Romanian Distribution Committee Magazine, Volume 9, Issue 4, Year 2018

DRI VI NGART I F I CI ALI NT E L L I GE NCE T OL EVE RAGERE F I NE DKNOWL E DGE F ORT HEWORL DS US T AI NABL EDEVE L OPME NT

VOL UME9 I S S UE4 2018

Editorial: Innovation, Work Culture, Internet platforms, AI and the Pressing Threats to Globally and Domestically Economic Growth

At the end of October this year we read in the Science magazine (Science/AAAS American Association for the Advancement of Science; the world’s leading journal of original scientific research, global news, and commentary) an article entitled “Top employers embrace change based on a stable foundation” (with regard to the annual Science Careers Top Employers Survey, where most respondents were industry employees from North America, Europe, and the Asia/Pacific Rim and working in a biotech, biopharma, or pharmaceutical company), in which the author underlined among other aspects that: beyond the usual highly valued features (such as: innovation, work culture aligned with employee values, respect for employees, social responsibility valued and expected by employees at their workplace), this year’s survey revealed an unusual feature – employer who “makes changes needed”; different comments from respondents covered also diverse aspects including prominent political news and market trends. (Tachibana, 2018) While this month, December 2018, the Economic Conditions Snapshot reflecting McKinsey Global Survey results highlighted (among other aspects) the same usual characteristic that the most pressing threats to globally and domestically economic growth remain risks related to policy and politics (the most commonly cited risk to global economic growth being considered the changes in trade policy, the geopolitical instability being the second, and the third being the United Kingdom’s exit from the European Union). We also noticed that: the most commonly cited threat to

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growth from the viewpoint of the country-level risks were the domestic political conflicts (which have overtaken changes in trade policy ranked as the second, and the third remaining the transitions of political leadership), while geopolitical instability is an outsize concern in Europe; changes in the trade environment were ranked as one of the top two threats to growth over the next year with regard to risks to growth at the company level. (FitzGerald et all, 2018) It was interesting to read within this global and domestic context that in the American magazine “Rolling Stone” – which was founded in 1967, in San Francisco, being known initially for its musical coverage and for Hunter S. Thompson’s political reporting (Wikipedia) – an article was recently published, entitled “The French Protests Do Not Fit a Tidy Narrative. The yellow vest protests are more nuanced than American pundits want to admit”, and in which the author, Matt Taibbi, concluded that: “We don’t need a new front to make centrism cool. We need to move on from centrism, to something a little less elitist.

Which is different from being elite, as most of the world seems to have realized by now”.

(Taibbi, 2018) Let’s also remember that: just two years ago, Taibbi was cited by David N. Balaam and Bradford Dillman at the page 46 of their book “Introduction to International Political Economy”, Sixth Edition, published by Routledge; (Balaam and Dillman, 2016) in January 2018, Taibbi presented a public talk (which was moderated by the Associate Professor David Weiss, who teaches courses in media studies and political communication) at The University of New Mexico on the topic “The Problems of Reporting in the Internet Age (and How to Counter Them)”. (Sheppard, 2018) In the last years we have witnessed accelerated discussions about topics such as: “How the digital age is killing the old political order”; (Cardy, 2016) “Rethinking Trade and Innovation for the Digital Age”; (Kahin, 2017) “Political science in the digital age: Mapping opportunities, perils and uncertainties”; (IPSA RC10 Electronic Democracy, 2017) “How ecommerce reshapes markets and firms’ strategies”; (Petropoulos, 2018) “The Global Debate on the Future of Artificial Intelligence”; (Dickow and Jacob, 2018) “The ethics of artificial intelligence: How AI can end discrimination and make the world a smarter, better place”.

(Hofheinz, 2018) As Brian Kahin argued in the above second article mentioned within this paragraph: “Internet platforms engaging millions of users have become institutions in their own right, managing markets, implementing policies and shaping economic exchange and social interaction”. While Paul Hofheinz underlined in the above last mentioned article within the same paragraph: “Far from making us weaker, the advent of artificial intelligence is one of mankind’s greatest triumphs… The machines are impressive, to be sure. But they are not human… The tragedy of mankind is that – far too often – we invent things before we know properly how to use them… Will we harness it (AI) for mankind’s good – a more graspable goal than is commonly understood? Or will we allow its power to deepen and exacerbate the very human fissures of the world into which we have launched it? The discussion is only beginning. And we will all have a role to play”.

It shouldn’t come as a surprise within the current global political economy that there are consistent preoccupations with regard to both opportunities and risks given impacts of AI (on jobs, trade, development, geopolitics, and stability), (Charlet, 2018) being considered that our societies are not prepared politically, legally and ethically for the deployment of AI (see the future of AI in the figure below), (Pauwels, 2018) taking into account the cycle of AI market development (the move from a hype phase into a reality phase), (Tractica) and the fact

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that we are just at the beginning of the Globalization 4.0 (called by Richard Baldwin the “third unbundling”) which is going to hit the service sector. (Baldwin, 2018)

Figure 1: The future of AI (Tractica) Source: Pauwels, E. (2018). The new geopolitics of artificial intelligence, The World Economic Forum, 15 Oct 2018 (work cited)

And as we identified another link with the second paragraph of our approach, allow us to highlight again the opinion recently expressed by Richard Baldwin, Professor of International Economics at Graduate Institute from Geneva: “If the blue-collar workers disrupted by Globalization 3.0 join hands with the white-collar workers who will be disrupted by Globalization 4.0, we may have an upheaval on our hands - what I call the Globotics Upheaval. Reading recent headlines, this upheaval may be wearing a gilet jaune”.

The true words of our Constantin Brancusi have always had the power to impress our mind: “To see far is one thing, going there is another”.

Theodor Valentin Purcărea Editor-in-Chief References Balaam, D.N., Dillman, B. (2016). Introduction to International Political Economy, Sixth Edition, Routledge, an imprint of Taylor and Francis Group, 2016, p. 46 Baldwin, R. (2018). If this is Globalization 4.0, what were the other three? The World Economic Forum, 22 Dec 2018. Retrieved from https://www.weforum.org/agenda/2018/12/if-this-is-globalization-4-0-what-were-theother-three/ Cardy, M. (2016). How the digital age is killing the old political order, Business Insider. Retrieved from https://www.businessinsider.com/how-the-digital-age-is-killing-the-old-political-order-2016-1 Charlet, K. (2018). AI Will Affect Jobs. What About the Rest of the Global Political Economy? Carnegie Endowment for International Peace, March 23, 2018. Retrieved from https://carnegieendowment.org/2018/03/23/ai-will-affect-jobs.-what-about-rest-of-global-political-economyevent-6839 Dickow, M. and Jacob, D. (2018). The Global Debate on the Future of Artificial Intelligence, Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs, Berlin, SWP Comment, No. 23 May 2018. Retrieved from https://www.swpberlin.org/fileadmin/contents/products/comments/2018C23_dkw_job.pdf FitzGerald, A., Singer, V. and Smit, S. (2018). - Economic Conditions Snapshot, December 2018: McKinsey Global Survey results. Retrieved from https://www.mckinsey.com/business-functions/strategy-and-corporatefinance/our-insights/economic-conditions-snapshot-december-2018-mckinsey-global-survey-results?

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Hofheinz, P. (2018).The ethics of artificial intelligence: How AI can end discrimination and make the world a smarter, better place, Lisbon Council (a Brussels-based think tank), May 2018. Retrieved from LISBON_COUNCIL_The_Ethics_of_Artificial_Intelligence.pdf Kahin, B. (2017). Rethinking Trade and Innovation for the Digital Age, Centre for International Governance Innovation (CIGI), April 11, 2017. Retrieved from https://www.cigionline.org/articles/rethinking-trade-andinnovation-digital-age Pauwels, E. (2018). The new geopolitics of artificial intelligence, The World Economic Forum, 15 Oct 2018.

Retrieved from https://www.weforum.org/agenda/2018/10/artificial-intelligence-ai-new-geopolitics-un/ Petropoulos, G. (2018). How e-commerce reshapes markets and firms’ strategies, Bruegel (a European think tank specializing in economics), May 7, 2018. Retrieved from http://bruegel.org/2018/05/how-e-commercereshapes-markets-and-firms-strategies/ Tachibana, C. (2018). Top employers embrace change based on a stable foundation, Science/AAAS, Oct. 25, 2018. Retrieved from https://www.sciencemag.org/features/2018/10/top-employers-embrace-change-basedstable-foundation Taibbi, M. (2018). The French Protests Do Not Fit a Tidy Narrative. The yellow vest protests are more nuanced than American pundits want to admit, Rolling Stone, December 13, 2018. Retrieved from https://www.rollingstone.com/politics/politics-features/france-protests-yellow-vests-768810/ Sheppard, S. (2018). Rolling Stone writer to discuss problems reporting in the internet age, UNM News, January 18, 2018. Retrieved from https://news.unm.edu/news/rolling-stone-writer-to-discuss-problemsreporting-in-the-internet-age *** https://en.wikipedia.org/wiki/Rolling_Stone *** Political science in the digital age: Mapping opportunities, perils and uncertainties, 4-6 December 2017, Hannover, Germany. Retrieved from http://rc10.ipsa.org/public/A5_hannover-JOINT-Recto-Verso.pdf *** Artificial Intelligence Market Forecasts. Retrieved from https://www.tractica.com/research/artificialintelligence-market-forecasts/

The Magazine is the result of a true partnership, by bringing scientists and practitioners together proving the passionate pursuit of knowledge for wisdom, the real passion for acquiring and sharing this knowledge inviting the readers to maturing interdisciplinary dialogue and building a transparent culture network.

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The Information and Communications Technology is Driving Artificial Intelligence to Leverage Refined Knowledge for the World Sustainable Development -Part1Prof.Eng.Ph.D. Victor GREU

Abstract The paper presents an analysis of the complex challenges of artificial intelligence (AI) contribution in leveraging refining knowledge, in the dynamic context generated by information and communications technology (ICT) exponential evolution aiming the progress of the Information society (IS) toward Knowledge Based Society (KBS).

Based on Internet of Things (IoT) dissemination of intelligence everywhere on Earth, IoT and AI development will be strongly linked ‘’learning from everything’’. Using IoT sensors, AI could learn from everywhere and eventually turn data into information/knowledge, inducing the crucial role of IoT and AI in Industry 4.0 revolution.

For leveraging refining knowledge at World scale, AI is encompassing a large and diverse range of processes, referring to dynamic events and things, where eventually a huge amount of data will be generated.

The AI role is there to process these data in order to extract information or even knowledge, as eventually to contribute to refining knowledge.

AI has to be seen and conceived not as “a replacement but rather as an enhancement of HI”, but this relation has to be mutually understood in order to increase precision, efficiency and sustainability of ICT development in IS/KBS, by refining knowledge. Eventually, refining knowledge could be obtained by combining the collected data and prior knowledge, but keeping the AI/HI combination alive.

In order to increase the confidence in the AI deep learning system, the old advice “divide et impera" could be used and applied as “different parts can be validated in different ways”. Therefore, a complex deep learning AI system could be better controlled from safety point of view if we can divide it in subsystems with higher safety parameters or easier to validate.

The paper also presents the importance of identifying and adding to the AI deep learning system “some rules and some human knowledge”, which, by our opinion, is just the most difficult, advanced but actual issue for supporting deep learning AI to really leverage knowledge refining, not only increase safety.

A prominent paper conclusion is that these rules include a structural approach of the collected data/information (known also as “knowledge engineering”), as “the better that information is structured, the more effective the program is”, but also data pre-filtering in order to obtain relevant knowledge along with usage of crowd intelligence in the process.

The final conclusion is that AI processes toward refined knowledge are more and more complex as we are heading to higher performance in the ICT/IS/KBS dynamic context and their further and timely deep analysis is necessary for a sustainable World development.

Keywords: Artificial Intelligence, Refining Knowledge, Machine Learning, Deep Learning, Human Intelligence,

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Internet of Things, Information Society, Knowledge Based Society, Knowledge Engineering, Sustainable World Development.

JEL Classification: L63; L86; M15; O31; O33

By three methods we may learn wisdom: First, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest.

Confucius 1. The rise and rise of artificial intelligence in the exponential context of information and communications technology, by ‘’learning from everything’’ The old advice “learn from everything” is now more actual than ever, although, in a traditional approach, people would really have a challenge to simply learn from all complex and dynamic ecosystem they are living in, but a smarter approach should be to refine existing knowledge and adapt to the context by optimizing their actions and resources.

In fact, this smarter approach includes, among resources, the huge potential of the Information and Communications Technology (ICT), as the main driving factor of the Information Society (IS) toward Knowledge Based Society (KBS).

The ICT actual essential potential and context include prominent advances like Cloud, Big Data, Internet of Things (IoT). Among them, artificial intelligence (AI) is actually perhaps the most dynamic and important element [23][26][22].

Many authors consider this context as Industry 4.0 revolution, adding to above components robots, nanotechnology, quantum computing, biotechnology, 3D printing, autonomous platforms and so on [15][16][18].

We just consider that all are included or essentially leveraged by ICT and this way the driving role of ICT in IS/KBS is fulfilled.

More than this, it is important to observe that the new revolution will be made by the impact of ubiquitous communications and connectivity more than by technology, due to the power of digital disruption leveraged by digital connectivity [17].

On the same matter we have already presented our opinion that the future of ICT and consequently of IS/KBS progress will be most probably crucially influenced by learning from nature’s thousand years research, i.e. in bio-computing, biotechnology etc. [12][27].

The ways these advances are in fact cooperating give the force of ICT and IS/KBS, as they are integrating the progress of all activity fields and humankind life improvement processes (including economy, health care, science, education and creative potential).

First of all, a basic feature of these is the fact that IoT will provide a dissemination of intelligence everywhere on Earth, so IoT and AI development will be strongly linked.

This way we have just arrived to the above advice (‘’learn from everything’’), as using IoT sensors AI could learn from everywhere and eventually turn data into information/knowledge.

Here we have to recall the amazing digital transformation that ICT induces and the crucial role of IoT and AI in Industry 4.0 revolution, by some examples.

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Of course, the main impact that matters is on industry and generally on economical domains, but in a short view, our entire social environment will be dramatically influenced, as [4]: “An athletic shirt that measures heart rate. A school backpack that relays a child’s location. Networked homes full of smart appliances and tools.

The Internet of Things (IoT) already makes it possible for intelligent products to simplify people’s daily lives. For companies, it’s revolutionizing the tracking and maintenance of physical objects, while its massive new streams of data improve decision making. Linking the physical and digital worlds could generate up to $11.1 trillion a year in economic value by 2025, in settings including retail, healthcare, manufacturing, and technology.’’

Above these, the authors notice that the whole World economy will be crossing dramatic (generally benefic) changes: “The Internet of Things—sensors and actuators connected by networks to computing systems—has received enormous attention over the past five years…Our central finding is that the hype may actually understate the full potential—but that capturing it will require an understanding of where real value can be created and a successful effort to address a set of systems issues, including interoperability. To get a broader view of the IoT’s potential benefits and challenges across the global economy, we analyzed more than 150 use cases, ranging from people whose devices monitor health and wellness to manufacturers that utilize sensors to optimize the maintenance of equipment and protect the safety of workers. Our bottom-up analysis for the applications we size estimates that the IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. At the top end, that level of value—including the consumer surplus— would be equivalent to about 11 percent of the world economy…”

The intelligent products to simplify people’s daily lives are in fact very important, but we should observe that beyond the benefits we see everywhere, such huge development of IoT could generate a remarkable increase of World economy, as 11%in few years, which confirms and update the role we already mentioned for ICT in IS/KBS. We also consider that the AI potential is actually aiming higher levels of performance [5]: “The availability of nearly unlimited, affordable data storage and processing has ushered in the Petabyte Age. Big Data is revolutionizing how we approach everything from science (e.g. genome sequencing, drug discovery), to business (e.g. retail analytics, collaborative filtering), to politics (e.g. the Obama campaign's Narwahl). Incredible advances in Natural Language Processing (NLP) technologies have come about as a result of Big Data, enabling powerful search engines, automated language translation, and cloudbased speech recognition. These advances in NLP impact our everyday lives at home and at work, but they have yet to play a major role in how we make games, how we tell stories in games, and what stories can be told. ’’ We think that it is important to foresee the next step, in “everything” of our IS/KBS environment, as „what stories can be told“.

With other words, a main purpose of AI high level applications should be innovation and optimization of our development and resources (including humankind health and

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evolution), in a sustainable manner, as the ICT exponential pace could also contribute to less desired implications [14][6][20][27].

We have already analysed such implications in the larger context of green ICT, pointing climate changes, Earth resources fading and humankind health/evolution, i.e. in a vision for a sustainable World progress [20][14].

This “vision” is fortunately more and more foreseen in our dynamic World and creates the premises for achieving such high and diverse hopes [8]: “The vision of artificial intelligence (AI) is often manifested through an autonomous software module (agent) in a complex and uncertain environment. The agent is capable of thinking ahead and acting for long periods of time in accordance with its goals/objectives. It is also capable of learning and refining its understanding of the world. The agent may accomplish this based on its own experience, or from the feedback provided by humans.”

Here the AI impact on IS/KBS sustainable progress is clearly directed to a higher level of approach, as learning from everything and then contributing to refining knowledge.

Eventually, this approach of AI performance main target could help to a better understanding of the World evolution challenges and optimization ways.

Another observation is that AI approach could not be separated from humans, as we also presented in the general context of using AI in collective intelligence [3].

Moreover, the optimization of the complex relation between AI and human intelligence (HI) is the way toward best AI performance and matching the goal of AI contribution to refining knowledge, step by step in real time, following or even anticipating, as close as possible, the fast changing of our environment/ecosystem.

Following our ecosystem is a huge goal, especially because it has to be done in a systemic approach, i.e. we have to first perceive the big picture and then the details, at World scale.

For example, whatever our philosophy, we have to consider first the business heart of the World, because there is located the engine of our IS/KBS, where AI and IoT will have a systemic impact [1]: “There has never been a better time to achieve impact with (your) data. More and more data is available, computing power is ever increasing, and mathematical techniques and the so-called data science are getting more and more advanced. What’s more, “digital” and “data” have become the talk of the town. Yet while talking about data as the “new oil” or the “new gold” is fairly widespread these days, several technology- and business-related difficulties make understanding data’s importance and realizing its potential a persistent challenge.”

Beyond this opportunity picture, the authors also point the importance, the impact and the potential of IoT and machine learning AI emergence: “Not only has the sheer volume of available data – mainly driven by the IoT – grown exponentially over the past five years and is expected to continue to do so ... but also have new tools been developed for turning this flood of raw data into insights and eventually into action. Machine learning, a term that encompasses a range of algorithmic approaches from statistical methods like regressions to neural networks, has rapidly advanced to the forefront of analytics.

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Underpinning this progress in its entirety has been steady improvement in computational power from better processors and graphics processing units, increased investment in massive computing clusters often accessed as cloud services, improvements in storage, and strong price decreases for all relevant parts...”

Consequently, it results just clear what crucial progress this data science could provide at World scale when applying its fundamentals methods and techniques, including machine learning (that encompasses a range of algorithmic approaches from statistical methods like regressions to neural networks) and massive computing clusters often accessed as cloud services.

On the other hand we have to notice that applying all these methods, techniques and technologies to the economical World is far from being simple and always efficient.

More than these, the complexity is much increased by all other activity domains and aspects exceeding World economy, but covering entire Earth ecosystem and humankind life.

That is why the answers to all challenges could come only by sustainably developing AI/ICT for IS/KBS with wisdom, i.e. carefully refining knowledge step by step and adjusting the development pace the way it allows ... time for deep thinking!

2. ’’When wisdom meets machine’’ or when AI is leveraging refined knowledge Among many approaches [10][3][19], we consider that intelligence has a long way to become wisdom and due to this complex reality the subject must be time and time again, deeper and deeper analysed, especially when speaking about AI and human intelligence (HI) at Earth scale [7][25].

We also consider that, in our turn we could learn from Confucius thinking, as perhaps it is better to combine reflection, imitation and experience in order to obtain best results, but the real wisdom is just to choose the weights of the three ingredients on every step of the above mentioned ... deep thinking.

Anyway, we have to be sure to avoid the bitter method only, i.e. avoid the way the actual exponential pace could lead sometime: learning only from or long after ... experience.

This way we have just arrived to the paper main idea, to use our imagination and deep thinking in order to develop AI that could help us to get the maximal profit from the knowledge and even from refined knowledge the deep perception of all ecosystem processes could generate by data. That will be a better understanding of the World and especially of its ... future.

Following these high ideals we could just try to analyse some approaches and examples by which AI and HI should be implied in the actual/future AI/ICT development, pointing the challenges and issues that sometimes are either ignored or still not yet perceived with all their potential consequences.

Speaking about the potential, we think that a relevant and prolific opinion, exceeding energy saving and production efficiency (and even Industry 4.0), was given, although indirectly (by IoT), in [6]: “In June 2013, the leader in the global industrial system field, General Electric (GE), held a leadership forum on the theme “when wisdom meets machine” in Beijing, which

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pointed out that the Industrial Internet of Things would set off the third industrial revolution and innovation, and will play a great role in energy saving and production efficiency ...“ We have considered this quote as relevant not only for developing this second section of the paper, but also for simply characterizing these complex and integrated processes of AI/IoT/ICT along with HI – as we could not speak about wisdom without HI. In fact our subject includes this AI challenging “meeting” of machine and wisdom, which in turn exceeds even AI, as relating to a long and complex chain of waves, phases and processes where humankind innovation is rendering more and more ... challenges to its wisdom.

As we have mentioned above, the way of AI to leveraging, at World scale, refined knowledge, is long, challenging and encompassing a large and diverse range of processes, referring to dynamic events and things, where eventually a huge amount of data will be generated.

The AI role is there to process these data in order to extract information or even knowledge, as eventually to contribute to ... refining knowledge.

A systemic approach of optimizing this complicate and performant task of AI is to first refine the phase of extracting information, as it is also suggested by [2]: “A deep-learning system’s ability to recognize patterns is a powerful tool, but because this pattern recognition occurs as part of algorithms running on neural networks, a major concern is that the system is a “black box.” Once the system is trained, data can be fed to it and a useful interpretation of those data will come out. But the actual decision-making process that goes on between the input and output stages is not necessarily something that a human can intuitively understand. This is why many companies working on vehicle autonomy are more comfortable with using traditional robotics approaches for decision making, and restrict deep learning to perception. They reason that if your system makes an incorrect decision, you’d want to be able to figure out exactly what happened and then make sure that the mistake won’t be repeated.”

Although this case is referring to deep-learning AI applications for autonomous driving, it points a general valuable and actual issue of AI performance evolution (based on deep-learning): the threshold between perception and decision making classes of AI applications, along with the natural preoccupation for safety and legal conformity.

We consider important and we also approached this aspect [14][25], as from safety and legal conformity this issue is easy to be extended to the general responsibility of sustainable development we have mentioned in the first section of the paper, implying as a necessity the HI control and ... imagination.

As a confirmation, the same author suggested the necessity of including human knowledge for safety reasons: <<”This is a big problem,” Tandon acknowledges. “What we want to be able to do is to train deep-learning systems to help us with the perception and the decision making but also incorporate some rules and some human knowledge to make sure that it’s safe.” While a fully realized deep-learning system would use a massive black box to ingest raw sensor data and translate that into, say, a turn of the steering wheel or activation of the accelerator or brakes, Drive has intentionally avoided implementing a complete end-to-end system like that, Tandon says. “If you break it down into parts where you’re using deep learning, and you

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understand that different parts can be validated in different ways, then you can be a lot more confident in how the system will behave.”>> More than these, here we notice a very concrete, but natural approach to increase the confidence in the deep learning system, by using the old advice “divide et impera", applied as “different parts can be validated in different ways”.

With other words, a complex system could be better controlled from safety point of view if we can divide it in subsystems with higher safety parameters or easier to validate.

It is also important to notice the idea of identifying and adding to the deep learning system some rules and some human knowledge, which, by our opinion, is just the most difficult, advanced but actual issue for AI, so it could really leverage knowledge refining, not only increase safety.

A confirmation of this approach is given in the interesting and larger context of AI role in innovation [10]: „However, we believe that despite the exceptional improvements in machine learning, human-to-human interaction will always be important.

AI opens up incredibly exciting possibilities in the world of innovation and it is about how these are integrated into organisations that is important. Avoid viewing AI as a replacement but rather as an enhancement. It is a process that organisations (and their humans) can leverage to improve on current processes, increase efficiency at an unparalleled rate and ultimately grow into something even better.”

Here we also agree that AI must be seen and conceived not as a replacement but rather as an enhancement of HI, but this relation has to be mutually understood in order to increase precision, efficiency and sustainability of ICTdevelopment in IS/KBS, by ... refining knowledge [3][17][22].

Eventually, refining knowledge could be obtained by smartly combining the collected data/information and prior knowledge, using both internal and external sources [11]: “AI can use a combination of data available internally within an organisation along with the various digital footprints available across the web. Using this extensive mine of data and by acknowledging the various signals, artificial intelligence works by analysing countless correlations and trends. With this information in place, AI can provide organisations with solutions and opportunities that would likely have remained undiscovered otherwise.”

It is easy to observe that this approach could be logically extended and generalized from the organization context to any ecosystem context, making the appropriate adjustments, but keeping the AI/HI combination alive [3].

The implementation of such approach is confirmed and detailed in a relevant analysis made in [10]: “AI encompasses a class of application that allows for easier interaction with computers and also allows computers to take on more of the types of problems that were typically in the realm of human cognition.

Every AI program interfaces with information, and the better that information is structured, the more effective the program is. A corpus of information contains the answers that the program is attempting to process and interpret. Structuring that information for

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retrieval is referred to as knowledge engineering and the structures are called knowledge representation.

AI can refine the process by using data to filter the most valuable intelligence from the crowd. It will be able to distinguish the relevant ideas that will be most effective in solving the problems posed. Rather than seeing AI as a means of taking over the process and rendering open innovation obsolete, it is more productive to view it as a means of streamlining the process to provide greater value.”

The details we can reveal from here are in fact some useful methods of optimizing the AI system, pointing efficiency and precision, all implying also HI. Considering the importance of such methods, it is worth to clearly express them, in the general context of refining knowledge with added AI means.

First is to notice that, on the above line of “divide et impera", we have to generally consider a structural approach of the collected data/information, as „the better that information is structured, the more effective the program is”.

More than these, we find that such important processes tend to become a new activity field, called knowledge engineering.

Last but not least, “AI can refine the process by using data to filter the most valuable intelligence from the crowd”, i.e. a twofold idea, pointing data pre-filtering in order to obtain relevant knowledge along with using crowd intelligence in the process, as we have already presented [3][25].

We may see that deep analysis of AI processes toward refined knowledge is more and more complex as we are heading to higher performance in the ICT/IS/KBS dynamic context and its further and timely continuation is necessary for a sustainable World development.

3. Conclusions The paper approached the complex challenges of AI contribution to leveraging refined knowledge, in the dynamic context generated by ICT exponential evolution aiming the progress of IS toward KBS. As IoT will provide a dissemination of intelligence everywhere on Earth, IoT and AI development will be strongly linked ‘learning from everything’’. Using IoT sensors AI could learn from everywhere and eventually turn data into information/knowledge, inducing the crucial role of IoT and AI in Industry 4.0 revolution.

The road of AI to leveraging, at World scale, refined knowledge, is long, challenging and encompassing a large and diverse range of processes, referring to dynamic events and things, where eventually a huge amount of data will be generated. The AI role is there to process these data in order to extract information or even knowledge, as eventually to contribute to refining knowledge.

AI must be seen and conceived not as a replacement but rather as an enhancement of HI, but this relation has to be mutually understood in order to increase precision, efficiency and sustainability of ICTdevelopment in IS/KBS, by refining knowledge. Eventually, refining knowledge could be obtained by combining the collected data and prior knowledge, but keeping the AI/HI combination alive.

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A natural approach to increase the confidence in the AI deep learning system is by using the old advice “divide et impera", applied as “different parts can be validated in different ways”. That is, a complex deep learning AI system could be better controlled from safety point of view if we can divide it in subsystems with higher safety parameters or easier to validate.

It was also presented the importance of identifying and adding to the deep learning system some rules and some human knowledge, which, by our opinion, is just the most difficult, advanced but actual issue for AI, so it could really leverage knowledge refining, not only increase safety.

A prominent conclusion is that these rules include a structural approach of the collected data/information (known also as knowledge engineering), as “the better that information is structured, the more effective the program is”, but also data pre-filtering in order to obtain relevant knowledge along with usage of crowd intelligence in the process.

AI processes toward refined knowledge are more and more complex as we are heading to higher performance in the ICT/IS/KBS dynamic context and their further and timely deep analysis is necessary for a sustainable World development.

REFERENCES [1]Niko Mohr, Holger Hürtgen, Achieving business impact with data - A comprehensive perspective on the insights value chain,Digital McKinsey 04.2018 Copyright © McKinsey & Company www.mckinsey.com, [2]Evan Ackerman, How Drive.ai Is Mastering Autonomous Driving With Deep, Posted 10 Mar 2017, IEEE Spectrum [3]Victor Greu, Extending information and communications technologies’s impact on knowledge based society through artificial and collective intelligence –(Part 3), Romanian Distribution Committee Magazine, Volume 9, Issue 3, Year 2018.

[4]James Manyika, Michael Chui, Peter Bisson, Jonathan Woetzel, Richard Dobbs, Jacques Bughin and Dan Aharon, UnlockingthepotentialoftheInternetof Things, Report -McKinsey Global Institute - June 2015,https://www.mckinsey.com/ [5]Jeffrey David Orkin, Collective Artificial Intelligence: Simulated Role-Playing from Crowdsourced Data, Dissertation, MIT, Feb. 2013.

[6]Jiandong Zhang, Xiaoyu Qu, Arun Kumar Sangaiah, A Study of Green Development Mode and Total Factor Productivity of the Food Industry Based on the Industrial Internet of Things ,IEEE Communications Magazine, Volume: 56 Issue: 5, 2018 [7]Victor Greu, Developing information and communications technologies with more artificial intelligence, using artificial intelligence, when internet of things is “intelligence everywhere”-(Part 1), Romanian Distribution Committee Magazine, Volume 7, Issue 4, Year 2016.

[8]Daniel S. Weld Mausam Christopher H. Lin Jonathan Bragg, Artificial Intelligence and Collective Intelligence, https://homes.cs.washington.edu/~weld/papers/ci-chapter2014.pdf [9]Victor Greu et all, Human and artificial intelligence driven incentive-operation model and algorithms for a multi-purpose integrated crowdsensing-crowdsourcing scalable system - paper submitted to International Conference Communications 2018 (Politehnica University of Bucharest, Romania Military Technical Academy, IEEE Romania), June 2018.

[10]Seth Earley, There Is No AI Without IA, 2016, IEEE IT Professional ( Volume: 18, Issue:3, May-June 2016) [11]Mike Sirius, How artificial intelligence and innovation will interact, June 5, 2017, Idea Drop Ltd,http://ideadrop.co/artificial-intelligence-innovation/ [12]Victor GREU, Information and Communications Technologies are Learning from

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Nature’s “Research” to Push the Performance Limits, Romanian Distribution Committee Magazine, Volume 5, Issue 1, Year 2014 [13]Nelson Sizwe. Madonsela, Paulin. Mbecke, Charles Mbohwa, Integrating Artificial Intelligence into Data Warehousing and Data Mining, Proceedings of the World Congress on Engineering and Computer Science 2015 Vol II WCECS 2015, October 21-23, 2015, San Francisco, USA [14] Victor Greu, Searching the right tracks of new technologies in the earth race for a balance between progress and survival, Romanian Distribution Committee Magazine, Volume 3, Issue1, Year 2012.

[15]***World Economic Forum White Paper Digital Transformation of Industries: In collaboration with Accenture, Digital Enterprise January 2016, http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/ pages/files/digital-enterprise-narrative-final-january -2016.pdf [16]Mike Shaw, Digital disruption impacts every industry. Here's how to win in an era of constant change, enterprise.nxt, 2016 Hewlett Packard Enterprise Development LP, https://www.hpe.com/h20195/V2/GetPDF.aspx/4AA6-7153ENW.pdf [17]Victor Greu, Information and communications technologies drive digital disruption from business to life on earth -(Part 1), Romanian Distribution Committee Magazine, Volume 8, Issue 2, Year 2017.

[18]Mark Knickrehm, Bruno Berthon, Paul Daugherty, Digital disruption: The growth multiplier Optimizing digital investments to realize higher productivity, Copyright © 2016 Accenture, https://www.accenture.com/_acnmedia/PDF4/Accenture-Strategy-Digital-Disruption-Growth-Multiplier.pdf [19]*** , Transforming data into knowledge, Collective Learning group at the MIT Media Lab, 2017, https://www.media. mit.edu/ groups/collective-learning/overview/.

[20]Victor Greu, Information and communications technologies go greener beyond IoTbehind is all the earth-Part1, Romanian Distribution Committee Magazine, Volume 7, Issue 2, Year 2016 [21]Anas Baig, Artificial Intelligence Can Solve The Biggest Crowdsourcing Problem, Aug 11, 2017, https://crowdsourcingweek.com/blog/artificial-intelligence-can-solvebiggest-crowdsourcing-problem/ [22]Victor Greu, Extending information and communications technologies’s impact on knowledge based society through artificial and collective intelligence –(Part 2), Romanian Distribution Committee Magazine, Volume 9, Issue 2, Year 2018.

[23]JP Kloppers, Data mining for social intelligence – opinion data as a monetizable resource,may 12, 2017, http://dataconomy.com/2017/05/data-mining-opinion-data/ [24] Bhupinder Kour, The Rise of Machine Learning and AI is Improving Lives in 2018, https://www.smartdatacollective.com/rise-of-machine-learning-ai-improving-lives/ [25]Victor Greu, Tomorrow’s paradox: refining knowledge by smarter information and communications technologies while humans tend to become a limited factor of performance, Romanian Distribution Committee Magazine, Volume 7, Issue1, Year 2016.

[26]Ioannis Karydis, Spyros Sioutas, Markos Avlonitis, Phivos Mylonas and Andreas Kanavos, A Survey on Big Data and Collective Intelligence, ALGOCLOUD 2016, Aarhus, Denmark, August 22, 2016, Revised Selected Papers [27]Victor GREU, Evaluating the development steps based on life-inspired strategies for the information and communications technologies, Romanian Distribution Committee Magazine, Volume 2, Issue 4, Year 2011

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The Visual Design Influence on Customer Perceptions of Online Assortments Cosmin TĂNASE

Abstract In the future, we expect to see more shopping on-line or on smartphones. This suggests that understanding how visual design decisions can influence consumers’ reactions to online assortments is important. New advances in neuro-marketing techniques, such as sophisticated eye tracking methodology, can help understand exactly what drives consumers’ attention and processing efficiency. Visual stimuli on small screens is frequently processed very quickly leading to perceptions that form automatically often without cognitive intervention. Thus, retailers should strategically use design elements of the assortments and of packaging to direct attention and increase the ease of processing. Assortments that are easier to process are liked more and are judged to have more perceived variety. Complexity must be minimized so that assortments can be parsed immediately.

Keywords: Online Retailing, Assortment, Shopping Behavior, Product Choices, Visual Options JEL Classification: L81, M31

The percentage of shopping done online is expected to grow exponentially. That is not to say that physical stores will go away, but even when purchases are ultimately made in a physical store, the

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shopping process frequently will start online. In this omni-channel world, the smartphone will play an important role in making shopping connections. “It’s essential to be there on mobile, yes,” said Google director of marketing for performance ads Matt Lawson, “But it’s even more important to create rich and relevant experiences that connect your stores with shoppers in all of their micromoments—and encourage those shoppers to come back again and again.”. There are two things worth noting about this predicted change in shopper behavior. First, when much of consumers’ exposure to retail assortments comes through a digital interface, visual design decisions, both in how the overall assortment is depicted and in how the individual items within the assortment are shown, will become critical for influencing consumer reactions.

While such stimulus-based judgments are important in offline shopping, they will be particularly relevant in online shopping, because the focus is narrower (on a screen rather than at a multi-sensory physical store level), and online environments can be more attention demanding. Second, many critical perceptions can be formed in these “micro-moments” that occur throughout the consumer journey, impressions that are often made instantaneously and automatically. These can be decisive moments when preferences are shaped. Paralleling this change in observed shopping behavior has come new research that helps us understand better what catches consumers’ attention online, how consumers process stimuli, and how all of this influences perceptions. For example, by using sophisticated eye-tracking techniques we now have the capability to identify the exact stimuli that consumers fixate on when looking at assortments online, the sequence in which they fixate on these specific items, and the total time that consumers spend fixating on each item as well as on the assortment overall. With this knowledge, we can determine exactly: 1. What features of an assortment directs people’s attention, and 2. What are the assortment variables that retailers can use to facilitate the ease of processing?

Consumer Attention We know that visual search is not random but is guided by the salience of objects; salience, in turn, results from a combination of goal-directedness and stimulus-driven factors. Sometimes bottom up stimulus related visual patterns can lead directly to choice, but more often top down decisions, (e.g., involvement, pre-existing preferences, goals, expectations, memory) and marketing variables (e.g., price, sales support, delivery options) will interact in final choice process. Even though goal-directed factors may exert a larger effect on purchase decisions, small stimulus-driven changes, to aspects of displays or packaging, or both, that capture consumers’ attention are essential because they can result in increased brand familiarity, changes in perceptions and therefore ultimately affect choice.

Further, even mere attention to items in a category can in and of itself affect consumer purchases.

Thus, isolating and understanding these bottom-up, stimulus-based, and frequently automatic effects is important, and will be focus here. While esthetic considerations are also important in building brand and store loyalty, the focus here is not on esthetic desirability, but more specifically on design

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criteria that differentially affect consumer attention. Processing Fluency Once consumers pay attention to items within an assortment, they then have to make sense of it. Visual variables can influence the speed and accuracy of low-level processes. This suggests that the design elements of an assortment can make it easier for consumers to process stimuli.

Processing fluency is a term that encompasses all sources that facilitate processing in any form.

Research shows that increasing fluency feels good and this mildly positive affect can serve as input into judgment. Fluency not only increases liking of a product but also decreases deferral. In addition, consumers hold lay theories of mental processes and the ease or difficulty of the experience causes them to form inferences. When fluency is high, consumers feel more confident and are more likely to form positive inferences and perceptions. When processing is more difficult or more disfluent, processing styles shift from System 1 (automatic processing) to System 2 (more analytic processing).

Using this knowledge about processing fluency allows to formulate three principles of design for online assortments: 1. Assortments that are designed to be easier to process will evoke positive affect and they will be liked more than those that are harder to process 2. When assortments are easier to process, people will form positive inferences about the perceived variety that is included in the assortment. 3. When assortments are more complex, retailers need to provide tools or structure either to facilitate cognitive processing or to make the assortment less disfluent. Finally, when shopping online, it is easy to drill down through the assortment and focus on an individual item. This type of scrutiny makes packaging decisions and product shape decisions more salient. Graphic product-level design issues will matter more here as well.

Patterns of Attention Today we can accurately measure attention using sophisticated eye-tracking techniques capable of recording fixations and saccades. Saccades are rapid jumps of the eyes (they last 20–40 ms) during which no useful information is acquired. Fixations are moments between the saccades when the eyes are relatively still and a person is focusing on a specific stimulus. Fixations are necessary for object identification. Scan paths are a sequence of fixations and saccades that track the order in which stimuli are viewed. Using eye-tracking techniques, we can identify which stimulus a viewer sees first, last, and in between, the duration of time fixated on each, as well as the total duration of the episode. What people pay attention to is a function of what the brain assesses as most important, and the assessment can either come from “top down” (i.e., based on previously fixated information, prior knowledge, goals or expectations) or be “bottom up” (based on the salient attributes of the environmental stimuli).

Visual Features of the Assortment Influence Involuntary Attention Involuntary attention is influenced by visual properties of the assortment. These properties include relative salience of objects within the assortment, location effects of those items on a screen, and number of facings and display size. Retailers can also use techniques like color blocking to direct involuntary attention. Visual Salience Bias Studies conducted by Milosavljevic et al. (2012) have

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shown that attention to a brand is a function of its salience within the assortment and this visual salience can affect not only consideration but also choice. Even at rapid decision speeds, items that are more visually salient (due, e.g., to brightness or color) “pop-out” of an assortment and lead to automatic attention towards those items, which can be measured through eye-tracking by increases in the duration of fixations towards those items. In a unique experimental design that eliminated other explanations, Milosavljevic et al. (2012) found that higher liking ratings were given to stimuli at the time of choice as a function of the amount of attention that they received during the decision making process. In this study, however, consumers had previous experiences with some of the brands. When consumers had strong preferences for a particular brand, they were good at choosing that brand in rapid decision-making tasks and presumably paid more attention to those brands— perhaps not surprising. But when preferences were weak, consumers were more influenced by the visual features of the stimuli. Milosavljevic et al. (2012) found that when brands were relatively similar, consumers ended up choosing items that were visually prominent at least 40% of the time, even when these choices were inconsistent with prior preferences.

This suggests that more visually salient options are more likely to be chosen because of the way the visual information is processed. This visual salience bias is long lasting and can influence choice more than changes in preferences do, especially when preferences are relatively weak.

One of the advantages of online retailing is that assortment size can get very large, because it is not limited by physical showroom space. Clearly, all things equal, larger assortments should be better than smaller assortments because they allow more choice flexibility, optimization, variety, and so forth. In fact, unsurprisingly, bigger assortments can lead to more online sales. But to the degree that large assortments increase choice overload, require greater cognitive effort (i.e., move consumers to System 2 processing) delay decision-making, and so forth, they are detrimental.

When the assortment gets large, visual design features can be used either to reduce the disfluency of the assortment or to provide tools that can help consumers parse the information and appreciate the variety of the assortment. Specifically, the following structural elements affect processing fluency for large assortments: (1) Organizational structure, (2) Visual versus verbal depiction, and (3) Categorization and filtering. These tools can affect both consumers’ affective reactions to the assortments as well as the perceived variety. On the flip side, when the assortment is smaller and thus disfluency is significantly reduced, these same structural variables can be used, in reverse (e.g., random vs. organized) to increase perceived variety and affect.

One critical insight is that retailers should first determine how consumers themselves categorize the items within these large assortments, and then organize the shelf accordingly. For familiar categories, congruency between a consumer’s internal categorization structure and external store layout leads to higher perceptions of variety and higher satisfaction with product choices. For example, if consumers think about wines by grape varieties and the website organizes them by brand

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name, consumers will experience less satisfaction with the choice process and take more time to process. When the two organization structures are incongruent, consumers become confused and overwhelmed by large assortments and are unable to perceive the full extent of the variety offered.

These conclusions are consistent with eye-tracking research, which has found that when consumers can easily find an item within an assortment they experience positive affect and shopping enjoyment.

If the product category is unfamiliar, and consumers do not have a well-defined categorization scheme for it, organizing the assortment in a manner consistent with shopping goals has the same effect. The mere presence of categories within large assortments can positively increase satisfaction with an assortment for consumers who are unfamiliar with a category.

Conclusion In the future, more shopping will be on-line. This will not eliminate the importance of the physical store, but it will change how consumers shop. Even if a shopper buys in a physical store, likely some part of the shopping process will be online. Since the online environment is essentially visual, in the future it will be more important for retailers to understand how various design decisions can affect consumer perceptions. Particularly as consumers move more of their shopping journey to mobile devices, consumers’ attention to these retailer visual stimuli can be very quick and perceptions form almost automatically without cognitive intervention. Understanding the fundamental psychology of attention, perception and automatic inference is critical. Although obviously, top-down factors like expectations, familiarity, expertise, goals will moderate these effects, here the focus is on stimulusdriven effects, or bottom-up reactions to design decisions. Perceptions form as a function of what stimuli consumers are exposed to, how often and in what manner they pay attention to those specific stimuli, and how they interpret what they see. In the future, retailers should use design elements to direct attention and to increase the perceptual fluency, or ease of processing of the stimuli. This suggests in general, to increase positive feelings towards their assortments retailers will find that “less is more,” at least at the initial interface with the consumer. Thus, small assortments and assortments with less information intensity (and more white space) are liked more. Prioritizing on key items will also be very important, and such prioritization can make the overall assortment easier to process. Design elements, such as visual salience, can direct attention to specific items.

References [1] [2] [3] [4] [5]

Arnheim, Rudolf (1974), Art and Visual Perception: A Psychology of the Creative Eye, Berkeley: University of California Press.

Arnold, Stephen J., Tae H. Oum and Douglas J. Tigert (1983), “Determinant Attributes in Retail Patronage: Seasonal, Temporal, Regional and International Comparisons,” Journal of Marketing Research, 20 (May), 149–57.

Atalay, A. Selin, H. Onur Bodur and Dina Rasolofoarison (2012), “Shining in the Center: Central Gaze Cascade Effect on Product Choice,” Journal of Consumer Research, 39 (December), 848–66.

Kahn, Barbara E., Using Visual Design to Improve Customer Perceptions of Online Assortments, Journal of Retailing (2016) Milosavljevic, Milica, Vidhy Navalpakkam, Christof Koch and Antonio Rangel (2012), “Relative Visual Salience Differences Induce Sizable Bias in Consumer Choice,” Journal of Consumer Psychology, 22 (1), 67–74.

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Driving Competitive Advantage for Supply Chains

by Delivering Relevant and Personal Customer Engagement Theodor PURCĂREA

Abstract Businesses are moving forward in a strategic way from the future value chain project to the next-generation supply chain, to AI and blockchain driving competitive advantage for supply chains. There are important decisions to make within the next-generation digital supply chain and the next-generation CX, reimagining CX. And while struggling to deliver value to the business in full proactive CX revolution, there is a real need to consider key smart CX trends which are matching or competitive to an adequate AI strategy, benefitting from new waves of innovation in AI which is continuing to revolutionize CX. Keywords: Next-Generation Supply Chain; Next-Generation Digital Supply Chain; Next-Generation CX; AI; Blockchain; Smart CX trends JEL Classification: L81, L86, M31, Q55

From the Future Value Chain Project to the Next Generation Supply Chain, to AI and Blockchain driving Competitive Advantage for Supply Chains A Deloitte Dbrief webcast from April 26, 2017 revealed that retail revenues were rising every year since 2009 (outperforming GDP). As an interesting (or as a suggestive) coincidence, on the occasion of the ECR Australia Conference 2009, Sabine Ritter, from The Consumer Goods Forum (CGF) and Jim Flannery, from P&G approached the topic “The Future Value Chain Project, Trends, Opportunities And the Industry Response”, underlining among other aspects the need: of adequately treating industry track (collaborate, true collaboration being imperative) and trading partner track (competitive advantage) by identifying new ways of working together, eliminate value chain disruptions, and enable growth (see the figure below); of using the so called “New Capability Model” (supply chain managers needing new capabilities see the next figure below); of considering solutions focused on innovation (necessary to be rapidly applied) within the physical supply chain: in store logistics (in store visibility, shelf ready products, shopper interaction), collaborative physical logistics (shared transport, shared warehouse, review & share infrastructure), reverse logistics (products recycling, packaging recycling, returnable assets), fluctuations management for promotions (joint planning, execution & monitoring), identification/labeling, efficient assets (vehicles/building: alternative energies, efficient/aerodynamic vehicles, switching modes, green building), joint scorecard & business plan, regulatory & environment. (Ritter and Flannery, 2009)

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Figure 1: New ways of working together, eliminate value chain disruptions, and enable growth Source: Ritter, S., Flannery, J. (2009). The Future Value Chain Project, Trends, Opportunities And the Industry Response, ECR Australia Conference 2009 (work cited)

Figure 2: New Capability Model Source: (Adapted from) Ritter, S., Flannery (2009). The Future Value Chain Project, Trends, Opportunities And the Industry Response, ECR Australia Conference 2009 (work cited)

In recent years the reputed Cranfield Centre for Logistics and Supply Chain Management, University of Cranfield, was focused on the â&#x20AC;&#x153;Leadership and Performance

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Behaviours in Next Generation Supply Chain” as shown in the figure below:

Figure 3: Leadership and Performance Behaviours in Next Generation Supply Chains Source: Cranfield Centre for Logistics and Supply Chain Management and EFESO Consulting, Research project, May 2016 - March 2017 (work cited)

On October 2, 2018 we highlighted that according to recent sound research evidence: the complexity of the supply chain has been continuously increased by digital disruptors, evolving customer requirements etc., leadership being challenged to both benefit from new waves of innovation in Artificial Intelligence (AI, born in 1956 and driven today by deep learning and machine-learning techniques, transversing industries and functions, and considerably impacting the work together with automation), Machine Learning (a subset of AI, as it is the case of another AI subset, Natural Language Processing, we will refer to it later on), Internet of Things (IoT) and Blockchain etc., and to responsibly address societal concerns accordingly; there is no doubt that AI will revolutionize customer experience (CX, as the element of engagement that correlates with loyalty, which increases at every level of CX), by improving human marketing decisions and capabilities. (Purcarea, 2018) And all these were expressed after the Academic & Business Partnership 2018 SCM 4 ECR Conference, 18-19 October, Târgovişte, Romania – with the theme “Future Leadership and Artificial Intelligence Drive Value Networks” – which was organized by the SCM-ECR Laboratory, The Faculty of Economic Sciences, Valahia University of Târgovişte (being chaired by Professor Virgil Popa and co-hosted by Ruediger Hagedorn, Director E2E Value Chain & Standards Pillar, The Consumer Goods Forum, CGF – the Global Network Serving Shopper & Consumer Needs), in collaboration with The Consumer Goods Forum’s E2E Value Chain & Standards Pillar, Czestochowa University of Technology(Poland), Romanian-American University (Faculty of Management-Marketing), University Politehnica of Bucharest (Faculty of Transports), and “Vasile Goldiș” Western University of Arad. This successful Conference addressed a number of significant topics centered around the current new challenges – LOGISTICS (Transport and Warehousing);SUPPLY CHAIN MANAGEMENT (Suppliers Relationship Management; Customers Relationship Management; Demand Chain Management; Reverse/Green Logistics; Financial Supply Chain Management; Business Intelligence; Internet of Thinks; Physical Internet; Blockchain; Digitalization; Data Mining, Data warehousing, Big Data, Cloud Information; Robotics and Machine Learning; Digital/Internet Disruption, and Disruptive Innovation; Innovation Strategy; Customer Intelligence; Efficient

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Consumer Response; 4 Customer ERA; Conversational Commerce; Value Chain Management; Omnichannel for Mass customization; Customer Experience and the New Technologies; Customer Engagement; Customer Empowerment); LEADERSHIP (Preparing the Future Leadership for Disruptive Strategy, Blue Ocean Strategy; New Technologies and Vision; Leadership Change; Change Management; The New Education for Future Leaders) – being wellattended. It was a natural evolution of the successful steps that occurred in SCM 4 ECR Conference’s history (1996-2018), also considering the book (introduced by the reputed Ruediger Hagedorn) launched last year by the renowned expert Professor Virgil Popa, the builder of this true brand – Supply Chain Management (SCM) for Efficient Consumer Response (ECR) Conference.

The first day of 2018 SCM 4 ECR Conference was attended by the above mentioned globally recognized Keynote Speaker Ruediger Hagedorn – Director E2E Value Chain & Standards Pillar, The Consumer Goods Forum, Paris – who reconfirmed that strategic design thinking is the next competitive advantage. Another special guest was the reputed Professor of Logistics and Supply Chain Management Michael Bourlakis, Director of Research at the prestigious Cranfield School of Management, Head of Logistics, Procurement and Supply Chain Management, Cranfield University, UK. Both special guests delivered a high-profile talk and revealed their experience, expertise and wisdom. All the above mentioned topics around the current new challenges were approached by other distinguished Keynote Speakers (such as Professors Borna Abramovic, University of Zagreb and Jörn Schlingensiepen, Technische Hochschule Ingolstadt, and Dr. Gerd Wolfram, Founder RFID Implementation METRO Group, CEO and Owner IoT Innovation & Consult I Partner Digital Connection I Author I, Cologne Area, Germany, Management Consulting, and also by other Participants benefitting from digital technology.

Figure 4: The Academic & Business Partnership 2018 SCM 4 ECR Conference Source: Purcarea, T. (2018). A great success of the Academic & Business Partnership 2018 SCM 4 ECR Conference, Romanian Distribution Committee, 23 Oct 2018 (work cited)

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Within the framework of this Academic & Business Partnership 2018 SCM 4 ECR Conference, we concluded that if a year ago, in 2017, we learned that - as Supply Chain 4.0 will affect all areas of SCM - it is necessary to consider key enablers (a clear definition, new capabilities and a supportive environment) in approaching the transformation into a digital supply chain, adopting new technologies, (Alicke et all., 2017) identifying hidden sources of improvements in supply-chain performance, (Karlsson et all., 2017) giving a special attention to the companies’ Omni channel fulfilment’s over time evolution along the make-versus-buy continuum (end-to-end outsourcing, best-of-breed partnerships, in-house management), (Hu and Chopra, 2017) and also better understanding that customer experience (CX) is value (this last idea about CX representing the digital reality no.1), (Viaene, 2017) this year, in 2018, we learned (among other aspects) that: the organization should be reinvented and transformed from both a digital and human perspective, considering leadership and performance behaviours in next generation supply chains (as we have seen above); the organization should better understand the role of the joint search for creating, delivering, and capturing new value, reassembling the value network for business model innovation; (Doorneweert, 2017) how powerful is the impact of AI on the future of retail: personalization, search and chatbots (Natural Language Processing and Machine Learning being the types of AI behind chatbots); (Keyes, 2018) to read and understand the insights extracted by AI is an imperative for marketers; (Kahn, 2018) AI can be used to augment human behavior and improve communication skills; (Feast, 2018) the highest customer service objectives and goals can be achieved by combining the strengths of digital interfaces and humans; (Jonassen, 2018) the best practices revealed the need to focus on horizontal processes, build balanced scorecards, and ensure consistence of leadership and culture, strong planning and network design, and clarity of supply chain excellence. (Supply Chains to Admire – 2018 from Lora Cecere) A few weeks after the 2018 SCM 4 ECR Conference an article drew our attention, posted on CGF site by Scott McLay, Marketing Executive, Sage, (McLay, 2018) who (while approaching the developments of AI, automation and future of work) showed how our lives are already impacted by AI in a meaningful way, both on an individual level (our phones’ personal assistants, personalised newsfeeds, increased banking security etc.), and in the business world (where many processes and fields of work were already transformed by AI), being interesting to see the Sage guide to the benefits of AI and automation for business.

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Figure 5: The benefits of AI and automation for business Source: McIntosh, S. (2018). AI and automation: The benefits for business and industry, Sage, 22 Aug 2018. Retrieved from https://www.sage.com/en-gb/blog/ai-and-automation-business/

As shown by Gartner from the beginning of this year, there is no doubt about the potential of AI (as one of the eight strategic technology trends for supply chain identified by Gartner as driving competitive advantage for supply chains, alongside advanced analytics, IoT, intelligent things, conversational systems, robotic process automation, immersive technologies, and blockchain) to revolutionize supply chain processes and remaking CX. (Pettey, 2018) Within this vision, a few examples of the role of AI in better sensing and shaping demand by a supply chain (the AI-enabled mobile app Olay Skin Advisor, the AI-based platform McCormick FlavorPrint) were offered.

As we have seen above, blockchain is another strategic technology trend driving competitive advantage for supply chains. A recent workshop organized by CGF’s End-to-End Value Chain Pillar and hosted by IBM focused on the so-called “Blockchain Interoperability”, being attended by significant representatives (retailers, suppliers, developers etc.) and approaching a series of best practices. By January 2019, a paper reflecting the outcomes of this workshop (such as: a key role of Application Programming Interfaces, the need of voluntary business rules, the role of the “Business Process 4.0” as enabling technology for new processes etc.) is expected to be finalized. On the other hand, as explained recently by distinguished IBM’s representatives: there is a clear interest of technology consumers (most of them already chosen cloud or blockchain platform) in interoperability, considering their search for freedom of choice with regard to a specific vendor offering and to possibility of changing providers down the road (the highly configurable Hyperledger Fabric, for instance, can be easily upgraded from one

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version to the next); (Ferris, 2018) additional value beyond the capabilities of today’s networks can be unleashed by ensuring the interoperation of blockchain networks (as a “web” of interconnected networks) and solutions on the basis of a “mashup” application including a variety of capabilities defined in data models and smart contracts (a major step forward for the blockchain community being the partnership announcement of Hyperledger and the Enterprise Ethereum Alliance on October 1, 2018). (Cuomo and Murphy, 2018) Four years ago, the global Assessment of Excellence in Procurement Study, Procurement-Powered Business Performance, completed by AT Kearney, pledged for reasserting procurement’s position as a critical driver, starting from the procurement’s use by leaders “to catalyze lasting, superior business performance through excellence in managing categories, suppliers, and teams”. The entire end-to-end process involved in procurement is known as “Source-to-Pay” (S2P), encompassing from spend management, strategic sourcing and vendor management to purchasing, performance management and accounts payable. (SMART by GEP) It shouldn’t come as a surprise within this all above general context that McKinsey’s representatives demonstrated very recently how new levels of performance across the valuecreation lifecycle are delivered by a next-generation procurement operating model for source-topay which capitalizes on advances in digital, data, and analytics, by adequately coordinating multiple capabilities to enable, capture, and sustain value, as shown in the figure below: (Khushalani and Woodcock, 2018)

Figure 6: 2A successful procurement operating model coordinates multiple capabilities to enable, capture, and sustain value Source: Khushalani, S. and Woodcock, E. (2018).A next-generation operating model for source-to-pay, McKinsey & Company, December 2018, Operations (work cited)

The McKinsey’s representatives underlined from the very beginning the extensive recognition of the effective procurement as a source of a competitive advantage.

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The Next-Generation Digital Supply Chain and the Next-Generation CX, Reimagining CX Two years ago, in order to both structure the main Supply Chain 4.0 improvement levers (service, cost, capital, and agility) and to map them to six main value drivers (planning: predictive analytics in demand planning, closed-loop demand and supply planning, automation of knowledge work, advanced profit optimization, scenario planning; physical flow: automation of warehousing, autonomous and smart vehicles, human-machine interfaces, smart logistics planning algorithms, in situ 3-D planning; performance management: automated root cause analyses, digital performance management, online transparency; order management: no-touch order processing, real-time replanning, reliable online order monitoring; collaboration: end-toend/multitier connectivity and supply chain cloud; supply chain strategy: dynamic network configuration and micro-segmentation), it was developed by McKinsey the so-called Digital Supply Chain Compass (see the figure below): (Alicke et all., 2016)

Figure 7: The McKinsey Digital Supply Chain Compass maps Supply Chain 4.0 improvement levers to six main value drivers Source: Alicke, K., Rachor, J. and Seyfert, A. (2016). Supply Chain 4.0 â&#x20AC;&#x201C; the next-generation digital supply chain, McKinsey & Company, October 2016 (work cited)

The McKinseyâ&#x20AC;&#x2122;s representatives showed that the journey of capturing the value can be started immediately and depending on the current supply chainâ&#x20AC;&#x2122;s digital maturity, while avoiding or reducing the sources of digital waste (data capturing and management; integrated process optimization; physical process execution of humans and machines), and ensuring the transformation into a digital supply chain on the basis of the adequate capabilities and environment.

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In March 2018 Bain & Company’s partners attracted the attention on the fact that in order to build a digital supply chain that is fit for the future companies need to take into account that more important than precision are both their flexibility and adaptability to the changing market conditions, turning disruption into opportunity by clarifying from the very beginning not only their necessary supply chain capabilities and the way in which the digital tools can help them to create powerful new business models, but also which will be their initial high-value digital moves. (Israelit et all., 2018) They showed, for example, how retailers can increase supply chain velocity and sales with the help of the digital tools underlining three key initiatives (see the figure below):

Figure 8: Digital tools help retailer increase supply chain velocity and sales Source: Israelit et all., 2018. Build a Digital Supply Chain That Is Fit for the Future, Bain & Company, March 13, 2018. (work cited)

In the same month of March, Kevin Hogan and Kasey Lobaugh, managing directors, Deloitte Digital, Deloitte Consulting LLP and Rob Garf, VP, and Heike Young, manager, industry strategy and insights, Salesforce, highlighted significant aspects from the 2018 Salesforce and Deloitte study entitled “Consumer Experience in the Retail Renaissance” (the survey being conducted online from December 20, 2017-January 5, 2018 with a third party, FocusVision Decipher, and among 561 retail practitioners in Australia/New Zealand, Benelux/Nordics, Canada, France, Germany, Japan, the UK, and the U.S.), such as: (Hogan et all., 2018) there are new opportunities created by the changing marketplace dynamics and within this evolution the consumer experience (understood as the sum of all the consumers’ interactions across touch points) can be rethought by the forward-looking brands which, in order to deliver relevant and personal engagement, are synchronizing consumer data, technology strategies, and experience (which remains overpromised and under delivered; see top consumer experience improvement and investment areas in the figure below); in order to better orchestrate and manage

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their marketing, commerce, and service capabilities brands need to move toward a unified consumer engagement platform, the journey to unified consumer engagement (focused on consumer experiences and interactions on the basis on the full picture of consumer data, not only on the commerce data) including unified commerce (which places CX as first priority by leveraging a single commerce platform, but is focused on inventory and transactions) as a part; AI is considered to be key in the emerging unified technical environment, in order to adequately link product, customer, and transactional data (see in the next figure below how AI is used by brands to personalize CX).

Figure 9: Top consumer experience improvement and investment areas Source: Salesforce and Deloitte, “Consumer Experience in the Retail Renaissance,” 2018, cited by Hogan et all., 2018 (work cited)

Figure 10: How brands currently use AI to personalize the consumer experience Source: Salesforce and Deloitte, “Consumer Experience in the Retail Renaissance,” 2018, cited by Hogan et all., 2018 (work cited)

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According to these representatives of Deloitte and Salesforce, in order to build a unified consumer experience it is imperative for teams across marketing, commerce, and customer service to collaborate, opening this way brands’ opportunity of delivering what matters most within CX on the basis of the adopted unified engagement platform.

Also recently, Mark Asher, Director of Corporate Strategy at Adobe (he was prior a principal consultant at PricewaterhouseCoopers), argued that within the age of digital disruption the in-store experience is made much more personal (while brand outreach is made far more captivating) by the immersive technologies like augmented reality (AR), and that retail is transformed by e-commerce which constitutes a true structural shift, becoming till 2021 the largest world retail channel. (Asher, 2018) He gave a list of very suggestive examples: Nieman Marcus’ Memomi Memory Mirror (which has a built-in screen and camera offering shoppers 360-degree views of outfits etc.); Walmart’s customers’ opportunity of using their iOS devices to scan products on shelves (in order to have both up-to-the-minute pricing and customer reviews); Timberland’s crowd-scale AR game in Madrid (in order to launch its newest hiking boot, the audience being encouraged to enter in the game); Nike’s NikeiD service (using now, after eleven years, an AR experience so as to completely personalize customers’ sneakers); U.K. retailer Very’s weather check at a user’s location (in order to present climate-specific offers on retailer’s website’s home page); online retailer Bonobos’s brick-and-mortar Guideshops offering customers, before ordering online, personally assistance in picking the right size and fit of the wanted clothing; McDonald’s self-order and self-pay kiosks (already for some time); Dunkin’ Donuts’s digital ordering experiences created inside of the vehicles’ incorporated digital touchscreens (also already for some time); Starship’s robotic delivery (being in its early implementation). Asher also pledged for a better understanding of the role of technologies in both amplifying company’s relationship with customers, and creating more traffic, loyalty, and revenue, attracting the attention on the sensitive relation between innovation and CX.

Instead of conclusions: Struggling to deliver value to the business in full proactive CX revolution, let’s consider key smart CX trends which are matching or competitive to AI strategy Very recently, Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA) informed us about the Retail Summit 2019 (see the figure below), a jubilee event (the 25th conference) which will take place on February 4-6, 2019 at Clarion Congress Hotel Prague, this being the largest gathering of retailers and suppliers of consumer goods and services for the Czech and Slovak markets.

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Figure 11: ERA on Retail Summit 2019, February 4-6, 2019 Prague Source: http://www.european-retail-academy.org/

The theme of Retail Summit 2019 is “Customer Experience - From Experience to Enjoyment”, the conference program inviting to useful lessons to learn from the best global and domestic retailers and manufacturers, more than 120 important personalities – beginning with Steven Van Belleghem, author of significant books: “Customers the Day after Tomorrow: How to Attract Customers in a World of AIs, Bots, and Automation”, Lannoo Publishers, March 8, 2018; “When Digital Becomes Human: The Transformation of Customer Relationships”, Kogan Page, April 28, 2015; “The Conversation Company: Boost Your Business through Culture, People and Social Media”, Kogan Page, June 15, 2012; “The Conversation Manager”, Lannoo Publishers, September 16, 2010 – bringing their contribution accordingly. It is interesting to note that the Conference’s main program and the 14 parallel sections will cover significant topics such as: digital transformation, relationships between retailers and manufacturers, creating employee experience, increasing the total value of categories, marketing communication in an Omni channel environment, product innovations, private labels and category management, applying of the latest technology for uplift od CX, optimizing logistics, and sustainability.

As shown also very recently by CX Network, while analyzing the insights from its 2018 Global State of Customer Experience report (which divided the AI journey into seven stages: no plans to start, want to learn more, beginning stages, sourcing vendor information, predeployment, early implementation, and established), AI is a growing priority CX, being key smart CX trends which are complementary or competitive to an AI strategy (including selfservicing model, personalisation, security, block chain and multi-model chat bot). The report revealed that the major hurdles in the way of AI deployments are data privacy and big data management. It is worth underlining that CX Network’s look back at CX in 2018 (Henry, 2018) highlighted among other aspects that: speed, convenience, and knowledgeable service delivered

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in a friendly manner are the essential elements of positive CX; there is plenty of room for both completely seamless Omni channel experience, and a quick and effective solution via social media (this solution being expected by the social media savvy customers within one hour); at the forefront of the CX revolution (with the application of chatbots leading the way) is continuing to be AI. Indeed, there is no doubt about the need for a better supply chain management, harmonizing the digital environment with the in-store environment, benefitting from new waves of innovation in AI which is continuing to revolutionize CX, adequately mixing it with both brand experience and employee experience, and driving evolving customer engagement.

References Alicke, K., Rexhausen, D. and Seyfert, A. (2017). Supply Chain 4.0 in consumer goods, April 2017. Retrieved from https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/supply-chain-4-0-in-consumergoods Alicke, K., Rachor, J. and Seyfert, A. (2016). Supply Chain 4.0 â&#x20AC;&#x201C; the next-generation digital supply chain, McKinsey & Company, October 2016. Retrieved from https://www.mckinsey.com/business-functions/operations/ourinsights/supply-chain-40--the-next-generation-digital-supply-chain Asher, M. (2018). How Digital Technology Enhances Retail Experiences, CMO.com by Adobe, November 14, 2018.

Retrieved from https://www.cmo.com/features/articles/2018/11/8/heres-how-retailers-are-adapting-to-digitaldisruption.html#gs.JF1sd7I Cuomo, J. and Murphy, C. (2018). Network of networks: Enabling the blockchain economy, IBM, December 3, 2018.

Retrieved from https://www.ibm.com/blogs/blockchain/2018/12/network-of-networks-enabling-the-blockchaineconomy/ Doorneweert, B. (2017). Reassembling the value network for business model innovation, March 16. Retrieved from https://valuechaingeneration.com/2017/03/16/reassembling-the-value-network-for-business-model-innovation Feast, J. (2018). The Empathy Economy: Emotional Intelligence in Customer Service, Xconomy, July 5th.Retrieved from https://www.xconomy.com/boston/2018/07/05/the-empathy-economy-emotional-intelligence-in-customerservice/ Ferris, C. (2018). Blockchain interoperability: I do not think it means what you think it means, IBM, October 22, 2018. Retrieved by https://www.ibm.com/blogs/blockchain/2018/10/blockchain-interoperability-i-do-not-think-itmeans-what-you-think-it-means/ Henry, C. (2018). A look back at customer experience in 2018, CX Network, 12/13/2018. Retrieved from https://www.cxnetwork.com/cx-experience/articles/customer-experience-in-2018 Hogan, K., Lobaugh, K., Garf, R. and Young, H. (2018). Retail Renaissance: Redefining the Consumer Experience, Deloitte Digital, Salesforce, March 20, 2018. Retrieved from https://deloitte.wsj.com/cmo/2018/03/20/retailrenaissance-redefining-the-consumer-experience/ Hu, M. and Chopra, S. (2017). Creating an Omnichannel Supply Chain for Branded Manufacturers: The Untapped Potential for Growth, European Business Review, February 28, 2017. Retrieved from http://www.europeanbusinessreview.com/creating-an-omnichannel-supply-chain-for-branded-manufacturersthe-untapped-potential-for-growth/ Israelit, S., Hanbury, P., Mayo, R. and Kwasniok, T. (2018). Build a Digital Supply Chain That Is Fit for the Future, Bain & Company, March 13, 2018. Retrieved from https://www.bain.com/insights/build-a-digital-supply-chainthat-is-fit-for-the-future/

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Jonassen, E. (2018). The impact of AI and the empathy economy on the customer service experience, Customer Experience Update, 28th of August. Retrieved from http://www.customerexperienceupdate.com/edition/weeklycustomer-expectations-nps-2018-08-25?

Kahn, E. (2018). Forget the algorithms, AI is reading your emotions too, Campaign, June 20. Retrieved from https://www.campaignlive.co.uk/article/forget-algorithms-ai-reading-emotions/ Keyes, D. (2018). The Future of Retail 2018: Artificial Intelligence, Business Insider Intelligence, August. Retrieved from bii_futureofretail_artificialintelligence_2018 Khushalani, S. and Woodcock, E. (2018).A next-generation operating model for source-to-pay, McKinsey & Company, December 2018, Operations. Retrieved from A-next-generation-operating-model-for-source-to-pay.pdf McLay, S. (2018). AI and the Industrial Revolution Taking Place Right Now, CGF, 27 November 2018. Retrieved from https://www.theconsumergoodsforum.com/ai-and-the-industrial-revolution-taking-place-right-now/ Pettey, C. (2018). Gartner Top 8 Supply Chain Technology Trends for 2018, Gartner, February 27, 2018. Retrieved from https://www.gartner.com/smarterwithgartner/gartner-top-8-supply-chain-technology-trends-for-2018/ Purcarea, T. (2018). A great success of the Academic & Business Partnership 2018 SCM 4 ECR Conference, Romanian Distribution Committee, 23 Oct 2018. Retrieved from http://www.crd-aida.ro/2018/10/a-great-successof-the-academic-business-partnership-2018-scm-4-ecr-conference/ Ritter, S., Flannery, J. (2009). The Future Value Chain Project, Trends, Opportunities And the Industry Response, ECR Australia Conference 2009. Retrieved from https://www.gs1nz.org/files/1413/7160/1530/Future_of_Supply_Chains_2010.pdf Viaene, S. (2017). Digital Reality No.1: Customer Experience is Value, September 7, 2017. Retrieved from http://www.europeanbusinessreview.com/digital-reality-no-1-customer-experience-is-value/ *** “The Great Retail Bifurcation: An Industry Divided,” Deloitte Dbrief webcast, April 26, 2017, cited by Hogan, K., Lobaugh, K., Garf, R. and Young, H. (2018). Retail Renaissance: Redefining the Consumer Experience, Deloitte Digital, Salesforce, March 20, 2018 *** Cranfield Centre for Logistics and Supply Chain Management and EFESO Consulting, Research project, May 2016 - March 2017, Principle Investigator, Co-Investigator: Professor Richard Wilding (PI), OBE; Dr. Farooq Habib (Co-I). Retrieved from https://www.cranfield.ac.uk/som/research-projects/leadership-and-performancebehaviours-in-next-generation-supply-chains *** Supply Chains to Admire – 2018 from Lora Cecere (The Supply Chains to Admire™ analysis is an annual study of supply chain excellence). Retrieved from : http://supplychaininsights.com/portfolio/supply-chains-to-admire-2018/ *** CGF End-to-End Value Chain Pillar Organises Second Spring Board Workshop, CGF, 27 September 2018. Retrieved from https://www.theconsumergoodsforum.com/news_updates/cgf-end-to-end-value-chainpillar-organises-second-springboard-workshop/ *** Assessment of Excellence in Procurement Study, 2014, Procurement-Powered Business Performance, AT Kearney. Retrieved from https://www.atkearney.com/documents/20152/587529/Assessment+of+Excellence+in+Procurement+Study.pdf/ *** https://www.smartbygep.com/insight/procurement-glossary/source-to-pay *** Retail Summit 2019 Reveals Its Program, Blue Events, 01.11.2018. Retrieved from http://www.blueevents.eu/en/news/305-retail-summit-2019-reveals-its-program? *** https://www.cxnetwork.com/about-us *** Artificial intelligence: Genuine experience, CX Network, 12/14/2018. Retrieved from https://www.cxnetwork.com/cx-digital/articles/artificial-intelligence-in-cx#carouselControls

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Hall of Fame 2019: Nobel Peace Laureate 2007 Prof. Dr. Raekwon Chung, Technology Partners, Department Stores Japan, Business Logistics in Modern Management, Chang Chun: AI in 2030, and Central Eastern Europe Bernd HALLIER

Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA: http://www.european-retailacademy.org/), an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of “Romanian Distribution Committee Magazine” (he is also Honorary Member of the Romanian Scientific Society of Management - SSMAR) attracted our attention on great events happening in the fourth quarter 2018, and allowed us to present them. It is also worth remembering that: immediately after visiting Romania for the first time on the occasion of the 24th International Congress of the International Association for the Distributive Trade (AIDA Brussels), Prof. Dr. Bernd Hallier sent us, in May 2008, a memorable letter we have referred initially in the Journal of the Romanian Marketing Association (AROMAR), no. 5/1998, and also later, in 2010, in the first issue of the Romanian Distribution Committee Magazine; the Romanian-American University has awarded Prof. Dr. Bernd Hallier a “Diploma of Special Academic Merit”; the “Carol Davila” University of Medicine and Pharmacy, Bucharest, has awarded Prof. Dr. Bernd Hallier a “Diploma of Excellence”.

Hall of Fame 2019: Prof. Dr. Raekwon Chung, Nobel Peace Laureate 2007 It is well-known that the European Retail Academy (ERA) decided in 2006 to honor each year one outstanding personality, who beside his/her works as a researcher contributes also by building bridges between theory and applied sciences or via social or cross-border activities. For 2019 ERA President Prof. Dr. Bernd Hallier announced the appointement of Prof. Dr. Raekwon Chung, Nobel Peace Laureate 2007, from Korea: “The nomination of Professor Chung is a

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support for a Global House of Harmony based on the integration of Economics, Ecology and Ethicsâ&#x20AC;? Professor Hallier stated (Hall of Fame).

Prof. Dr. Raekwon Chung, Nobel Peace Laureate 2007 and ERA President, Prof. Dr. Bernd Hallier

Technology Partners Four years ago, in China, the Zhongguancun Industry and Information Research Institute of Two-Dimensional Code Technology (ZIIOT) was founded in Beijing. ZIIOT has been recognized in 2018 by the International Organization for Standardization (ISO), the European Committee for Standardization (CEN) and the Advancing Identification Matters (AIM GLOBAL). A Unified Two-Dimensional Code Registration Management Center (UTC Global) was established in Beijing, China, where currently UTC China, UTC Korea, UTC India and UTC Canada are coordinating their global activities.

Dr. Chao Zhang, President of ZIIOT, and Prof. Dr. Bernd Hallier signed a MOU for cooperation. Prof. Dr. Bernd Hallier appointed Dr. Chao Zhang to be a member in the ERA Board of Trustees. ZIIOT will be the Chinese Umbrella Organization for the Thematic University Network (Food).

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Department Stores Japan Taken the top 10 department store companies in Asia/Pacific Japan is represented by six companies, Korea by three and Australia by one company. The World Department Store Forum will hold its 6th Meeting in Tokyo/Japan in this inspiring environment with the challenging topic “Department Stores' Future in a Megacity” (more Email).

The latest investments in Tokyo under way are from the two Japanese players Mitsukoshi and Takashimaya which both enlarge their stores in the highly frequented Nihonbashi district.

Business Logistics in Modern Management In Romania the Academic & Business Partnership organized in Târgovişte its 2018 SCM 4 ECR Conference with the theme “Future Leadership and Artificial Intelligence drive Value Networks”. More by Prof. Dr. Theodor Purcarea: http://holisticmarketingmanagement.ro/continuous-improvement-journey-of-the-academic-

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business-partnership-2018-scm-4-ecr-conference/ ; http://www.crd-aida.ro/2018/10/a-greatsuccess-of-the-academic-business-partnership-2018-scm-4-ecr-conference/ .

In Osijek, Croatia, the 18th International Scientific Conference “Business Logistics in Modern Management” was organized. 98 authors from 10 European countries and 49 reviewers contributed to the proceedings, which also have been published in a Reader (see photo). Prof. Dr. Bernd Hallier has been member of the Honorary Program Committee. More by Prof. Dr. Davor Dujak (Email).

Chang Chun: AI in 2030 The Chinese President Xi Jinping is aiming to bring his country to the top position as a global innovation center for Artificial Intelligence (AI) in 2030. In Chang Chun, North East China, an International Two-dimensional Code Industry Development Summit was organized to explore innovation opportunities for the commodity circulation.

Prof. Dr. Bernd Hallier was invited to attend as a key-note speaker with the topic of “retail/wholesale as an innovation driver”. For Professor Hallier the Two Dimensions Code are “the new rails of the Silk Road 2030”.

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Central Eastern Europe ERA President Prof. Dr. Bernd Hallier and Prof. Dr. Siniša Zarić, (Zagreb, Croatia) discussed the history of the former Habsburg Empire and the Danubian Principalities Wallachia and Moldovia on one hand, and the Balkan Zone of the former Osman Empire on the other, and its conflicts during the two World Wars, the Iron Curtain and the split of the former Republic of Yugoslavia.

Both ERA-professors agreed on the importance of political, economic and social activities beyond old and new borders and an optimization of penetration of knowledge about the past, today’s situation and its potential for future generations. Both want to promote university contacts and Conferences within Central Eastern Europe.

Prof. Dr. Siniša Zarić and Prof. Dr. Bernd Hallier

It is our honor and pleasure to remember the 2011 working meeting of the European Retail Academy in Köln, Germany.

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In memoriam: Mrs. Jacqueline Wegnez-Jacobs RDCM and HMM

It is well-known that Prof. Dr. h. c. Léon F. Wegnez, an Honorary Member of the Romanian Distribution Committee, is a distinguished Member of the Editorial Board of “Romanian Distribution Committee Magazine” (RDCM) and also of the Editorial Board of “Holistic Marketing Management” Journal (HMM) of the reputed Romanian-American University.

Prof. Dr. h. c. Léon F. Wegnez was honored by the European Retail Academy (ERA) as the 2015 “Man of the Year” (the distinguished personalities who have been honored by ERA in the last six years were: Philip Alexander Nobel, John L. Stanton, Léon F. Wegnez, Romano Prodi, Klaus Toepfer, and Robert Aumann). Léon F. WEGNEZ is a well-known personality with a vision and commitment, knowing what to do with the time and having the power to give his life a meaning, with a real vocation for spreading knowledge about the distributive trade, pledging for the right decisions, the right choices and the progress of business life, through a better understanding of consumer value and consumer journey.

Prof. Dr. h. c. Léon F. Wegnez understood the nature and role of diplomacy (as an intellectual activity based on the on-going processing and analysis of information) in meeting the demands posed by globalization and adapting to the new requirements and challenges, highlighting the importance of the relationship between imparting knowledge (which can be applied to decision-making) and developing skills so as to transpose the list of obstacles to diplomatic communication. He constantly pledged for networking and team-working in building a collaborative environment leading to the creation of adequate knowledge, by understanding the political context which frames diplomacy (including economic diplomacy, cultural diplomacy, public diplomacy, digital diplomacy and so on) into a competitive context, by sharing values, by respecting and valuing differences, by engaging and educating.

A remarkable contribution to the redoubtable efficiency of Prof. Dr. h.c. Léon F. Wegnez many functions it has always been made by his distinguished wife Mrs. Jacqueline Wegnez-Jacobs.

In July this year we have learnt with a great emotion and profound sadness about the passing away of Mrs. Jacqueline Wegnez-Jacobs (2.6.1938 – 13.7.2018). Her memory we shall always keep.

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Hommage à Madame Jacqueline Wegnez Très triste nouvelle: Madame Jacqueline Wegnez nous a quittés vendredi soir 15 Juillet 2018

C’est avec une profonde tristesse que nous avons appris que Madame Jacqueline Wegnez nous a quittés samedi soir.

Nous rendrons hommage à Madame Jacqueline dont la jeunesse du coeur et la beauté de l’âme à 80 ans ont été célébrés le 2 juin 2018 par toute la Famille Wegnez.

Madame Jacqueline Wegnez a été une Mère et Grand-mère dévouée, et ce 12 juillet Jacqueline et Léon ont fêté 57 années de marriage – en harmonie, respect, pureté, sérénité – qui ont confirmé pleinement les mots sages d’un des maîtres du romantisme français et européen: “Le mariage est un consentement, donation mutuelle des cœurs” (Jules Michelet).

Madame Jacqueline Wegnez a apporté toujours une contribution remarquable à l’efficacité redoubtable des nombreuses fonctions de son mari Léon Wegnez, dans le cadre du Club Diplomatique de Belgique, du Comité Royal Belge de la Distribution ou de l’AIDA. Nous garderons de Madame Jacqueline Wegnez, toujours une vraie preuve d’une grande générosité, un souvenir éternel.

Source: http://www.crd-aida.ro/2018/07/tres-triste-nouvelle-madame-jacqueline-wegnez-nous-a-quittes-samedi-soir/

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A Remembrance of Mrs. Jacqueline Wegnez-Jacobs

It is with a great emotion and profound sadness that we have learnt about the passing away of much admired Mrs. Jacqueline Wegnez-Jacobs (2.6.1938 – 13.7.2018).

The funeral was held at Verviers on July 19, 2018.

Mrs. Jacqueline Wegnez-Jacobs has always made a remarkable contribution to the redoubtable efficiency of her husband’s Prof. Dr. h.c. Léon F. Wegnez many functions such as: Administrator Secretary General of the Diplomatic Club of Belgium, and Co-Founder of the Diplomatique Gazette, Brussels; General Manager, Royal Belgian Committee for Distribution; Member of France’s Academy of Commercial Sciences; General Manager, International Association of Urbanism & Commerce; Administrator & Director, Association for Prevention & Safety; Secretary General, International Association of the Distributive Trade, A.I.D.A. Brussels.

We will always remember the special memories that we are privileged to have in knowing the distinguished Mrs. Jacqueline Wegnez-Jacobs. Her memory we shall always keep.

Our condolences go out to Prof. Dr. h.c. Léon F. Wegnez and his Family at this sad time.

Source: http://holisticmarketingmanagement.ro/a-remembrance-of-mrs-jacqueline-wegnez-jacobs/

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It is well-known what it was underlined in 1996 by the “Position Paper, Chapter16: SME” (http://www.mie.ro / Negocieri/Romana /Documente_ pozitieRom/CAP16-DP) at Point 3 – “Capacity to implement the acquis communautaire… • In the field of commerce and distribution, in 1996, the Romanian Distribution Committee was established as a legal association, affiliated to the International Association for the Distributive Trade”.

A year later, in March 1997, we received Thanks (Letter) from Riccardo Garosci, the European Rapporteur for the “Green Book on Commerce” prepared by the European Commission, for the “contribution to the professional development of European Commerce”; a year later, in May 1998, Riccardo Garosci, Vice President of Economic and Monetary Commission of the European Parliament, European Rapporteur for „Green Book for European Commerce”, and President of the “Commerce and Distribution” Intergroup of the European Parliament, opened the works of the 24th International Congress of A.I.D.A. Brussels, organized in Bucharest, at Athénée Palace Hilton.

And the next year, in 1999, reference was made to the Romanian Distribution Committee in the study “Marketing issues in transitional economies”, Springer, 1st edition, August 31, 1999, Rajeev Batra, William Davidson Institute (at the University of Michigan, USA), Business & Economics, page 167, for acknowledging the specific Romanian undertakings of adapting to European and world economic structures.

It is our honor and pleasure to share with our Readers our respect for towering figures in the history of the Romanian Distribution Committee, recognized as leading voices about professional matters, with a true passion for trade and development, showing dedication and genuine commitment, making us working with them by better understanding different perspectives, always being tenacious and focused but also the nicest person in the room, and always proving having the art of understanding another person, making all of us think we could do something smarter and faster, relying on coopetitive alliance.

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Dr. Nicolae STAN, un profesionist desăvârşit, întotdeauna elegant, disponibil, volubil şi cu simţul umorului Cel care avea să devină membru în primul Colegiu de Conducere al Camerei de Comerţ și Industrie a României si a Municipiului Bucuresti (16-17 iulie 1990, alături de alte 10 cunoscute personalităţi ca: Aurel Ghibuţiu, Aurel Vainer, George Cojocaru, Alexandru Zamfir ş.a.), apoi membru fondator (1996) şi de onoare (1998) al Comitetului Român al Distribuţiei, s-a născut la data de 26 noiembrie 1936 în comuna Poienarii Burchii din județul Prahova, localitate atestată documentar încă de pe vremea începutului Domniei lui Mihai Viteazul şi aflată la vărsarea Cricovului Dulce (ca afluent) în râul Ialomița.

Nicolae Stan şi-a făcut studiile liceale în Ploieşti şi Bucureşti, urmând apoi cursurile Facultăţii de Comerţ, Secţia Merceologie industrială, din cadrul Academiei de Studii Economice din Bucureşti (ASE), pe care le-a absolvit în anul 1963, atunci când a şi fost angajat, în baza repartiţiei guvernamentale, la Întreprinderea Comerţului cu Ridicata de Textile-Încălţăminte (ICRTI) Bucureşti. Aici a parcurs toate treptele profesionale (Economist, Economist Principal, Şef Serviciu, Director Adjunct şi Director General), ieşind la pensie în anul 1999.

Economistul Nicolae Stan a obţinut titlul ştiintific de Doctor în economie în anul 1980, avându-l Conducător ştiintific pe reputatul Prof. univ. dr. ing Iosif Ionescu-Muscel. De altfel, distinsul Profesor Beniamin Cotigaru, membru de onoare al Comitetului Român al Distribuţiei şi fost asistent, precum şi cel mai apropiat colaborator al Profesorului Ionescu-Muscel (sunt celebre multe cărţi, începând, de ex., cu volumele din seria “Elemente de merceologie”, Editura Ştiinţifică, Bucureşti, 1956-1964, Autori: I. Ionescu-Muscel şi B. Cotigaru), îşi aducea aminte cu plăcere de fostul student.

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Tema tezei de doctorat a fost “Creşterea calităţii si efectele economice decurse prin introducerea chimizării şi termosudării în procesul confecţionării îmbrăcămintei”. În anul 1991 Dr. Nicolae Stan a fost ales şi Preşedinte al Organizaţiei Patronale de Ramură din Comerţul de Gros Textile-Încălţăminte “TEXTIN” (înfiinţată prin Sentinţa Civilă nr.

751/23 decembrie 1991). În această calitate a participat în luna mai 1996 şi la şedinta de constituire a Comitetului Român al Distribuţiei, alături de alte distinse personalităţi ca: Prof. univ. dr. Iacob Cătoiu, Dr. Aurel Vainer, Dr. Valeriu Ioan-Franc, Dr. Constantin Tudose, Dr. Ana Lucia Ristea, Jose Iacobescu, Dr. Dima Lupu, Dr. Constantin Boştină, Dr. Constantin Păunescu, Dr. Virgil Popa, Nicolaie Mihăiescu, Alexandru Oprea, Gheorghe Caracăleanu, Octavian Juncu, Victor Sima, Nicolae Gălăşanu, Aurel Popescu, Viorel Zechil, Corneliu Verşescu, Stefan Chelariu, Gheorghe Guran, Mircea Angelescu, Cristiana Bărbătescu, Ilie Ion, Marius Tudor ş.a.

Nicolae Stan a trecut la cele veşnice pe data de 27 iulie 2002.

Profesionist desăvârşit, întotdeauna elegant, disponibil, volubil şi cu simţul umorului, Dr. Nicolae Stan va rămâne mereu în memoria noastră!

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Vice president of RDC Nicolaie MIHĂIESCU: The essence of teaching professionalism, always thinking about “architecture” and balancing thought and action

Nicolaie Mihăiescu este un om de o remarcabilă ţinută morală şi profesională. Născut în comuna Budeşti din judeţul Vrancea la data de 5 ianuarie 1942, Nicolaie Mihăiescu a absolvit Acdemia de Studii Economice din Bucureşti, Facultatea de Comerţ, Secţia Economia Comerţului Interior, în anul 1964, începând activitatea ca economist şi apoi economist principal la ICRM Bucureşti. A fost apoi economist principal şi Şef de serviciu la ICE Mercur Bucureşti, Reprezentant comercial la Agenţia economică de pe lângă Ambasada României de la Beijing, după care a revenit la ICE Mercur şi ICRM Bucureşti, devenind ulterior Director general al S.C. Comet S.A. (fosta ICRM Bucureşti) la începutul anilor nouăzeci, fiind ales şi Preşedinte (19922001) al Organizaţiei Patronale de Ramură din Comerţul de Gros Metalo-Chimice “Metacom” (înfiinţată prin Sentinta Civila nr. 634/1 noiembrie 1991). Totodată, în perioada 1995-2001, a

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fost şi Vicepreşedinte al Organizaţiei naţionale patronale din comerţ. Preocupat permanent de învăţarea continuă, Nicolaie Mihăiescu a urmat numeroase cursuri de perfecţionare în comerţul exterior şi interior (inclusiv, de ex., cele organizate de Departamentul Comerţului din SUA). În perioada 1992-2008 Nicolaie Mihăiescu a fost şi membru al Colegiilor Camerei de Comerţ si Industrie a Romaniei (CCIR), membru al Comitetului executiv al CCIR, precum şi membru al Colegiului Camerei de Comerţ şi Industrie a Municipiului Bucureşti (CCIMB).

Domnia Sa a pledat în mod constant pentru o instituţie camerală reprezentativă mai puternică, mai incisivă în dialogul cu guvernul şi mai aproape de năzuinţele operatorilor economici (considerând “Camera” ca “una dintre puţinele întâmplări fericite ale prelungitei perioade de tranziţie pe care trebuie să o suporte mediul economic românesc”).

Nicolaie Mihăiescu a desfăşurat şi o bogată activitate publicistică. In perioada 2002-2008 a fost membru în Colegiul de redacţie al “Revistei de Comerţ (Tribuna Economică), fiind autorul a peste 40 articole. Timpul a confirmat pasiunea lui Nicolaie Mihăiescu pentru problematica comerţului nostru atât de încercat, Domnia Sa rămânand un purtător consecvent de mesaj competent. În decembrie 2002, de ex., în contextul unei analize privind Legea pentru modificarea, completarea si aprobarea Ordonantei 99/2000, preciza că pe de o parte, “lipsa unor reglementări în materie de comerţ a generat pagube ireparabile pentru economia românească, ca şi pentru societate în general”, iar pe de altă parte, “în comerţul nereglementat şi nemonitorizat nici legal nici de către societatea civilă s-au creat capitalurile puse la adăpost în economia subterană care au contribuit la apariţia unei clase de îmbogăţiti peste noapte, la polarizarea

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sălbatică a societăţii în foarte bogaţi şi foarte săraci şi au împiedicat apariţia şi consolidarea clasei de mijloc… Banii negri din comerţ au constituit sursa principală de finanţare a achiziţiilor în procesul de privatizare iar depozitarea în subsolul nevăzut al economiei subterane a acestor bani a condus la slăbirea bugetului statului ştiut fiind că imensele profituri din acest gen de comerţ nu au fost niciodată impozitate”.

De asemenea, după 6 ani de la apariţia Cărţii Verzi a Comerţului European (elaborată de Comisia Europeană), Nicolaie Mihăiescu atrăgea atenţia că - desi documentul în cauză a fost tradus operativ în limba română (prin eforturile Comitetului Român al Distribuţiei şi ale Centrului de Informare şi Documentare Economică, INCE, Academia Română) - acest document continuă să rămână puţin cunoscut şi nici nu este invocat atunci când se au în vedere perspectivele comerţului românesc. După cum tot Domnia Sa făcea trimitere şi la setul de legi din Codul lui Hammurabi (legi si edicte gravate pe un bloc masiv din piatră neagră de diorite, monument descoperit de arheologi pe teritoriul irakian în 1901 şi aflat, după restaurare, la celebrul muzeu Louvre din Paris), punctând, printre altele, că acestea: conţin şi primele principii ale asigurărilor în activităţile comerciale şi alte activităţi economice expuse la riscuri; stipulează principii de despagubire a comercianţilor pentru mărfurile pierdute în timpul voiajului de la furnizor, prin acţiunea unor factori naturali sau datorate furturilor… Ca apoi să precizeze (Nicolaie Mihăiescu) că apariţia unei legi dă naştere unui sentiment de uşurare: “Autorii sunt mulţumiţi că oferă un instrument de lucru, cei vizaţi de lege sunt jumătate satisfăcuţi, jumătate frustraţi, persoanele împuternicite să verifice aplicarea legii sunt preocupate, iar publicul larg rămâne nepăsător până la momentul când este în situaţia de a suferi rigorile respectivei reglementări. Dură sau nu, legea e lege… În fine, al şaptelea păcat în legătură cu legea este că ea ori nu se aplică ori se aplică strâmb, uneori paradoxal, chiar de către cei care au conceput-o”…

Nicolaie Mihăiescu nu a uitat să abordeze nici implantările de mari magazine, “care au beneficiat de clemenţa inexplicabilă a autorităţilor pentru a plasa unităţi în centrele oraşelor, încălcând principii urbanistice de bază pe care în ţările de origine nici măcar nu le-ar fi putut propune (admiţând contribuţia hotărâtoare a marile structuri multinaţionale la creşterea gradului de civilizaţie în comerţul românesc, pusă însă “în antiteză cu consecinţele în plan economic, al forţei de muncă, al balanţei de plăţi externe”). Lipsa de date corecte în privinţa cererii solvabile şi vânzărilor în retailul românesc – atrăgea atenţia Nicolaie Mihăiescu – duce la concluzii bizare dacă se iau în calcul cifrele de afaceri din comerţ aşa cum rezultă din anuarele statistice şi realitatea cotidiană. În vara anului 2007 Nicolaie Mihăiescu nu a neglijat nici problematica alocării, absorbţiei şi utilizării fondurilor structurale europene (“sursa cea mai generoasă de fonduri care pot ajuta la dezvoltarea nu numai a unor IMM-uri dar şi a economiei româneşti în ansamblu”; “continuă sa fie o problemă gradul de cunoaştere a paşilor ce trebuie făcuţi pentru a accesa aceste fonduri”) ca fiind de importanţă primordială pentru dezvoltarea economică a României, fondurile trebuind să fie gestionate eficient. Domnia Sa insista pe o cât mai bună cunoaştere a reglementărilor de ordin general din Ununea Europeană, Piaţa Unică şi desigur a celor specifice comerţului.

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Membru fondator (1996) şi de onoare (1998) al Comitetului Român al Distribuţiei Nicolaie Mihăiescu a fost o prezenţă activă încă de la primul Seminar Naţional organizat la Casa Academiei Române, Bucureşti, în octombrie 1996, de Comitetul Român al Distribuţiei (în relaţie de parteneriat cu Centrul Român de Comerţ Exterior), seminar având ca temă “Distribuţia mărfurilor în România în contextul integrării în Uniunea Europeană”, (a se vedea “Adevărul Economic” nr. 47(245)/22-28.XI.1996, revista AROMAR “Marketing- Management” nr.6/1996 şi “Monitorul Comerţului Românesc” nr. 6/1996).

Nicolaie Mihăiescu este desigur şi în prezent membru al Colegiului de redacţie al “Romanian Distribution Committee Magazine”, articolele publicate în revista Comitetului Român al Distribuţiei bucurându-se, de asemenea, de un real succes (“Friends or false friends”: http://crd-aida.ro/RePEc/rdc/v1i2/10.pdf ; “Penalties National Championships”: http://crdaida.ro/RePEc/rdc/v2i3/7.pdf ; “What is this?”: http://crd-aida.ro/RePEc/rdc/v2i3/4.pdf ;

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“MIC.Ro end of the road ?”: http://crd-aida.ro/RePEc/rdc/v3i1/6.pdf ; “Where to repair my plane…”: http://crd-aida.ro/RePEc/rdc/v4i1/4.pdf ; “Still I can repair my plane”: http://crdaida.ro/RePEc/rdc/v4i2/5.pdf ; “It happens in Romania too”: http://crdaida.ro/RePEc/rdc/v4i3/4.pdf ; “Consumer Protection. A Point of View”: http://crdaida.ro/RePEc/rdc/v5i2/4.pdf ; “I hate statistics”: http://crd-aida.ro/RePEc/rdc/v7i2/5.pdf ).

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