May 28, 2007

This article contains a short story with a moral at the end.

Zim Integrated Shipping Services is one of the 20 largest shipping services in the world. The business was originally government owned and took great pride in their extensive fleet, as well as their fine staff. The staff, which was in charge of the company's vessels, was both trained and motivated-two factors that contributed immensely to the company's growth. From the year 2000 on, with global trends shifting toward privatization, Zim was eventually sold to private owners. The vessels were upgraded, new instruments and technologies installed, and personnel, including the vessels' operators, were reduced to only the minimum required by international nautical law. The explanation the company's owners used was simple: make a one-time investment in new machines that can navigate, operate, and monitor the ships instead of paying costly wages every month for a half dozen sailors to manage these functions. Of course, the machines themselves would have to be monitored by people, but these operators would only be required to check for the red or green buttons. They would not need to be highly trained, nor would they need to be highly paid.

So far, this seems like any other familiar company reorganization or streamlining practice occurring regularly in a demanding business world. The company could see the return on their investment pay off after only one or perhaps two years. Except for those sailors laid off from their jobs aboard the vessels, nearly everyone would be satisfied.

During the last month, two of Zim's vessels were involved in shipping accidents on the overcrowded seas along the coast of Southeast Asia. Both accidents were the result of Zim's vessels colliding with local fishing boats that unwittingly crossed their paths. Somehow, in both incidents, the sophisticated and efficient machines aboard the larger vessels did not recognize the much smaller fishing boats.  The fishing boats did not carry radar equipment or sophisticated radio systems such as those aboard the Zim ships and therefore were not detected by the sophisticated equipment onboard Zim's ships. In both incidents, the untrained Zim operator was short-handed, and either took too long to respond or lacked enough crew members to assist him with the right accident-saving actions. In both incidents the international nautical court stated that the fault was on the more efficient vessels' crews. Zim will have to compensate each of the fishing boat companies, their crews, and their families, an investment that would cost the company and its owners a great deal of money.

Technology is GREAT and can make our lives easier and smoother. However, technology cannot replace the human element, especially when it comes to dealing with threats. A trained staff, crew, and well organized team will always perform more efficiently than machines in adjusting and adapting spontaneously to new situations or the most current threats that arise. The investment cannot be measured in payroll expenditures, but rather by the economic consequences of something going wrong.

Learn more how to measure optimal framework in our upcoming seminar.

Tomer Benito