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Logistics, AI, and the Future of Work: An Interview with MIT’s Yossi Sheffi

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Yossi Sheffi, Ph.D., is the Elisha Gray II professor of engineering systems at the Massachusetts Institute of Technology where he serves as director of the MIT Center for Transportation. He is an expert in systems optimization, risk and resilience, and supply chain management, and the author of eight management books, including The Magic Conveyor Belt: Supply Chains, AI, and The Future of Work, which was published in April. In advance of his keynote address for the Vision Spectra Conference, editor-in-chief Michael Wheeler sat down with Sheffi for an exclusive interview.

In The Magic Conveyor Belt: Supply Chains, AI, and the Future of Work, you explain what supply chains are, how they operate, and how the integration of advanced technology with people and processes will be the hallmark of future supply chain management. What role do you see AI playing in supply chain management today? How will that evolve in the future?

As we delve into the role of AI in supply chain management, it’s important to recognize that AI is already playing a significant role in the industry. In fact, many supply chain managers are already utilizing AI-powered tools to improve their operations. As warehouses are introducing robotics at a breakneck rate, these robots are using AI to navigate and perform their tasks. Autonomous trucks are behind the corner and are infused with AI. Companies use machine learning to improve forecasting and large language models to collect data that can help divert attention to suppliers at risk.

In broad strokes, what impact will AI and robotics have on supply chain operations in the next few years?

As AI keeps developing, the machinery that uses AI will be able to automate the tasks it performs better and faster. Tasks such as predictive maintenance, visual inspection of assets and products for damage detection, better and better forecasting, autonomous trucking and platooning, and management of warehouse and delivery drones are likely to become commonplace. In addition, the ability to create recommendations for reconfiguring supply networks as conditions change, the ability to recommend contract terms and create smart contracts, and many other applications.

One of the main benefits is likely to be the ability of supply chain managers to obtain analysis of huge data sets created by the composition of diverse data sets including text, picture, videos, and speech. As the software becomes better and better, such analysis, with action recommendations, may be provided to decision makers in almost real time. While forecasting will always involve inaccuracies, such capabilities will allow managers to respond faster and more accurately to changing conditions.

Yossi Sheffi is a frequent speaker at conferences and events around the globe. Recent appearances include The European Transportation and Logistics Conference, The Hague, Netherlands, MIT Media Lab, TransformFest, Prague, Czech Republic, and numerous roundtables and network television interviews. Courtesy of MIT.

 
  Yossi Sheffi is a frequent speaker at conferences and events around the globe. Recent appearances include The European Transportation and Logistics Conference, The Hague, Netherlands, MIT Media Lab, TransformFest, Prague, Czech Republic, and numerous roundtables and network television interviews. Courtesy of MIT.

You write about “the March of the Machines” and the “Robot Apocalypse” in The Magic Conveyor Belt. How valid are the fears of job-stealing tech? Are there specific roles that are likely to be supplanted by technology?

The book acknowledges the fear and does give examples of jobs that disappeared as a result of technological innovation (elevator operators, airline navigators, telephone exchange operators, etc.). However, the book chronicles the fact that with each industrial revolution, some jobs changed, but in the aggregate, many more jobs were created than lost. These jobs include machine-augmented tasks performing similar jobs to the previous ones, only better and faster, and many more jobs in new industries that created more and many new types of jobs.


Jobs that are likely to be supplanted by technology include routine tasks that can be programmed with versatility. We already see cashiers’ jobs, retail clerks, data entry being slowly augmented by automation. With generative AI, many white-collar jobs may be changed as ChatGPT and other such tools help create computer code, media advertisements, legal case search, financial analysis, graphic design, customer service, and other similar jobs. I do not see these jobs disappearing but rather changing as AI allows for higher productivity in these tasks, taking the parts of these jobs that are routine and formulaic while allowing workers to focus on higher level tasks that require creativity, adjustments, judgement, etc.

The pandemic highlighted the role of supply chains throughout the world. What lessons did we learn?

The pandemic taught companies that they can do things that they never imagined they could do. These include responding to unprecedented changes in demand, such as food or medical supplies; the ability to adjust products on the fly based on ingredient availability; the capacity to collaborate with others, including competitors; the ability to acquire and implement technology very fast, etc.

The main lesson, which has been discussed in the media and political circles, includes building resilient supply chains. This comprises diversifying the supply base, reshoring, and friend-shoring, as well as building in flexibility and agility for supply chains to be able to respond to disruptions and keep operating. Much of the latter objective includes the purchasing of visibility and analysis systems.

 The Magic Conveyor Belt: Supply Chains, AI, and The Future of Work is now available on Amazon, after its release this April. In it, Sheffi explains what supply chains are, how they operate, and how the integration of advanced technology with people and processes will be the hallmark of future supply chain management. Courtesy of MIT.
 The Magic Conveyor Belt: Supply Chains, AI, and The Future of Work is now available on Amazon, after its release this April. In it, Sheffi explains what supply chains are, how they operate, and how the integration of advanced technology with people and processes will be the hallmark of future supply chain management. Courtesy of MIT.
 The Magic Conveyor Belt: Supply Chains, AI, and The Future of Work is now available on Amazon, after its release this April. In it, Sheffi explains what supply chains are, how they operate, and how the integration of advanced technology with people and processes will be the hallmark of future supply chain management. Courtesy of MIT.

 
  The Magic Conveyor Belt: Supply Chains, AI, and The Future of Work is now available on Amazon, after its release this April. In it, Sheffi explains what supply chains are, how they operate, and how the integration of advanced technology with people and processes will be the hallmark of future supply chain management. Courtesy of MIT.

Could you identify future trends worth noting that will have the most impact on world supply chains and economies?

Two continuing trends include (i) the reconfiguration of supply chains in response to lessons of the pandemic and, more importantly, geopolitical considerations, and (ii) the continued pressure to decarbonize supply chains, as well as the continued and increasing emphasis on social justice in supply chains. At the same time, the drive to increase revenues and cut costs will only increase as the world is stepping into a possible recession in late summer 2023.

Published: June 2023
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