, complex code.

May the best bot win.

In other procurement news this week:

Hackett research reveals dramatic savings from digital transformation

  • New research from The Hackett Group has shown that the potential cost take-out opportunity through digital transformation is up to 24%, through the implementation of robotic process automation, advanced analytics, cloud-based applications and other approaches.
  • The research has also revealed that world-class procurement organisation now operate at 22% lower labour costs, have 29% fewer staff, and generate more than twice the ROI of typical organisations, with over $10 in savings for every $1 of procurement operating costs.
  • The Hackett Group’s Christopher Sawchuck commented that procurement technology has reached an inflection point: “World-class organisations can continue to reduce costs by embracing digital technology, and typical procurement organisations can leverage the same technology to catch up faster at less cost.”

Download the research here: http://www.thehackettgroup.com/research/2017/wcpapr17/SalesForce-World-Class-Advantage-17Q2-PR.html

Collaborative Robots to Boost Warehouse Productivity

  • In a shift away from the apparent race to replace humans with robotic workers, firms are designing robots to work alongside people in warehouses and boost productivity.
  • “Collaborative” robots can have a variety of uses, including leading human workers to the exact location of a product, or carrying goods from one part of the warehouse to another. DHL, Bonobos and Zara are known to be experimenting with the technology.
  • The robots – costing tens of thousands of dollars – are relatively cheap when compared with the vast amount of conveyor belts and automation systems included in a typical warehouse.

Read more: The Wall Street Journal

Interested in attending a CABL Negotiation workshop? Visit http://www.cabl.ch/ to find out more. The founder, Giuseppe Conti, has over 20 years of Procurement experience with leading multinationals and over 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

The Flaw At The Heart Of Trump’s America First policy

5.6 million U.S. manufacturing jobs didn’t move to China and Mexico – they simply disappeared with the march of technology. And that’s the flaw in America First! 

Trump’s stunning election win has been linked to his successful portrayal as both a friend of Corporate America and a champion of the working class. His business-friendly policies include large-scale deregulation, slashing tax rates and a huge infrastructure spend, which (in theory) are designed to boost jobs through trickle-down economics.

But the support of Corporate America isn’t enough to remain in power. In order to retain the presidency for another four years after the 2020 election, Trump will have to deliver on the key promise that won the support of the disillusioned working class – bringing industry home and reviving jobs in America’s once-thriving industrial rust belt.

However, there’s a miscalculation at the heart of the rhetoric around bringing jobs back from overseas factories.

Robots, not overseas workers, have taken 85% of manufacturing jobs

A recent study from the Centre for Business and Economic Research at Ball State University found that:

  • Employment in the manufacturing sector fell by 5.6 million between 2000 and 2010.
  • Productivity growth (automation) accounted for more than 85% of jobs lost in manufacturing in this period.
  • Only 13% of the overall job loss resulted from trade (including Chinese imports).
  • Meanwhile, U.S. manufacturing output has risen steadily, growing 17.6% between 2006 and 2013.

Simply put, American factories – and factories worldwide – are producing more goods with fewer people. Automation is rendering millions of low-skilled jobs redundant, yet Trump’s key policy aim to “bring back jobs” seems to be mistakenly focused on increasing trade protectionism.

Protectionism could backfire by further accelerating automation

ABC’s business editor Ian Verrender writes that even if Trump “slaps massive import duties on Chinese goods and forces his country to start producing everything at home via the magic of ‘America First’”, it risks leading to a domino effect where business will be forced to find efficiencies in order to survive.

  1. The loss of access to low-cost labour would drive up the cost of consumer goods, meaning Americans would find themselves unable to afford the goods to which they’ve become accustomed.
  2. This lack of affordability would spark demands for wage rises.
  3. Firms would respond by pushing even further into automation, using robotics and AI to cut costs.

Verrender comments: “Where once corporations scoured the globe for low-cost labour, and duly shifted their operations, they [would] now seek ways to eliminate labour altogether, particularly in manufacturing.”

Accelerating automation is inevitable

The loss of jobs to robots is only expected to broaden and accelerate. A report from two Oxford researchers found that an incredible 45% of U.S. jobs, across all sectors and professionals, are vulnerable to being automated within the next 20 years.

For example, self-driving technology alone could lead to the unemployment of 1,000,000 truck drivers in the U.S., along with approximately 160,000 Uber drivers, 230,000 taxi drivers and over 600,000 bus drivers.

Some of the big names to comment on the coming social disruption include Stephen Hawking, who wrote last year: “The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”

In February, Elon Musk asked the audience at the World Government Summit in Dubai: “What to do about mass unemployment? This is going to be a massive social challenge. There will be fewer and fewer jobs that a robot cannot do better [than a human]. These are not things that I wish will happen. These are simply things that I think probably will happen.”

Bill Gates commented: “You cross the threshold of job-replacement of certain activities all at once. Warehouse work, driving, room clean-up – there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, [will go away].”

What’s the answer?

Marc Benioff, chief executive of Salesforce.com, warned the World Economic Forum in Davos of the “digital refugees” that would be created by AI. “This is the moment … when we have the highest level of anxiety because we can see advances in AI that are beyond what we had expected,” he said. “It’s happening at a rate and a capability that we are worrying about how it will impact the everyman, the broad range of workers around the world . . . There is no clear path forward”.

One hopeful sign is that a public discourse on the disruptive effects of automation has begun. Thought-leaders have already put forward some solutions, although they may seem politically unpalatable at present. Elon Musk recommends that the U.S. adopts a universal basic income (such as that being trialled in Finland) to keep the economy going and guarantee a standard of living for the millions of workers expected to be displaced by automation. Bill Gates has suggested taxing robotic workers to recapture some of the money displaced workers would have paid as income tax. Education, too, will need to transform to equip future generations with the skills needed to find work in a highly-automated future.

Although Trump appears to be currently focused on the wrong job-stealing “villain” (China), there is hope that leaders will listen to the likes of Bill Gates and Elon Musk and start planning ahead for the social upheaval of what has been dubbed the fourth industrial revolution.

In other news this week:

France passes “duty of vigilance” supply chain law

  • Last week, France passed a law that pushes for accountability for multinational companies sourcing from global supply chains.
  • The “duty of vigilance” law requires companies to establish safeguards designed to ensure that labour rights and other human rights are respected in the production sites they source from.
  • The law requires large companies based in France to create a document that sets out their procedures for evaluating suppliers and mitigate human rights abuses. Violating the “duty of vigilance” law can lead to a penalty of up to €10 million.

Read more at Supply Chain Dive

Trump seeks historic increase in military spending

  • President Trump’s first budget seeks to boost military spending by $US54 billion. The US currently spends about $US584 billion annually on defence.
  • If passed by Congress, the 9% increase will be funded by cuts to non-defence spending, including environmental programs, diplomacy and foreign aid.
  • Last year, the rest of the world combined spent a total of $US317 billion on defence. The highest-spending countries under the US were China ($US146 billion), Saudi Arabia ($US82 billion), Russia ($US66 billion) and the UK ($US56 billion).

Read more at ABC News

Keen on the Internet of Things? Beware of IoT Botnet Zombie Attacks!

Everyone’s talking about the Internet of Things and all of the exciting things it can do for us! But just how much have we considered the possible security risks? 

What’s All the IoT Fuss About?

CPOs are becoming ever keener on enhancing hyper-connectivity within their organisations using the Internet of Things. This is unsurprising given the potential opportunities for procurement teams; warehouses that can tell you what parts you’re running out of and reorder them for you, more efficient processes and the chance to revolutionise how they manage supply chains.

Of course, it’s not just businesses that will benefit from IoT. Early adopters are already using IoT in their homes with smart fridges, smart toasters and smart collars for their pets. Experts predict that by 2020, more than half of new organisations will run on IoT.

Given all of these benefits, you might well ask what’s not to love? Well, judging by recent events, it might be prudent for us all to exercise a little more caution as far as IoT is concerned. As it stands, the process is wide open to cyberattacks.

Botnet Zombie Attacks

Individual devices pose almost no threat to any computer or data centre but what happens if millions of them were taken over at once? IoT devices are likely to have weaker security (research suggests that default usernames and passwords for devices are rarely changed), which makes them an easy target. Hackers will pre-program their malware with the most commonly used default passwords in order to hack multiple devices.

Back in October, an IoT botnet, Mirai, attacked a number of the internet’s websites including Spotify, Netflix and PayPal. The botnet works by consistently searching for accessible IoT devices protected by default passwords. Once these have been identified, the malware turns them into remotely controlled bots and is able to use them for large-scale network attacks – think robot zombie army!

This week, computer security journalist Brian Krebs posted an article on his blog, Krebs on Security, revealing the identity of Mirai author to be Paras Jha, owner of a DDoS mitigation service company ProTraf Solutions and a student of Rutgers University. Whilst Mirai has only been used mischievously so far, to shut down certain sites, the actions have brought to question what damage could be inflicted by real cybercriminals.

The Worst Case Scenario

Whilst the Mirai October attacks were relatively harmless and only resulted in some websites crashing, some tech commentators are regarding it as a test-run. It’s concerning that the next botnet attack could be aimed at data theft or physical asset disruption.

As Krebs stated in his blog “These weapons can be wielded by anyone – with any motivation – who’s willing to expend a modicum of time and effort to learn the basic principles of its operation.” Someone with a grievance against a particular website could easily have it taken offline or simply employ a hacker to do it for them.

It’s especially concerning to imagine the consequences of IoT devices being hacked within critical or high security areas such as hospitals, banking, government, transport etc. Time will tell if we are able to secure IoT before we are subject to further, and perhaps more significant, botnet attacks.

What Can Be Done?

How can individuals and organisations improve their IoT security and prevent cyber attacks? We’ve put together a quick checklist to help you strengthen your security.

  • Use strong login passwords for all your devices and strong Wi-Fi passwords. A strong password contains upper and lower case letters, numbers and symbols.
  • Make sure all the software you use is fully updates – this can fix security flaws.
  • Don’t open mysterious email links or attachments – if you weren’t expecting it, don’t open it!
  • Never reveal card information.
  • Don’t trust anyone who calls you to discuss your computer or devices – hang up the phone.

What do you think about the IoT security risks? Should CPOs halt their investments and wait for the cybersecurity to catch up with the technology? Let us know in the comments below.

Here’s what else has been going on in the world of procurement this week…

Trump Kills TPP

  • President Trump upended America’s bipartisan trade policy on Monday as he formally abandoned the ambitious, 12-nation Trans-Pacific Partnership.
  • In doing so, he demonstrated that he would not follow old rules, effectively discarding longstanding Republican orthodoxy that expanding global trade was good for the world and America.
  • Although the Trans-Pacific Partnership had not been approved by Congress, Mr. Trump’s decision to withdraw carries broad geopolitical implications in a fast-growing region.
  • Trump said American workers would be protected against competition from low-wage countries like Vietnam and Malaysia, also parties to the deal.

Read More on New York Times

Wal-Mart Cuts 1,000 HQ Jobs

  • Wal-Mart Stores began a round of some 1,000 layoffs at its corporate headquarters, with most cuts targeting the retailer’s supply chain operations.
  • The shakeups, which have been expected, suggest that Wal-Mart is willing to undo much of the work in its existing e-commerce operations in favour of Jet’s signature pricing and fulfilment algorithms, which reward shoppers in real time with savings on items purchased and shipped together.
  • The dent in its supply chain ranks could undermine one of Wal-Mart’s core strengths: its highly efficient brick-and-mortar-based distribution system.

Read More on Retail Dive

Samsung’s Exploding Galaxy Note7 Blamed on Battery Suppliers

  • Approximately 2.5 million phones have been recalled by Samsung due to explosive defects of the Galaxy Note since September 2016.
  • Recalls happen all the time, but while the Samsung case rose to infamy due to its flammable and potentially injurious nature, the revelation that Samsung’s primary and backup suppliers independently produced a faulty phone component is equally remarkable.
  • What was a supply chain problem was resolved by an operations solution in this particular case. However, batteries will be subject to more strict quality controls to avoid future issues.
  • Previous analyses also have suggested Samsung’s rush to production — both before and after the first recall — may have also impacted the finished good’s quality.

Read More on Supply Chain Dive

Procurement Salaries On The UP In 2017

  • Procurement professionals can expect to see pay rises averaging 10% in 2017, according to a salary survey
  • However, contractors will get the biggest rises – 15% – while permanent staff can expect to get 4%
  • Sam Walters, associate director at Robert Walters, said: “Across all levels of seniority we have seen demand grow for high quality procurement professionals over the past year, with those with IT procurement experience being particularly highly sought after

Read more at Supply Management

Why Automation Can Help Procurement Achieve Its Goals

Automation is frequently talked about in manufacturing, but rarely in the field of procurement. Could it be the key to helping procurement achieve better outcomes?

Automation and Robotisation

Download GEP’s white paper on achieving P2P Excellence through Procurement and Finance alignment here.

Czech writer Karel Čapek was the first person to use the term “robot”.  In his 1920 play “Rossum’s Universal Robots”, he conjured the image of synthetic humans, carrying out the tasks that original humans no longer cared to do, yet remaining largely happy in their work. For a while.

Inevitably things went South, so to speak, and the robots learned to resent their drudgery.

Stories of automation leading to unforeseen misfortune are at least as old as Goethe’s 1797 poem, “The Sorcerer’s Apprentice”. Yet automation remains a goal, if one that is not without challenges.

Automation in Procurement

Automation is often seen as a good thing, because it accelerates processes (sometimes) and frees up valuable human resources (sometimes). In the context of manufacturing, introducing automation has been hugely successful because of the requirement for a production line to continually repeat identical tasks within exact specifications. Automation is therefore understood to be just that, the effective ‘robotisation’ of a process.

In a sense this is also desirable in Procurement because a good percentage of the tasks and processes are repetitive and of the same type. However, that is not the same as being identical, and it is often less than desirable to force a range of different variants into a single model.

Thus, what we need is the acceleration of the process and the reduction in administrative overhead but still maintain the unique aspects of each event in the process. This is where automation gets tricky.

Importance of the ‘Right’ Process

From the perspective of software design, the practitioner must be able to automate those parts of the process which are identical time after time, and permit the customisation of those parts that are unique, whilst accelerating the whole.

This is where an understanding of Procurement (and associated processes) is key in the design and implementation of the software.  As one of our senior project managers put it, “It is not a good idea to use automation to accelerate a broken process.”

What he means by that is this: whereas in manufacturing, the process of machining a particular widget by hand is already the ‘right’ way to do it, and automation simply repeats the task; in Procurement it cannot be taken as read that the sourcing methodology, contracting process or requisition-to-invoice workflow, are in any way the ‘right’, most efficient, or best, way to go.

In reality, then, for procurement software to provide a solution it must involve not only automation, but transformation. Using the imposition of an automating technology to review where the challenges in the current manual processes lie is a vital part of any such program. That way the eventual automation of the task will be more accurate and, ultimately, more useful.

Accounting for Whole Process

Another key consideration is best made with a manufacturing analogy again. If the entire process from raw material to finished goods is automated, then the rate of arrival of the end-product at the packing and shipping station will be considerably greater than in the pre-automation set up. If account hasn’t been taken of the impact ‘downstream’, then one can foresee the conveyor belt of products backing up and overflowing.

In Procurement this can be a real issue. Accelerating the order-to-invoice process is all very well for purchaser and supplier, but if Accounts Payable are periodically swamped with invoices to be paid, there can be significant impacts on administration overheads and, indeed, cash flow.

Furthermore, an accelerated sourcing process only works if the suppliers are on board, and a super-efficient bid-to-contract process will only work if the company’s attorneys buy in to it.

Thus automation is far from being a matter of “install software, use software, improve efficiency, get ROI”. Get it wrong and it can be a matter of “install software, use software badly, make matters worse, stop using software, can project, start again”.

But get it right and the “automation” program can see dramatic impacts on time to reach savings goals, supplier engagement and performance, and cash flow management downstream.

GEP have produced a white paper on the challenges facing the marriage of convenience between Procurement and Finance which explores these ideas further. You can download it here.