Benefits of AI, Global Manufacturing.

1
George Benaroya
World Emerging Industries Summit
AI, Global Manufacturing Benefits

2
George Benaroya
About me. George Benaroya
 Career at Procter & Gamble, Tetra Pak and
Beiersdorf Nivea as Vice President Finance,
Global Controller & CFO.
Half of career at Headquarters and ½ running
local operations ($20 Mio to $ 2 Billion) in Asia,
Europe, Latin America and the US.
 Visited clients, consumers and factories in 190 countries to
enable profitable growth, powered by Finance
Contact: https://www.linkedin.com/in/georgebenaroyacfo/

3
George Benaroya
How AI reduces inventory by 50%
 One of our warehouses in China has 150,000 skus.
 “Average” is not a good way to manage inventory.
 We reduced inventory by 20% by looking at each
transaction over 2 years, and deploying the 5
Whys methodology to reduce forecasting errors,
and improve the stock replenishment process.
 Mc Kinsey estimates AI can reduce inventory by
50%, out-of-stocks by 65%, and forecasting errors
by 50%.
Walmart reduced inventory taking
from 1 month to 1 day
by using drones

AGENDA
Agenda
1. Will controllers lose their job to AI?
2. What can automation and AI do?
3. The limits of AI, and the solution
4. How the US & China will benefit from
cooperation on AI

5
George Benaroya
Cost reduced from 1.2% to 0.7% of NS, 0.5% Long TermFinance headcount was reduced by 40% the last 7 years
214
129
2010 2017
Will Accountants lose their jobs to AI?
By function 2010 2017 Change
AP,AR, T&E, Payroll1 91 45 -50%
Financial Accounting
2
80 38 -52%
Tax & Treasury 3 23 16 -29%
Analysis & IT 4 21 29 43%
Risk, Audit & Other 5 15 16 5%
Finance 214 129 -40%
1-Accounts Payable, Accounts Receivable, Payroll, Travel & Entert
2-External & Internal Reporting, Financial Accounting, Cost
3-Includes Investor Relations
4-Forecasting, Budgeting, & Planning, Business Analysis, Financial Systems, IT
5- Includes projects and management
Finance Headcount
2010 - 2017
Global Firms - $10 Billion Sales
-40%
FTE
FTE
Source

6
George Benaroya
Cost reduced from 1.2% to 0.7% of NS, 0.5% Long TermWhile headcount was reduced 40%, Finance cost remains unchanged
Did Finance cost decrease by 40% the last 7 years?
1.8%
1.9% 1.9% 1.8% 1.7% 1.6% 1.6% 1.6%
10 11 12 13 14 15 16 17
Financecost%0fSales
Year
Finance Cost as % Sales
2010 - 2017
Global Firms - $10 Billion Sales
Source

7
George Benaroya
240
200
28
Facebook Google Amazon
Median Pay ‘17
84 100
2010 2017
Total Finance ’10 to ‘17
Technology sector
compensation tends to be
higher driven by limited supply
of skilled resources (engineers)
Analytical jobs pay over 2X as
much as data processing ones
Headcount was replaced with
automation for data processing,
lower paid jobs. An increase in
Analytical resources rose overall
median cost
52
80
125
AP,AR, T&E,
Payroll
Financial
Accounting
Analysis &
IT
2017 Finance functions
Pay per head in ‘000 dollars
Change in skills increased pay per head 20%
+20%
+2X
Cost reduced from 1.2% to 0.7% of NS, 0.5% Long Term“Service” jobs in manufacturing are better paid

8
AGENDA
Agenda
1. Will controllers lose their job to AI and
will the US trade deficit worsen?

9
George Benaroya
Machine Translation grows Exports by 17.5%
When I first arrived to St. Petesburg’s train station in Russia, the
alphabet was a challenge. Today, I can read any document in Russian
by scanning a picture to Google translate.
Alibaba translates 200 Billion words per day in 16 languages.
Alibaba & Home Depot in the US enable 1 million small businesses
to sell globally.
Ebay’s machine translation service has increased exports by 17.5%.
Machine Translation enables customers in Europe to save 50% on
purchases, 55% for Linkedin subscriptions.

10
George Benaroya
Manufacturing cost of a product. Reduced by half by AI
62%
11%
27%
Raw & Pack Direct labor Fixed Cost
Raw & Pack
 Global sourcing
 Waste. 30% improvement:*
image recognition, root-
cause analysis
 Inventory. 50% reduction:*
better forecasting, data
management
Fixed Cost
 Capacity utilization:
50% improvement in
Demand Forecasting.*
Data on launches,
media, real-time sales.
Direct labor
 Productivity: 30% of
Support functions
automated*.
Intelligence, the Artificial one, makes better decisions at:
*Source: Mc Kinsey; Range of
deployed solutions
Typical cost of a product

11
George Benaroya
AI improves the “Where to manufacture” decision process
Intelligence, including Artificial, will lessen the
effect of bias such as:
 “I got to have a plant in my country”
 Market growth expectations
 Perceived quality assumptions
by analysing large amounts of data to:
1. Populate 400 KPIs for decision making
2. Constantly adjust for foreign exchange and
political risks updates (China-US trade
discussions, Brexit)
$100
$11
30
Investment Labor cost/
year
Units
produced/year
Manufacturing Plant
Millions
 Typical investment $100 Million
 10 year project

12
George Benaroya
Pricing. Where AI provide the highest ROI
1. Multiple data sources.
Systems are not integrated
2. For B2B, 50% changes in
foreign exchange, raw
materials are an opportunity
3. Abundance of data, list
prices and discounts
1. Any data, from anywhere
2. AI will not predict
exchange rates. AI will
accelerate the conversion
of data into information
3. By mastering complexity,
deployed AI solutions have
increased profitability by
one third

13
AGENDA
Agenda
cooperation on AI

14
George Benaroya
Automation accelerates data errors

15
George Benaroya

16
George Benaroya

17
George Benaroya
The limits of AI, and the Solution
1. AI will displace 400 Million
jobs by 2030
2. AI will makes errors
3. AI won’t be able to
manage exemptions
1. 800 Million jobs will be
created
2. By having humans
devoted to quickly solve
them, users won’t notice
3. Humans, through
Empathy and brain power,
will solve new problems.
Faster

18
AGENDA
Agenda
cooperation on AI

19
George Benaroya
Exports quadrupled. Through Service jobs, paying 25% more
17 13
'98 '18
Manufacturing
103
129
'98 '18
Service
271
798
'99 '17
US to World
2017 Exports: $798; Imports $542
Service Exports (Billion $)
Source: Federal Reserve
Jobs (Millions)
4
58
'99 '17
US to China
Cost reduced from 1.2% to 0.7% of NS, 0.5% Long TermIn the US, Service Exports have grown 4X globally, 14X to China
Service jobs pay 25% more than
Manufacturing ones ($27 vs. $21 hr.)
2017 Exports: $58; Imports $17

20
George Benaroya
US China cooperation. Benefits for Artificial Intelligence
Data
Human
Resources
Investment
STEM graduates: China 4.6 M, US
0.6M
Global reach of US Universities
(50% STEM students foreign born);
Silicon Valley
Global market share of US firms:
Facebook, Google
China’s production volume is 3X bigger than
the US
US consumers are brand conscious
interacting in a highly competitive market
Together, this data will enable companies to
make better production & pricing decisions
China ($4.9B) & the US
($4.4B) invest more in AI
than any other nation
Ensure sustainable
profitable growth

21
Summary
1.AI improves decision processes such as “Where to
manufacture”, grows Exports by 17%, and can reduce
inventory and manufacturing cost by up to a half.
2.Finance Headcount has been reduced. AI will displace 400
million jobs by 2030.
3.AI has limits. 800 million jobs will be created to manage
exemptions. Humans are faster and better at it.
4. China & the US will benefit by combining their
complementary resources
Artificial Intelligence, Global Manufacturing benefits:

Benefits of AI, Global Manufacturing.

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Benefits of AI, Global Manufacturing.

Similar to Benefits of AI, Global Manufacturing. (20)

More from George Benaroya

More from George Benaroya (13)

Recently uploaded

Recently uploaded (20)

Benefits of AI, Global Manufacturing.

Editor's Notes