Commissioner Dye Statement on Innovation Teams Launch

Statement of Commissioner Dye
Federal Maritime Commission Innovation Teams Launch

Thank You to Supporters

Thank you all for coming here today to formally launch the Commission’s Innovation Teams initiative.
We wanted to hold the first meeting of our teams here in Washington, so we could publicly thank all of you who have played and will continue to play a part as we move forward in this effort.

We have experienced, highly knowledgeable, successful industry leaders, representing 9 key supply chain industries here today: ocean carriers, U.S. ports, marine terminal operators, chassis providers, longshore labor, trucking railroads, intermediaries, and shippers. We expect to form an additional team focusing on the U.S. export supply chain.

Thank you all for your willingness to commit yourselves to this undertaking. A number of distinguished academic and business advisors have already been extremely helpful to us as we refined our thinking about the best way to attack supply chain challenges.

Special thanks to Johns Hopkins Applied Physics Laboratory: Dr. Dean Egli and his colleagues; University of Denver, Transportation Institute; MIT’s Center for Transportation and Logistics Center for Global Supply Chain Management; the New York Shipping Exchange; and Strategic Mobility 21. Thank you to our many trade association supporters, who actively helped identify team members from among their membership. Thank you to Capitol Hill staff who also have expressed interest in and support of our initiative.

Finally, thanks to my fellow Commissioners, whose support and advice I appreciate as we continue to work together.

Background Concept

Today we’ll divide our innovation leaders into 3 teams that include representatives from each of the major supply chain industries. In general, studies suggest that effective teams are composed of from 5 to 12 individuals. Our teams are each within that range. We are encouraging our team members to step out of their enterprise silos, and focus on the global supply chain from a systemic perspective. Dr. Dean Egli and my friend, Larry Mallon, have contributed several interesting pieces for you to use in this respect.

Our teams will be meeting simultaneously, but the Commission will encourage cross-fertilization of ideas among the teams, by sharing interesting perspectives or ideas from one team with the others. We considered several options before arriving at our “innovation teams” approach.

We heard from industry groups that many business leaders were anxious to “roll up their sleeves” and actively engage “across the table” to address end-to-end global supply chain issues together. And, of course, since this initiative is directed toward commercial solutions rather than improved governmental programs, we decided against an Advisory Board.

Our initiative focuses on two concepts: team work and innovation. Team work among committed, experienced supply chain actors who are motivated to “keep at it” offer the best chance for successful outcomes. We take this one step further to encourage meaningful process innovation, because we believe that a new systems-wide perspective will allow our teams to propose and implement actionable operational change

Much of the research on the global supply chain system has been undertaken in the homeland security arena. Drawing on that research, we want to consider aligning supply chain processes among all key actors, focusing on improved reliability, visibility, and resilience.

Of course, team member experience with bigger ships, carrier alliances, trucking, chassis, and terminal challenges will inform their proposals. These supply chain effectiveness proposals include how to align business processes, eliminate bottlenecks, support timely delivery of increased cargo volumes, and improve the smooth operation of the overall system.

Federal Maritime Commission as Catalyst

Among Federal agencies, the FMC’s broad programmatic responsibilities make us uniquely qualified to engage in this initiative. The Commission’s organic statutory responsibilities give us authority over ocean carriers, ports, marine terminals, and ocean transportation intermediaries.

Enforcement of the competition regime of the Shipping Act of 1984 gives us an appreciation of the commercial needs of American exporters and importers. Trucking interests were the first to encourage the Commission to help address seaport congestion. Since then, other affected parties have pressed us to become actively involved.

The Commission held regional hearings on port congestion and supply chain efficiency in 2014. We issued a Report summarizing the findings from those hearings in June of last year. These preliminary steps prepared the way for our Supply Chain Innovation Teams initiative. By hosting and supporting our Innovation Teams, the Commission intends to act as a catalyst, to “speed up” supply chain process change.

Complement and Accelerate Existing Efforts

We recognize the important ongoing efforts in our ports around the country, and we do not intend to compete with or interfere with those initiatives. Our work is intended to complement and accelerate existing efforts. Effective operational supply chain processes are in everyone’s best interest.

We believe that serious engagement by knowledgeable industry leaders offers the best chance to develop and implement improved processes. So we are not offering an “FMC Solution.”  We’re creating an opportunity for key supply chain actors to exchange information and ideas, and to debate creative proposals in a context conducive to free and robust engagement.

Because we are skeptical that one-size-fits-all solutions are possible in the face of today’s international supply chain challenges, we encourage all promising private-sector initiatives to continue.

Actionable Process Innovations

Our teams are not being asked to help draft policy papers or offer general industry suggestions devoid of specific implementation recommendations. The goal of our teams is to produce and help implement actionable supply chain process improvements. As they make progress, we’ll report that at Commission meetings and on the agency’s website.

In his book on the digital revolution, The Innovators, Walter Issacson concludes that the contributions to innovation of isolated individuals is overrated. He observed that real innovation springs from creative interaction among committed individuals.  Most often, that takes the form of incremental advances over time.

A 2014 study from the MIT Center for Transportation and Logistics concludes that most innovation in supply chain management builds on existing achievements and reconfigures known methods and technologies.

This is what we hope and expect this initiative will produce. That’s a tall order. But there are a lot of very knowledgeable and experienced leaders in this room. And I am confident that you’ll rise to the challenge.

So let’s get started.

Thank you.