Dr. Yossi Sheffi is a professor at the Massachusetts Institute of Technology, where he serves as Director of the MIT Center for Transportation and Logistics. He is an expert in systems optimization, risk analysis, and supply chain management, which are the subjects he teaches and researches at MIT. He founded the MITx MicroMasters in Supply Chain Management. He is also the founder and the Director of MIT's Master of Supply Chain Management degree.
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Dr. Yossi Sheffi is a professor at the Massachusetts Institute of Technology, where he serves as Director of the MIT Center for Transportation and Logistics. He is an expert in systems optimization, risk analysis, and supply chain management, which are the subjects he teaches and researches at MIT. He founded the MITx MicroMasters in Supply Chain Management. He is also the founder and the Director of MIT's Master of Supply Chain Management degree.
Discover more details here.
Some of the highlights of the episode:
Follow us on:
Instagram: http://bit.ly/2Wba8v7
Twitter: http://bit.ly/2WeulzX
Linkedin: http://bit.ly/2w9YSQX
Facebook: http://bit.ly/2HtryLd
Hello and welcome to the leaders in supply chain and logistics podcast. I am your host Radu Palamariu, you global logistics and supply chain, practice head or Morgan Phillips, executive search, specializing in global board level and executive search. My job is also to connect you with global experts, thought leaders and executives in all things supply chain, and today I'm delighted to have with us Dr. Yossi Sheffi, professor of engineering systems of the Massachusetts Institute of Technology where he serves as director of the Mit Center for transportation and logistics. Professor Sheffi, he is an expert in systems optimization and risk analysis and supply chain management, which are the subjects he teaches and researches at mit. He's the author of many scientific publications in five books are urban transportation networks, equilibrium analysis with mathematical programming methods, the resilient enterprise overcoming vulnerability for Competitive Advantage published in 2005 logistics clusters, delivering value in driving growth published in 2012. The power of resilience and how the best companies manage the unexpected published in 2015 as well as his latest book. Balancing Green went to embrace sustainability in the business and when not to publish. This year in 2018 under his leadership, Mit, a center of transportation and logistics, launched many new educational research and industry and government outreach programs leading to substantial growth. He founded, uh, the s, a x micromasters in supply chain manager management and he's also the founder and the director of Mit's master of supply chain management degree, also led the international expansion of mit by launching the Mit Center for transportation and logistics by launching the supply chain and logistics excellence scale in short, global network of academic centers of education and research the network current thing centers model the after Mit ctl in Zaragoza, Spain, Bogota in Columbia, Luxenberg Ningbo in China as well as Kuala Lumpur in Malaysia, outside the university, Professor Chef, he has consulted with governments and leading manufacturing, retail and transportation enterprise is all over the world and he's also an active entrepreneur and has founded and cofounded five successful companies. Professor chefy does an hour, our honor and a pleasure to have you with us today. Thank you for this introduction. I'll pleasure. Um, so let's, uh, let's, uh, dive in a little bit and talk first about your latest book balancing green went to embrace sustainability in a business and we're not, um, basically, uh, as far as we know you have, you have done extensive interviews with more than 100 executives, challenges, solutions and implication that traditional business bills with sustainability. Tell us a little bit of what's realistic overview of how executives should think about this initiative.
Speaker 2:Executives are kind of big attack from all sides in one sense. They need to, um, provide profits that need to provide growth. They need to provide employment, they need to provide the goods on data
Speaker 3:and people want them to, to make sure that the company is secure, that the take care of environmental issue, they take care of social issues lately even political issues. So companies are always under pressure and one has to realize that the NGOs and I, there are groups who are applying this pressure, should realize that it's actually not apt to companies to, uh, to be environmental hoarder of the flakes. Companies have to respond to what the customers want or what the consumer wants. It turns out only very few people are willing to pay for sustainable product to be sure in all kinds of interviews and questionnaires, lots of per that are willing to pay for more sustainable. The product turns out that when you do actual experiments in supermarkets and other places, you'll find five to 10 percent are willing to pay a little bit more and even in discuss just a little more for sustainable products. So companies should not to in some sense too much because until the market will change, they cannot do too much. And if the market change, of course companies will respond, that's they're reasonable. Yeah.
Speaker 1:Yes, yes. And then that's an excellent, excellent point. And thank you for that. Um, and I think it's a, it's a central point of your writings because for companies, sustainability is not a simple case of profits versus planet, but it's more of a subtle issue, right? Of, of people versus other people, you know, those looking for jobs and inexpensive goods versus those are who are maybe looking for Pristina and safe. And and, uh, environment for the future, for the future of their generation. So the question is how far one should go with the sustainability in the first place.
Speaker 3:Okay. Until people are, first of all, do people are willing to pay for it? The company should be very careful in effect to going some, but not too much. The idea is in. So once your company, a company's been doing, they're actually with their executive, believes that it's a Chinese hoax or the challenge of our times doesn't actually matter. That's one of the points in my book. It doesn't matter the personal belief of the executive because there are reasons to do it, whether you believe it, I believe it or not, a reason not to do, not to go too far. The reasons to do it. Our festival, many sustainability initiative also lead to reduced costs. The poster child for this is and cutting energy. Whether you are installing, you know, when or re, uh, all kinds of change. Light Bulbs. So put regulators on your truck so they cannot go too fast. All of these lead to reduction in energy use and reduction in cost. So this is a win win situation, you reduce carbon footprint and your reduced cost. There's no reason not to do these things. The second reason to do something and make sure that you are not an outlier or does nothing is risk management. You don't want it to be the subject of attack by an NGO that there are many cases in my book and of course a fair NGO attack that catching the media attention and then listening to reduce sales and the last of us have market value. So you want to do some things just to make sure that you are not the target of Ngo and the media. The third reason to do it, some hedging, there are some evidence that the young people, millennials, are more attuned to environmental concerns. So in that sense, one should the, once you the hedge hedge their bets and the many exemptions, for example, caloric started then that whole line of fair environment, environmentally sustainable product, which they called greenworks. It's a$40,000,000 line of products which is a$2,000,000,000 company. It's, it's around the fairer, but it lets them understand the chemistry. Understand suppliers, understand a consumer in this market, so even the market changes, but if changes their winning positions. So this is some of the reasons that people should do it. But as I said, you cannot go too far, you cannot invest your way out of profitability because if customers are not going to bite the goods, it doesn't matter.
Speaker 1:Yes. Yes. And an excellent. I mean, thank you for the, for the summer. So if I can recap in ensure there's three big and main reasons why companies really need to look into this. One is of course cutting costs, reducing costs and other one is reducing the risks of exposure to ngos. And another one is some sort of a combination of hedging and, and achieving growth. Um, and, and also that combined with the fact that, that you were saying just now that, that the companies are kind of under pressure from, from all this size. Um, and you, you gave a very good example in the book I think where you talk about specifically about Walmart, right? Where they were, Walmart worked with various stakeholders to develop seafood certification programs that actually support the sustainability. But then, uh, in 2015, the Greenpeace a actually a tech Walmart because they will not doing enough, uh, as, as a, as a, in this situation, uh, on, on the other side of the story where the Alaskan fisherman and state officials were complaining to Walmart that the company was asking too much of them. So I mean, I guess the question is what's the best way to go around it?
Speaker 3:Sure. In this particular case, which is an example of, you know, the no win situation of companies are facing in this particular example, Walmart reduce the standards in fact, and they were responsive to the Alaskan fisherman. And the argument that they admitted at the time was that the fishermen are going to sell their fish. So the question is, are going to sell it through Walmart with some environmental restrictions or settings on the opera Margaret with no environmental restriction. So one more decided to discount, so reduced their street stringent requirements. Just bowing to the fact that the fish are going to be sold with a walmart, send them or a competitor systems, but in general it means that companies should say, should do something but not too much either because in this case the supply, but in most cases it's because customers are not willing to pay for it. So should do some but not too much.
Speaker 1:Yes. I mean it boils down and I, I think we, we hear your message very loud and clear. It boils down to practicality, right? It's a, you can't be too far away from the, from the market. You got to keep your feet on the ground and, and, and be realistic about it. And whilst you know, everybody wants and of course cares about the environment. If ultimately your customer and your consumer is not going to be paying for it, you can sustain the business,
Speaker 3:uh, for the tier. And just follow up on a, on a good summary. The issue is some people casting is a moral issue, you know, it's a morally I have to do the minute it discusses catching more of an issue. The debate is over and that as many cases when they presented it and people very angrily told me that it's a moral issue and one has to do this, the right thing to do at this point, the debate is over this an example of losing the debate because people who don't want to do it with saying their opinion and people who to care about their opinion, just like Democrats and Republicans abuse the US not talking to each other and not finding any solution you cannot cuss is a moral issue because then if you say it's more an issue, I mean that nobody's here. Both sides are right. Most people who want the job and being able to afford goods and people know on pristine environment that will thrive. So we need to talk to each other and find practical solutions. Yes. Excellent.
Speaker 1:Excellent. Dead on. Um, and, and, uh, and, and just to add to the point, because you mentioned it, that the, that you're seeing more and more that younger people
Speaker 4:are more environmentally aware. They are more susceptible, I guess, to, to care and look at where are the goods coming from. Are they from a sustainable source? Uh, what's your views? I mean on the longterm, and obviously generation y and the younger generations are more and more going to take over the market on this as buyers and consumers. Uh, what's you're using on the longer term, let's say 10, 20, 30 years from now? No,
Speaker 3:no political scientists, young people are Democrats, people, Republicans, and it's the same people orders and more means money. They become more concerned about money and less concerned about ideas. It's not clear if this hadn't happened in this case to what may happen is that we may have more storms and more flooding and it was getting to the consciousness and people who will be willing to pay for his people will cry for more regulation, whatever, and we will see some changes changes in the market right now, the tuition for the people who care more for the young people don't have money so they don't move markets. The second one should not forget, these two thirds of the world are living on a few dollars a day and can't even afford to think about the environmental sustainability. We have a whole issue of the developing world that is not there and what's consumers in this part of the world can't even think about it. For them it's a luxury good. So let's get you at least think about how much the market can move in the next 10, 20 years later maybe. And as I said, the one thing that they can move the market is if it's become more apparent that the global warming is dangerous and right now when does some, you know, White, the bears on the optics are not really making an impact yet. If there'll be, there'll be an impact of we see places like Shanghai being flooded or New York. I think they should make more of an impact than we may start seeing more of a more of an awareness, but the beer wine. Yes. Excellent. I'm in it and hopefully it won't be today because sometimes things happen in the man that navy. Don't forget, don't forget the oven the meantime. A lot of people are working about technology from carbon sequestration, all kind of other technologies that came. We may have a little logical solution. Yes. So this is, we shouldn't, we should not forget that there are many things that have to do. Is supply chain like three d printing, that's mainly, I'm an oculus transportation because you're, you remember no fixturing and locally there'll be very few British apply just suppliers for materials without not too many tiers of the bill of material. So it said there are some things that can, that may change, change the picture in terms of technology, but it will be awhile.
Speaker 1:Yes, yes. And coming back a little bit to the, to the price premium, right? That, that typically comes with a, with a, with a more sustainable goods produced goods. Um, and it, it, this is also related to, to, uh, to the brand, right? Because typically the brand, the symbolizes quality or symbolizes a youth or other desirable attributes. For example, if we take Forbes valuation of the Coca Cola brand, right? Which is over$50 million, uh, based on the brand contribution to sales, it's, it's an incredibly powerful brand. But this brings us to the question, you know, our companies that have this type of very valuable brands, particularly susceptible to pressure from the nongovernmental organizations and their campaigns. Uh, and, and who else would be susceptible to this? What's your views?
Speaker 3:The answer is categorically yes. By the way, this internal estimates by these companies like Coca Cola and Disney and apple and others are even higher than the Forbes estimate. So they, they think that the brand is everything, you know, for most of their market value. So companies are sustainable of course, companies who are not only brand company was selling to consumers and they have a brand like coca cola, like Disney also in particular companies who sell to children. So toy companies, people care about this. Um, so it's a, this is. People don't want to feel that these companies care about everything about the environment, about social responsibility. I don't know about everything else. So these are some, a vulnerability here. Other companies are vulnerable. Are companies like this company is a very deep bill of material because it had many, many suppliers because one of the suppliers will do something bad and usually the Ngo will take the original equipment manufacturer or they the consumer facing company rather than the uh, uh, the offending supplier somewhere in the bowels of, I don't know, Vietnam or Malaysia or China or whatever. Last thing which is really interesting is companies that have no halo effects, companies like Amazon, Amazon kind of, you know, working for Amazon, whether along the supply chain. It says Fox. Com, for example, makes the echo speaker, listener, whatever you call it, the Ai device that goes them with horrible working conditions. Also working conditions in the Amazon warehouse in Europe and the United States. I really bad and I'm assuming as a company, everybody loves everybody. Bikes. Amazon texts that takes us up. They are being attacked, but the media doesn't pick it up. It doesn't stick. So companies that don't have the halo that very few companies that have like Amazon, others if consumers seem to love. Um, so if you are selling to consumers, if you're in an area that you are a company that they are not particularly love and if you have deep dear supply chain where some suppliers that may be hiding in tier three, four or five and you don't even know about them and once they do something bad, pollute the local rivero, use a forced labor. You are being. I take these are the companies that are risk.
Speaker 1:Yes. Excellent, excellent examples. And uh, um, and then this, this, uh, this makes me remember the another example and I think it's a company that did tremendously, uh, well on this, on this topic. It's, it's Unilever. So if you, if you remember professor, I mean they started, they embarked on this journey I think a couple of years ago when they made the vision of the company to be extremely focused on the communities that they serve and also in terms of their supply chain to go green. And uh, and basically I think they will move towards zero waste. A target was something like 20, 22,000, 20 or 2000, 25 and they already managed to achieve it. So, which was fantastic, but I think their initial, um, their initial intent was actually deeply rooted in this argument. I mean, I don't know if you want to call it an argument, but it's basically a fundamental that they want to be seen and perceived as a company that cares about the environment, cares about the community and so on.
Speaker 3:Yeah, they do a lot. In fact, the, uh, the current CEO took over several years, six, seven years ago. He really started eating kind of. The company does some tremendous things. For example, with the, uh, the, the, the biggest producer in the world, and they take a lot of care in terms of not only using sustainable growing, um, procedures. They're also educating the Tigres the plantation, how to do better. So both to get higher yields in booth in a more sustainable fishing. I should make one comment about a year ago, two years ago, the Financial Times had an article that said the during pole pole montelier the, a unilever went up 40 percent. That's good until you realize that the, um, the stoke of the competing companies on David went up 100 percent and they say this may be, maybe they put too much emphasis on sustainability, but by and large Unilever throughout the company that they really care about this and they seem to be trying to do, to do the right thing by the way in term in terms of big companies that are really out there
Speaker 1:in front and then shifting a little bit and then I know you argued the case. So there is a case in the book, the sustainability is in fact the supply chain issue. Um, so I have to ask. Oh, should I have to ask the question why? Why, why do you argue argue that it is a supply chain issue? Impact.
Speaker 3:Oh, okay. Let me give you a few example. Coca Cola, for example, said that the daycare about water use, of course that's the, you know, the main environmental impact and they claim that they claimed they were proudly, I'm making the case that they reduced the number of liters per liter of coke from about six point two or six point three to about three point five, almost 50 percent reduction in the number of liters of water being used to make a liter of coke in the bottling plant at the same time. They use over 220 liters of water growing the sugarcane that is used for the sugar into cove. So it's saying that, you know, reducing but religious, it's nothing, uh, equity talks all the time. Companies like apple or Microsoft or Cisco, the don't make any product very easy for them to be, um, you know, not to have a large carbon footprint, but you have to include the carbon footprint and the processes and their suppliers at Foxconn to whoever makes the product because otherwise they're responsible for it. If epicenter, iphone, and the entire supply chain that makes the part gets the stuff, the commodities from the ground is part of it because what you have to look at is, let's say if there will be no iphone, then you will not have this entire supply chain. So it's really a supply chain issue by the way. For many companies, over two thirds of their, uh, carbon footprint is in their supply chain. For some companies, most of the carport is in the youth face when the customers, for example, when you talk about detergents and approximate and gamble or Unilever, most of the carbon footprint and the heating, the hot water for the laundry, and this may be 70 percent of the carbon footprint water. So you have to think to think about the entire supply chain from mine, all the stages of supply to the oem who makes it through the distribution to the customer who is using it. And by the way, companies are trying to do something about it. For example, I have some detergent manufacturers are having called wash detergents that you can wash and somewhat underwater that's really cold but lukewarm water and they tried to push it. Consumers are not buying it, unfortunately. It's a tiny part of the market, which is another example of why it is so hard because consumers say they care, but they're not willing to pay more or adjust the processes to be more sustainable.
Speaker 1:Yes. Oh, excellent. Excellent examples. And I think it's, it's, it's, it's worse than a lot of, a lot of times it's, it's, um, um, it's just a reality that we get lost in the details, but indeed, I mean a supply chains are the moving force rice and we, we gotta, we gotta look at the overall ecosystem, not just the piece that we see in front of it. So that's, that's a, that's a good, uh, that's a good point that you highlighted and I know that, uh, you talk a little bit, I think you've spoken about them in the book. There's kind of a flagship, really a brand that is doing good, doing good, doing sustainable. A Patagonia, right. The American clothing company that is selling outdoor clothing and, and, and really market sits clothing is very sustainably sourced, sustainably produced and everything is sustainable. Of course the crisis is a different price point than, uh, than, uh, than other clothing material. So they sell to people that care about the environment, who care about the environment and the company's really committed to sustainability through the supply chain. So tell us maybe a little bit to share with our audience a little bit more about them because you know them really well and then, and I think a lot of people who will want to hear more about it.
Speaker 3:So one set of several companies at the highlighting really committed to sustainability well beyond big companies. Like just as one example, the director of sustainability in Patagonia has the right and it's you. She's using this right to veto companies they think are not sustainable. So for example, in the quarter that I was dealing with them, but the two and a half years ago they were 18 new suppliers that are being gamed quantified. So the first qualified for capacity for prize, for quality after the recording fight for all of those and they were vibrant suppliers, they were audited by the sustainability of a of Patagonia. Out of those 10 were passed. They were fine. Six guts conditional pass, which means there'll be employed, but they got certain time, usually 90 days or 80 days depending on what kind of violation or what kind of thing I didn't like in the in the practices, the time to fix it. And two of them were vetoed. The supply chain, the sustainability pillar said we're not going to use those guys because we don't believe that. We don't trust them that they will actually change. So this is a very strong example of company committed to sustainability. In addition to these, if you go to the Patagonia website, you'll see their entire set of suppliers for every item that they said who the suppliers are or what the processes are. So it's m series, very open system, a friend showing the world that they've got nothing to hide. Of course the governments are costing more and they are sending to people we need to pay more, which means that they probably never be a company the size of a Nike or Rei. I did that. So Unilever or whatever because at this point about 700,$800,000,000 company and it's a good size company, but they'll never be billion multinational because most people are not willing to pay more for product, but there is a segment that, that it is and that's a significant and they're happy to stay besides, and not grow to be a giant. Yes, yes,
Speaker 4:exactly. I'm super. So now, now we have to move on a little bit to a slightly broader area about the future of supply chain and, and, and the top trends that you're seeing. Um, we had a good, a good question actually from a snail which a snake houses in which actually was one of your students. Um, and she was wondering, she was saying she was sharing some of the major customer pinch points are being resolved by the emergence of a, of Omni channel and blockchain. We'll talk about blockchain more in detail later, but she, her question was what would be the best way to gear ourselves for the change that is ongoing and is to come specifically? I would say from a retailer perspective,
Speaker 3:yeah, written is of course are under immense pressure from the ecommerce provider, especially Amazon and Alibaba and jd.com and all the risk because they were the ecommerce retail is don't have any fixed the assets they don't tie to. They don't have to pay for all the acid that they hear, but actually the people who do it best are the people who do it in terms of multi channel or Omni channel. Even Amazon bought it just for the food supermarket. Wholefoods and they seem to be doing very well. They are. Companies are also. The point is as follows, what customers want. They want to get the stuff fast from wherever. And the question is how to get it fast to them because Amazon is conditioning customers to expect everything
Speaker 2:in a few hours. In Boston for example, you order some Amazon product, you get the most productive. It can get two hours. Uh, so other, other, other retailers have to do the same, some retailers are using their, their footprint of a retail location to start serving from retail location, but this also has a problem in front of them or some customers want to get it at home, some customer want to pick it up in the store, some customer wanted to pick it up at work on of this is a huge challenge to uh, to retailers, especially since some of these ecommerce companies are changing so fast and moving so quickly and they're very, very innovative programming gab with new products and new services all the time and just increasing the pressure. So, um, when the question is, you know, um, what's the best way or a, the issues are that it's not easy to change quickly for companies in some of the retail company and we're doing something for good things for a long time. The only company that seemed to be fighting back very strongly is Amazon. They bought the jet.com, which is an online provider. They have their own walmart.com. So they have a strong online presence, but still Amazon is just such an nimble operator move so much faster that they wouldn't see it a between those as ben loves the giants and some other retail providers are trying to survive. The way to survive in a way to survive is being innovative. For example, a warby parker that sends the eyeglasses, they, their stores, but the stores are just, showed, showcases. It just, you go there, your test to give you an itis to get your blood, you know, you'll bring your prescription, you, you, you get your, uh, the glasses that you like. You don't buy it in store. It's two days later, he just sent to you from a warehouse. So it just, just to, uh, something to choose from. That's all. So, so people are trying all the old, kind of a modest, but then Alibaba, jd.com, uh, and uh, and Amazon in particular are the most innovative companies out there. And the pressure keeps going. For example, Amazon with the echo and with the simple ordering and other companies are having tough time catching with them.
Speaker 4:Oh, excellent examples. And I can share, I mean, since I'm spending a lot of time in, in Asia, I'm based in Asia and you may know in, in, uh, in the Alibaba world and in the jd.com, moral in China, they, they did the same. They acquire massive amounts of and pop shop if you know the concept. I mean it's smaller shops at all. Um, and it's, it's incredible the, the, the performance that they are reaching. I mean basically Amazon can do it in two hours in us. They can do it in half an hour to 45 minutes and they can actually even basically at your, at home and you can order a fish and they cut the fish for you and they deliver the fish to your door at your doorstep within 30 to 45 minutes is just incredible. Um, yeah, this is mindblowing. So retail is up their game because, um, yeah, these guys are ready.
Speaker 2:It's very hard to up their game because at this point they have almost insurmountable advantage because those company being Alibaba, jd.com or Amazon have so much data that they and apply ai in relation to this immense data points and get even better by knowing what the, what the customers want even before the customers know what they want so they can, they push this stuff forward location because they know that somebody who just ordered a is going to older, B and c within the next day or two so they can get ready for it because it did the amount of data discovery because of the size is so vast that the new technologies, they can get advantage of new technology in a way that it's a new startup cannot because they don't have the data.
Speaker 4:Um, and just just before, because we will talk a little bit, we'll talk more about the new technologies and all this, this, this, there's an interesting developments, blockchain, ai and all of that. But I wanted to. And a very good question that was asked was what are some of the, you know, what are some of the key challenges in the key issues that are currently happening in companies and in mncs in their supply chain, which maybe are a little bit overstated. I mean, what do we mean by that? I mean sometimes we talk about ai or we talk about blockchain, but in actuality, right, a lot of manufacturing companies or a lot of, even three pls, they struggled with getting accurate data in the first place. Right? So I mean they are not geared up, they're not Amazon, they're not a Alibaba and they're not gear up. They have a lot of legacy systems. So there the problem is a very fundamental problem, you know, how do we get the accurate and clean data? So I'm just wondering, are there some other patterns? Are there some other challenges or struggles that you see? Very fundamental. I mean this is, this is fundamental and basic struggles that you see across supply chain.
Speaker 2:Yeah, of course you're absolutely right. Get in some sense, it's a relatively easy for Amazon to get data because the data that they need to get is mostly demanded that they are selling to consumers that they have. They owned the data, then it's not the manufacturer, so they don't have a big bill of material. They don't have, you know, 10 year supply chain deep into God knows where. So the problem for them, Amazon, Alibaba, ginger, come on guys. It's simpler than for General Motors or Unilever or Nike. Uh, so in that sense it's easier. Better companies struggling with these companies are struggling with political changes. I mean briggsy the Donald Trump, you know, now we have terrorists. We may go into a trade war, not automotive, but for many other companies, the, you know, the US and Mexico is so integrated in terms of other google production that many parts crosses the border four or five, six times before they're put into a car because several different factories are doing different processes on this. This part being engine, just missions or whatever. So now it's nothing. What would happened every time to cross the border, each direction they live, to pay you know, terrorists, it's not clear what's going on. And there's a lot of uncertainty. And by the way, because of this uncertainty, companies are holding investments. Companies are not investing by not building new blood in this case, in this part of the world in Canada or Mexico because they're waiting to see what's going to happen. So there's the, this uncertainty, the long term trend, you know, uh, there, one is getting older. It lives in the, uh, in the developed market, uh, as well as in China. Japan is of course a case in point, but all over the world in, uh, in Europe, even in the United States and Canada spoke relations, getting older presents its own challenge of how to get to the consumer. We talked about the global warming and that's a longer term trend. Who knows what's, what's happening there in many parts of the world, infrastructure is deteriorating and there's no money to fix it. In the United States. These are our challenges that the companies have to deal with. And the main, the main worry is that technology is moving at a breakneck speed. We're going gonna have a scar in three d printing and blockchain and lots of stuff, you know, Internet of things, how to use all this and how to make sure that the company doesn't fall behind and you know, made an excellent point that then for medical, but just getting accurate data is still an issue. Even today we're talking about he did the things but just getting data or what's going on instead of an issue. And then people also forget that in many parts of the world going to Preston's, they still paper based process with lots of companies who go to every person that duplicative process, very inefficient. So hope springs eternal, but companies wild while they're worrying about the no logistics, four point Oh, or industry four point, oh they have to worry about the blocking and tackling. Yes, yes.
Speaker 4:Much more basic and fundamental questions. And also I think a word that is being thrown around, and I mean everybody's talking about it across in the prison. Then of course in supply chain is legend digitization, right? So this is the key topic, rifle, many organizations, um, and a very good question that we got from Navina, he was asking with this supply chain digitalization happening, we'll the supply chain function moved from a back office cost center type of a role to a front office. Revenue Generation.
Speaker 2:Have a role. I think it's actually already happening. It's happening. That'd be in this business for longer than I care to remember, but it used to be that, first of all there were separate function, transportation, warehousing, distribution, procurement in many companies is outcome on their supply chain management and including manufacturing. And in many companies, the chief supply chain, even the title of chief supply chain officer is something that's, you know, became common at least in the United States, in Europe in the last five to 10 years. But the thing that change was made by companies like Walmart, um, the success of warm. If you think about what does, what am I actually logistics company, they don't make anything. They just buy the better movie, the better stories, better distributed, better. So, uh, at the lowest cost and the success of dead. And we filter a postponement model of, Oh, a few years ago, so people started seeing that the supply chain management can bring revenue and can be a competitive advantage. And in, in living companies, supplies to other soups, Gypsy officers are actually have a seat at the table. And by the way, the CEO of apple was the chief supply chain officer, don't cook, was the chief supply chain officer of airport, became the CEO in Walmart. Almost every CEO used to come from the supply chain function. So we see it happening already. I don't think it's tied to a digitization, it's time auto global to globalization and the fact that it becomes, were you by how you sell, how you distribute, where you're manufacturing is becoming a competitive advantage. So supply chain management people are at the decision making table more and more within. Without digitization.
Speaker 4:I mean, I, I want to add another name, which I think she has done a tremendous, uh, actually two names, tremendous role or one is Annette Clayton who, well, she still has the hat of chief supply chain officer that Schneider Electric. And now she's also the CEO of Schneider, America's, and then a peer messages Monday who was the chief supply chain officer of Unilever. Now he's, uh, he's running a big chunk of the world in Asia, so I'm definitely that a shift from a chief supply chain officer of becoming the CEO of a business is happening more and more because they're recognizing the strategic importance of the functions. Um, and then, uh, we got a very good question from Lynch Ai. Well, I mean, I think, uh, and I read, I mean, I, I think it's one of the fastest books that I've read. I need to pass you a compliment professor. The power of resilience, which is a, which is your book. I read it in a day. It's a fantastic book. I mean, it's such a practical, uh, a book that is very easy to read and it's very fascinating and informative of course. And so lynch. Yeah. And I think a lot of people that are ready to Lynch eyes asking guys, it's been two years since the power of resilience was published. Um, so she's wondering how has the type of supply chain risks that threatened larger organizations shifted? Uh, are there some new developments because now we have more Iot, we have more Internet of things, we have more artificial intelligence. Are there, um, more, uh, different technologies used by companies to mitigate this type of risks?
Speaker 2:She had some examples. Yes, yes, yes. Some of the big changes. I do my touring off learned technologies. So, uh, there are several, several providers come to mind resonant because it was founded by a former student of ours, but then these are companies that they look at, they do the following, take data from events around the world. They fire somewhere, exited somewhere, whatever. Then they met this, the location of a company, facilities, whether it's a bit cleanser, warehouses and the facilities of their suppliers and the title of the bill of material. And they say, okay, this supplier is make art abc that go to customers x, y, z. and then they say, okay, the, the, um, a risk. If something happens to this plant, then this customer and this customer will give a from who we get that much money is at risk. So what happened is when there's a lesson somewhere, they can immediately say, okay, we have this front are, we're not going to have them for two weeks, three weeks is, so these are the customers that are at risk and these are the value that is a trick. So they can actually rent the, the, uh, the customer decide which customer we should pay attention to, which customer we should focus on, which customers we should find immediately replacement for in which customers can wait a little bit. So this ability to manage when something happens is somebody is growing and many, many companies are using this type of software or they have several competitors. Um, so this is very, this is the big advancement in the last few years. I talk about the power of resilience. I just mentioned it, that dead time when that book came out, these are relatively new and just emerging technology. They're are now becoming really, really mature and being used all over the place. In addition to this, companies are becoming more aware of for a fridge, so for example, we talked before about the about sustainability. More and more companies are partnering with an NGO in order to educate each other, so for example in word, but partner with environmental defense fund and the ETF has six people in Bentonville in Florida, just to make them understand that they can change on a dime. So for example, the EDF people now understand that the can change suppliers only during contract time, so don't bug them down the middle for content. I can't do anything about it, but two or three months before a contract, a contract is up. You might want to talk to them anyway what we may want them to understand that there may be some alternative suppliers, whatever. So companies are getting more and more tied in this truck. Try using ngos like they used to have like they did with the media. Most big companies, PR and media people who used to deal with the media, worry about what the company looks like in the media. Many companies have just as big department dealing with[inaudible], so this is in terms of sustainability and as general corporate social responsibility or risk. Then of course companies are, uh, you know, lobbying government in order to avoid political risks. So, right now in the United States, as you know, the trump administration is all up in the air about what will happen with Nafta. So companies are trying to work with the government to make sure that the, uh, the US doesn't get out of NAFTA, our, if it does get out of Nafta agreement. So companies are much more working with the gun, had been closely. And the big change is that technology companies are doing companies like Google and facebook didn't used to do with the government at all, but in the last five, 10 years to realize that regulation and government intervention can be a big risk to these assembles the exempt companies are getting more at two new is possible. Yes, yes.
Speaker 4:Thank you for that. And there is a, there is a question coming back to the resilience is, and it's a very big picture question I have. It's from Roxanne. Um, uh, and actually works on is leading a major, major supply chain organization here in Asia Pacific and she was wondering how they actually evaluate how much resilience you need in an organization and is a very big question.
Speaker 2:Um, but, uh, yeah, I guess it's more a matter of men, um,
Speaker 4:and I know her company very well and it's a very established company and they're doing well. But I guess her point is, you know, what would be from a layman terms, what would be some of the key indicators that we look at the kind of determined that the level of resilience need.
Speaker 2:That's the, uh, that's a tough question because I don't have a one size fits all. Answer the question asked is, number one, how do we value it? How much insurance you buy when you buy insurance? My Insurance Company would love to sell you more insurance products. You don't, you somehow get the, an estimate or a, some idea of what do you want to, uh, to insure against. In the same way you should think about what do you, what are you most afraid of it? What do you want to insure against and how much it's gonna cost you to ensure the problem with insurance as abuse or resilience is the cost of preparation are really and are now, while in the best afford awards, you're not going to use it. Nothing will happen and you're never going to use it. So it's a tough. It's a tough decisions. What I, what I would generally argue is that you may want to replace some insurance with resilience, with being more flexible, being more agile, being able to respond faster, having um, multiple suppliers because insurance by its very nature is an address serial process. If something happened, now you have to sue the insurance company for them to pay. They don't want to pay. It's resilience is a company in a capabilities. I mean, you have it and you'll have it in case, uh, not only in case something bad happened, but it, something good happens if demand goes up significantly for, for a new product that you didn't anticipate. Being Agile and being flexible really helps you provide the market with a product even though you did not anticipate it. So it's very hard to say, um, you know, how much, how much resilience you need that there are many, of course, festus, so resilience. But I would say think about insurance, how much insurance you need and how much resilience, how much insurance you can replace, replace with more resilience.
Speaker 4:No. Excellent. Another joan is really very good analogy. I'll use it from, from now on. Thank you for that. It's, it's really a brilliant. The point and it's A. Yeah, it makes it make, it, makes it simple to, to think about it. And of course, different companies will have different risks, right? Then we'll have different. I mean, it cannot be one size fits all. It's just like with humans as well. I mean the, depending on your, on your, uh, on your circumstances. But um, yeah, thank you for that great analogy. And I need to, I need to speak a little bit. And we have a professor at Geo, Rajiv basically runs a supply chain, um, Mba here in Singapore for one of the business schools. And he had a question regarding your book logistic clusters where you basically applauded. Singapore is one of the most successful logistics pluses in the world. Um, obviously you may know there's a, there's a huge drive in Singapore for a smart city, for digitalization, for smart nation, for systems, for intelligence solutions. Um, so a government, the government is doing a lot about transforming Singapore through technology, um, and digital innovation. So in your perspective, would this, uh, of course the normal normally that this will help Singapore, but how would this ad, let's say to Singapore status is one of the global leaders in the logistics space.
Speaker 2:Most of the, most of the digital move right now in Singapore, the, the smart city drive and others, smart nation drive our head are dealing with consumers and consumers and drivers and dealing with a population dealing with the government through technology. This just makes life in Singapore more pleasant. Um, the, the part itself is already a lead important terms of technology. It's already almost everything that could be done with technology is done with technology. And I don't think this particular will have. Singapore is already ahead of many other ports in the world. Let me put it this way. 80 five percent of the goods come into Singapore airport, never interesting report. They just shipped and goes, go elsewhere. So it is already done with a lot of digital health. So I, I'm not sure that making can, you know, the smart nation drive or this smart city drive. I'm gonna make a big difference, a difference there if at all it will be easier to get in and out of warehouses. But most of those are close to the port anyway. So it's not something that will have big effects, uh, in the city. In fact, a lot of places I've been to Panama, I worked with a Panamanian, I worked with Columbia and many other poets. They're looking up to Singapore in Rotterdam I would say Singapore. Rotterdam are the two leading ports in the world and in terms of digitization and. But Singapore is still the number one in terms of everything that's the Senate. This is just part of it.
Speaker 4:And now the, the, the, the question that a lot of. I mean I think I've had at least 10 or 20 people asking this question, so we need to talk about it. I say, what's the impact of blockchain for supply chain and transportation? I think it's on everybody's lips. Everybody talks about it. Probably this, this let's do terms, right? This book.
Speaker 2:And there's the artificial intelligence that come up again and again and again, these are two different things. So let's first talk about blockchain. A ctl actually come to the surprise. We don't think they'll be the impact that people are talking about. It will change everything. We just don't see it at this point. And the technology will have to be much better before it can be used. The problem is each for you can use it in a company can use it, and by the way, whatever blockchain does, which is distributed databases and making sure that the transactional records cannot be changed. If you change your ticket, you have to create another record, the church, the chain. So you have um, clear paths to audit everything. Okay? And it's hard to change by the way because all the on the participants in the network have to agree to something in order to make sure that it's a valid. Um, if I didn't transaction, let me in order to give you the, the, the, to show you why we think it's a silly aside from one company is for, for example, I know some schools, mit now I don't know if it's more just to do it, puts the, our, our transcript on a blockchain and we give the key to every student so they can, they can be, but thinking about do, we can also just give them a password to some database at mit and they can show everybody there their grades. I always do it the blockchain because it's kind of cool, but we don't see an easy to do. When people talk about the real promise of blockchain, they're talking about being able to move throughout the supply chain, which is really a supply network of many, many suppliers are so many industries to move it, to move a transaction and being able to trust it. So first of all, we need to grit industry standards and creating industry standards is a thankless task that may or may not work, but in order to show you why we see why we're not totally excited about it, think about, you know, American Express or visa or mastercard. You are, you don't have. When I did it, when I buy something for Alibaba or some, some, somebody that somebody will send something on Alibaba or anybody on the Internet. I buy from somebody that I don't know. I don't have to trust nothing. I don't have to deal with it. Why? Because mastercard is in the middle. Mastercard dealing with the banks. Must've got a deal with mastercard, deal with a merchant and domestic or providing me is the fact that if something goes wrong, I don't have to get it to us for my money back from the merchant to find who he is and all this mastercard would do it for me, mastercard, American Express you that they'll do it for me. Daddy, go and talk to the merchants that now I'm thinking about, okay, let's replace this as people are talking about with. Let's take the intermediate intermediary out of this and replace it with a machine basically that, uh, yes, if you were to record that transaction, but the problem is that the what, what do we do if there's a, if the digital transaction and the physical item or not the same. Somebody said, I'll send you three items a and descend your two, b and one c. What do you do? Who are you quoting now? You cannot call mastercard. There's no mastercard you call a computer or what do you do? So in some sense it's the opposite of what people think. You need more trust rather than less stressed. So it's, it's not as simple as people take the cases. Simple cases when you can go for it to give you a case that could be used if governments were to decide if the port of Singapore would have decided that the Deq and pulled the bill of lading on the summary puts, puts the bill of lading on the blockchain and throws to the airport and it comes out and they can, uh, they can trust it. But the question is, the guy who started the process, the guy did the pig farm in China who puts two pigs instead of three and recorded three and nobody knew about it and always the cost to the system is three and only when it gets to Singapore and they opened the container. This is only to. What do they do now? Okay. I'd say all of these are questions that are not so busy and people can be between two parties. It's it, it's not a problem. But this process is a discipline slow. The distributed process that every computer has to. If there's a network, even if everybody agreed, every computer has to update itself in the replication process or other process. So it's a time consuming. It takes a lot of computer resources. We're not certain about it for supplies, for supply chain, at least way when we see clearly why, you know, cryptocurrency works kind of. But then in terms of supply chain, I think we're pretty far from a, as they said, change everything to us. It looks more like a, these people are old enough. I'm not old enough to recall the rfid, you know, movement when everybody was telling you about rfid, it's going to change everything. They is going to change supply and I got to be better. Even companies like big companies signed on is Walmart and procter and gamble and many others and and then we found that yeah, he tells some issues is, but it's not used all over the place. It's just some new issues as in some cases, but that's about it. We think that blockchain is in the same category. I have some issues as two companies very. When you have a, you know, diamonds are very expensive products and distributed by Debbie or who's know the biggest in the market yet they can, they can use it in order to tie the. Everything goes to one place. So when the beer ties the a digital record to the extra item, okay, they're responsible for it and from that point they moved together. But in many cases there's no single point that doesn't do so you need standards and everybody has. Everybody has depressed. So I went out your salary for, sorry for not being the runner, right. But it's how we feel at this here about it now and look at NSF.
Speaker 4:Very, very interesting perspective. And thank you for sharing your, your open thoughts because, uh, I mean, I, I'm personally, I go to a lot of conferences and I mean if you, if you opened the media, if you opened the Linkedin, if you open. So I mean facebook, I mean sometimes even facebook, there's so much dogs and every, almost every article has in a blockchain blockchain that uh, you, you raise a very interesting and valid point that probably have an impact, but we are far away, well, relatively far away from it and in again, in the practicality and it kind of links back to the, to the supply chain and sustainability side, isn't it? Right. I mean, in practicality and reality. I mean, do we really, I mean, I know actually there's some steps and we're going to have a very interesting podcast with IBM. There's going to talk specifically about the different blockchain implementations that they have already done. I'm looking really forward to that, but again there's this far and few between. I mean there's not so many yet
Speaker 2:when you talked to IBM, press them on when he said they're done. I've listened to IBM monitored and to ask them with what is done and what is done in terms of a test, what is done in production and what is done in tests and why many of the tests are not going to production. So because there lot a lot. A lot of their examples are people who are testing Sam on a smaller scale rather than production. Anyway, I will,
Speaker 4:I will, I will do the final final question on this segment and then we move on to the, to the, to the last question. So I'm Brita. I had the, had the, you know, and he was, she was talking a little bit about, you know, you mentioned Walmart. A lot of global retail companies are trying to build their own supply chain logistics net network. On the other side of you have Alibaba and Amazon and jet.com really investing hard in buying their own fleets and trucks and planes and ships and so on. How do you see this impacting the business model of three? Pls Do. Will they take them out? Will they badly impact them? Will they coexist? How will it
Speaker 2:look? I think, I think they'll coexist. I don't think there are still lots and lots of small companies and many more so all the time that they cannot function without third party logistics. What will happen is by doing it, many other companies like, you know, automotive companies or large companies or Unilever or procter and gamble or Intel or whatever. They're not getting into this. It's only the ecommerce giants are getting into this and surely I'm providers like ups and Fedex may lose some business because they may lose some of the business that Amazon does on its own with the supply chain and through the last mile distribution. They do a lot of, a lot of their own. But uh, so, but three bills still have fast number of companies who will need their services. So I don't see it the big risk for the, uh, for the three pl, I just don't see what will happen is as these things grow as a, you know, the logistics, the logistics and ability of Alibaba or jd or Amazon grow, they may start offering it to other company, may start competing with the three par. So this is just another competitor in the marketplace. I don't see why they'd be particularly better than ups or Fedex. Maybe they will be, but the technology of trucking and warehousing is there. More and more people are using robotics in warehouses. Not only these guys, there are companies who provide this now, so I think there'll be some competitors, but they're always competition. So I, I don't see it as a fundamental shift. Yes.
Speaker 4:I think that that's reassuring for a lot of the three pls
Speaker 2:is listening to us
Speaker 4:because there's a lot of gloom and doom type of scenario.
Speaker 2:Nah, Nah, Nah, Nah, just another competitor. Hey, just beat the. Yeah.
Speaker 4:Excellent. So moving onto the segment, I mean, we do executive search, we place, we place a and, and recruit people for multinationals. And we talk a lot, a lot about, I'm a chief supply chain officers. What do they need to have? What type of skill sets, what type of mindset do they need to have? We live in the age of digitalization, machine learning, ai, robotics in your views. Uh, what's, what's some of the key attributes that you see future and now I'm chief supply chain officer needing to have in order to be successful.
Speaker 2:It's not as much different thing than before, but in different ways. And they have to be, first of all, good managers, good people, good people you know, understand people understand how to motivate people are the standard. What do you might go to standard excellent managers. They need to understand the new technology. Don't to, don't, I don't think people should be computer scientists in order to run a three pl or something. They should just understand what can offer this can be done. The beauty of it can be done with online courses from everywhere. Just understand the technology, what it can offer, what it cannot offer. So you can not be snowed by your it people in or by a consultant that, uh, this competition you to understand what a ai ease and is not what blockchain is and is not, or three d printing can and cannot do and in what timeframe, when autonomous vehicles may become an issue, but just just big able to watch it or having people around you who can watch it. Um, but I, I, I don't think that people should become technocrats understand only a come from computer science in order to be able to shift supply to be able to be successful chief supply chain officer because it is still a people and process and management business more than anything more than just the technology is one aspect of it and it's changing for sure. But the, everything is changing. People's expectations are changing policies or changing regulations are changing. So what that is no.
Speaker 4:Correct. And, and, and looking at the other scale of the spectrum, right? So on the one side, and you'll see the top of the pyramid that just an officer on the other side, obviously you're a professor, you're very closely linkedin training the future bright minds in the, in the, in the supply chain field would be interesting to know which are the most relevant skills companies that you see are, are looking for in fresh graduates. Right? So, and maybe if there's a difference like in Asia versus Europe versus a us,
Speaker 2:I don't think that covered most of the people who hire here are multinationals and they'll hire somebody here to work in Asia to work in Europe to work in South America. So it, I'm not sure that I can companies, uh, that much difference, but what, what, uh, and, and I must also qualify. We're dealing with large companies. People recruited mit, a large companies, uh, Amazon in April and you know, production, gamble and Unilever and entail and ups and Fedex, people who, uh, who recruited. They are looking for technology knowhow. They're looking to being able to analyze data, very important. So, um, of course, understand logistics and supply chain. They're are also looking for the soft skills, shouldn't be able to, uh, give a talk, should be able to work in a team, should own the soft skills that we talked about a still very important and people still looking at this, but the third requirement just grow. Uh, there's also another thing that we also therapy because we can't teach everything, of course during somebodies master to the said to spend a year with us for a master so we can teach everything. We tell them that one of the most important thing is lifelong learning for this young, younger record. Make sure that you and in fact, within our students, go only to companies who promised that they allow you to continuously learn and go to courses and, and grow. So this is our, our message boards to companies and to our students that then there were changes and are we the most. Mostly what we are trying to give them is the ability to learn that being open and being able to learn whether it's a, how to negotiate or what's inside the blockchain, whatever.
Speaker 1:Okay. So basically, um, a question that was, um, that was, uh, around the skills, especially for the young generation, right? So basically in terms of the people that are graduating from mit, uh, what do you see professor is the most relevant skills companies are looking in fresh graduates and, and maybe if you can tell us a little bit a US versus Europe versus Asia. Okay.
Speaker 3:As you know, most of the people who, uh, most of the companies who are recruited, mit or large multinational companies recruit for all over the world and I don't think it's very different in terms of what they're looking for. They're looking for defined is all of the above. They're looking for technical progress. They're looking for, of course, understanding logistics, supply chain management where it's inventory planning, network design, the procurement, distribution, manufacturing, what have you. They are looking for being able to have the soft skills, being able to work in a team, being able to explain what they're talking about, being able to write. So some communication kids and mostly will be attending them. They both have granted to the companies who are recruiting here that the most important thing is lifelong learning, which is now cheap and easy to do because of moocs, because of online learning courses for free or for very low cost around the world, uh, not to mit and lots of other places are offering courses and one can because the world is changing. There wasn't changing because technology and changing policies or changing processes, changing competition is changing. So lifelong learner and being able to understand no phenomenon, how to get into a new area is the most important characteristics of companies when they recruit. And we told them, we tell our students that's what they should be looking for when they are looking at the company decided which company to work for
Speaker 1:and how do you see, I mean in, in, in, and, and, and with, with the, I mean in reality, uh, education now. So we're preparing people for and they are, we teaching them skills and mindsets in school. But then by the end of the, even sometimes by the end of the education process, technology would have, would have changed then and there is a certain gap, uh, one of, one of, one of our listeners, John Hancock, was wondering, there is a challenge today in closing that gap between what's needed now and what the education system is producing and was going to be needed in a few years. What's your, what's your future vision of a supply chain? Logistics Education?
Speaker 3:The most important thing is continuing lifelong lifelong learning, continuing to take online courses, come to executive courses, being able to renew and self all the time. Otherwise one becomes redundant really to become irrelevant to the company. And that's usually the end of careers. So being able to being quarter with fresh on the technology, on processes, on what the competition is, doing, everything, going to conferences, taking courses. Very important on the time. It's the only, the only way to keep on top of the changing world.
Speaker 1:Yes. But if I can just do a little bit with. We're not an example because I know that mit is, sits on, on. I mean, basically everybody's regardless you as the pinnacle of Education of system engineering schools, how do you do it at mit in terms of maybe some examples of keeping yourself from a teaching students and methods and practicalities in case studies. How do you continuously evolve this to make sure that you're giving them the best? Um, uh, let's say, um, ways in which they can learn.
Speaker 3:First of all, MIT's research institute, first and foremost, it's actually nothing to do occasionally institute a research institute that is tag to it. So in that sense we always have the current research which is usually a leading, a leading ideas and this very much flows back to the classroom. Another thing that we have is at the center for Transportation Logistics and other parts of Mit, but in our case we have 55 companies or partners with us. We do a lot of activities with them. Our students are supposed to do the thesis with them, with their work on their master's thesis or to always read problems. It keeps people grounded in what's happening in industry. And at the same time they understand what's happening in the research world, which is let's say three, five years, 10 years ahead, what's, what may be coming. So this combination comes, gives them an idea of what's actually happening on the ground and what may be happening a few years down the road.
Speaker 1:Yes. Super final question. Going back to, to the massive open online course or Mooc as, as we call them. And also I need to, I need to, I need to share this because uh, when the question was from NASA and he was actually saying that we'll universities and we'll, we'll leave an mit go completely digital or will it coexist with on campus education with all this open online courses you think they will take over completely? Or will it be kind of a hybrid model? Where do you see the future
Speaker 3:going? Okay. I can give you my own view. Of course, not the mit view. So I think depending what you're looking at, I think the undergraduate education is not only acquiring knowledge, but it's growing up. It's living home growing up. So depending in areas. For example, in countries that have a meaningful research services that people must go to military service, it's less important because people grew up in the military, they, you know, mature there, they spend three, four or five years in the military and then they go to school, uh, so they don't have to go to school in the same way that people 18 years old leave home and go to school to spend four years and kind of mature. So in, in the, uh, say American system where there, there's no required service, but people go to college, one can probably shorten it to two, three or four years after two years from now for four years because same if you think about kind of Kudos, physics, uh, lots of chemistry, lots of deceptions don't change very quickly. So there's no reason not to teach them online and then ditch more advanced courses when they're more tied to a current trend. That ongoing research bring people for the last three or two, two or three years of undergraduate. I think that master and professional education professional education is. I defined it as a usually master level courses live in programs my celebrity degrees for to grow to industry that people who want to do research, people don't want to go to industry for them. I think it will go through totally online and then uh, the online is becoming better and better and there are even some indication that people learn better online. So I think while we still believe at mit in a blended mode, you know, take all our five courses where we called a micromasters all, all five courses to exit exam, the final exam, they can apply to mit and several other universities and getting my stayed one semester because in the ones who missed the residential part, we do case studies that are bitter doing in person online because the technology is not the perfected yet. We do some teamwork, we do other things that are easier to do online. But longterm I think that professional education, massive level indication you go to a totally online in terms of phd level. Again, it's a different model because it's more of an apprenticeship model. You'll have one, two, three students as a professor who worked with you and it takes three to five years to work and this apprenticeship model, people can, their people to benefit a lot, the students from residential or at least partly residential over that continuous combination of residential and work. Uh, so I think the residential will not go away on the phd level and on large part of the undergraduate level. So this is probably a more detailed answer that you were looking for, but that's what she likes.
Speaker 1:No, I appreciate it. Appreciate it. I know of course it may not be a popular answer with some of your colleagues. Even. Definitely. Maybe some of the community. Yeah,
Speaker 3:it is not, it is not effective. I know that it's not so it's not like you assuming but most colleagues at mit and that sort of are not signing up for this idea but they're not full funds to do so I think it's would grow up.
Speaker 1:Yes. And I mean definitely also a very big shout out to our, to our audience because they should go online and then go on the mit website and check out the different, the different open online courses that you have because it's very interesting. You also have a podcast for the, for the mit yourselves and it's, it's extremely valuable and a great source of inspiration and a, and I think most the most importantly and based on the conversation that we've had today, I want to urge your listeners to, uh, to go and check out your latest book, um, and, and, and buy it and read it because I think it's a very good, um, it's a very good read through as well as comprehensive, a comprehensive summary of all that is happening in the sustainability field. Um, professor chefy, thank you so much for your time.
Speaker 4:Thank you for, for sharing all the insights with us. And it's been a pleasure to have you with us today. Thank you very much. We'll do. I enjoy doing it. Thank you for listening to a podcast. If you liked what you heard, be sure to follow us on rudder Palamara your.com/podcast. For all the show notes, links, and extra tips covered in the interview, make sure also to subscribe to are you email list to get the news in the nick of time. If you're listening through a platform, itunes or stitcher, and you like what we do, please kindly review and give us five stars so we can keep the energy flowing and get more people to find out about our podcast. I'm most active on Linkedin, so do feel free to follow me to stay tuned for our latest articles as well as future guests for the podcast, and if you have any suggestions or any other idea, please feel free to write to me. I respond to all and also please make sure not to miss our next episode where we will be having a few other c level and top leaders in supply chain joining us. Stay tuned.