DOCSLIB.ORG

Crowdsourcing As a Model for Problem Solving

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Crowdsourcing As a Model for Problem Solving CROWDSOURCING AS A MODEL FOR PROBLEM SOLVING: LEVERAGING THE COLLECTIVE INTELLIGENCE OF ONLINE COMMUNITIES FOR PUBLIC GOOD by Daren Carroll Brabham A dissertation submitted to the faculty of The University of Utah in partial fulfillment of the requirements for the degree of Doctor of Philosophy Department of Communication The University of Utah December 2010 Copyright © Daren Carroll Brabham 2010 All Rights Reserved The University of Utah Graduate School STATEMENT OF DISSERTATION APPROVAL The dissertation of Daren Carroll Brabham has been approved by the following supervisory committee members: Joy Pierce , Chair May 6, 2010 bate Approved Karim R. Lakhani , Member May 6, 2010 Date Approved Timothy Larson , Member May 6, 2010 Date Approved Thomas W. Sanchez , Member May 6, 2010 bate Approved Cassandra Van Buren , Member May 6, 2010 Date Approved and by Ann L Dar lin _ ' Chair of _________....:.; :.::.::...=o... .= "' :.: .=:.::"'g '--________ the Department of Communication and by Charles A. Wight, Dean of The Graduate School. ABSTRACT As an application of deliberative democratic theory in practice, traditional public participation programs in urban planning seek to cultivate citizen input and produce public decisions agreeable to all stakeholders. However, the deliberative democratic ideals of these traditional public participation programs, consisting of town hall meetings, hearings, workshops, and design charrettes, are often stymied by interpersonal dynamics, special interest groups, and an absence of key stakeholder demographics due to logistical issues of meetings or lack of interest and awareness. This dissertation project proposes crowdsourcing as an online public participation alternative that may ameliorate some of the hindrances of traditional public participation methods. Crowdsourcing is an online, distributed problem solving and production model largely in use for business. It leverages the collective intelligence of online communities by soliciting ideas and solutions for an organization from these communities through the form of an open call. The mechanism of one type of crowdsourcing, the peer-vetted creative production approach, aligns with the goals of public participation programs. In light of this, Next Stop Design was launched in 2009 in an attempt to test crowdsourcing in a public participation context for transit planning. Next Stop Design was an online competition where users submitted bus stop shelter designs and voted on the designs of peers to determine a best design. This study examines the effectiveness of the Next Stop Design project as an online deliberative democratic process, as perceived by Next Stop Design participants, and also examines the motivations of participants on the site. Interviews via instant messenger were conducted with 23 participants focusing on their perceptions of the Next Stop Design project according to a list of ideal features for online deliberative democratic process and a list of motivations for participation. Data suggest that Next Stop Design was perceived to be a generally effective online deliberative democratic process, with perceived weaknesses concerning the facilitation of the project through public voting and the equality of participants on the site in light of apparent voting fraud in the competition. Findings also suggest that participants were motivated to participate in the project because they saw an opportunity to advance their careers, they had fun, they learned new skills and knowledge, and they saw the project as an opportunity for creative self-expression. Participants were also motivated to participate because the Web site was appealing, usable, and had a low barrier to entry, and participants offered constructive feedback to improve the process as a whole. iv TABLE OF CONTENTS ABSTRACT ....................................................................................................................... iii ACKNOWLEDGMENTS ................................................................................................ vii Chapters 1. INTRODUCTION ...................................................................................................1 PEN: A Vignette for Online Public Participation ....................................................2 Crowdsourcing as an Online Public Participation Tool ...........................................4 Overview of the Dissertation ...................................................................................5 2. LITERATURE REVIEW ......................................................................................10 Deliberative Democracy ........................................................................................11 Public Participation in Urban Planning..................................................................15 The Medium of the Internet ...................................................................................21 Collective Intelligence, Wise Crowds, and Problem Solving ................................24 Online Deliberation ................................................................................................27 Democratic Process in Organized Networks .........................................................33 Crowdsourcing as a Model for Problem Solving ...................................................35 The Knowledge Discovery and Management Approach ...........................37 The Broadcast Search Approach ................................................................38 The Peer-Vetted Creative Production Approach .......................................40 Distributed Human Intelligence Tasking ...................................................41 Moving the Crowd .................................................................................................43 3. METHOD ..............................................................................................................55 Applied Communication Research and Critical Media Design .............................56 Next Stop Design as Research Site ........................................................................59 Basic Findings from Next Stop Design .....................................................63 The Design of this Study........................................................................................67 4. ANALYSIS AND DISCUSSION..........................................................................77 Summary of Interview Data Collected ..................................................................78 Themes Relating to Ideal Features of Online Deliberative Democratic Process ...................................................................................................................82 Accessible and Informed............................................................................83 Autonomous, Free of Censorship, and Transparent...................................86 Pluralistic and Inclusive .............................................................................89 Accountable and Relevant and Public .......................................................92 Facilitated and Equal and Responsive .......................................................96 Themes Relating to Motivations ..........................................................................101 To Advance One’s Career and To be Recognized by Peers ....................102 To Contribute to a Collaborative Effort and To Express Oneself ...........105 To Have Fun and To Learn New Skills and Knowledge .........................106 Low Barriers to Entry, Ease of Use, and Perceptions of an Appealing, Usable Web Site ....................................................................108 General Impressions and Crowdsourcing for Future Government Projects ........110 5. CONCLUSION ....................................................................................................116 Summary of Findings from this Study .................................................................117 Findings Related to the Ideal Features of Online Deliberative Democracy ...............................................................................................118 Findings Related to Motivations ..............................................................120 Limitations and Future Needed Research ............................................................121 Guiding Principles for Practitioners Interested in Crowdsourcing for Public Participation ..............................................................................................127 APPENDIX: INTERVIEW GUIDE ................................................................................132 REFERENCES ................................................................................................................135 vi ACKNOWLEDGMENTS The crowd that had a hand in this dissertation and in my decade of higher education deserves a lot of praise. I am thankful for my advisor, Joy Pierce, both for dealing with my procrastination and stubbornness and for providing wonderful scholarly guidance and friendly encouragement along the way. Thanks also to my supervisory committee: Cassandra Van Buren, for cultivating my creativity and inspiring me to push boundaries; Tom Sanchez, for supporting my interdisciplinary explorations into urban planning and helping get Next Stop Design off the ground; Tim Larson, for years of encouragement and confidence in both my teaching and research abilities; and Karim Lakhani, for going out on a limb to take me on as an advisee
Load more

Recommended publications
  • Confronting the Challenges of Participatory Culture: Media Education for the 21St Century
    An occasional paper on digital media and learning Confronting the Challenges of Participatory Culture: Media Education for the 21st Century Henry Jenkins, Director of the Comparative Media Studies Program at the Massachusetts Institute of Technology with Katie Clinton Ravi Purushotma Alice J. Robison Margaret Weigel Building the new field of digital media and learning The MacArthur Foundation launched its five-year, $50 million digital media and learning initiative in 2006 to help determine how digital technologies are changing the way young people learn, play, socialize, and participate in civic life.Answers are critical to developing educational and other social institutions that can meet the needs of this and future generations. The initiative is both marshaling what it is already known about the field and seeding innovation for continued growth. For more information, visit www.digitallearning.macfound.org.To engage in conversations about these projects and the field of digital learning, visit the Spotlight blog at spotlight.macfound.org. About the MacArthur Foundation The John D. and Catherine T. MacArthur Foundation is a private, independent grantmaking institution dedicated to helping groups and individuals foster lasting improvement in the human condition.With assets of $5.5 billion, the Foundation makes grants totaling approximately $200 million annually. For more information or to sign up for MacArthur’s monthly electronic newsletter, visit www.macfound.org. The MacArthur Foundation 140 South Dearborn Street, Suite 1200 Chicago, Illinois 60603 Tel.(312) 726-8000 www.digitallearning.macfound.org An occasional paper on digital media and learning Confronting the Challenges of Participatory Culture: Media Education for the 21st Century Henry Jenkins, Director of the Comparative Media Studies Program at the Massachusetts Institute of Technology with Katie Clinton Ravi Purushotma Alice J.
    [Show full text]
  • Crowdsourcing: Today and Tomorrow
    Crowdsourcing: Today and Tomorrow An Interactive Qualifying Project Submitted to the Faculty of the WORCESTER POLYTECHNIC INSTITUTE in partial fulfillment of the requirements for the Degree of Bachelor of Science by Fangwen Yuan Jun Liang Zhaokun Xue Approved Professor Sonia Chernova Advisor 1 Abstract This project focuses on crowdsourcing, the practice of outsourcing activities that are traditionally performed by a small group of professionals to an unknown, large community of individuals. Our study examines how crowdsourcing has become an important form of labor organization, what major forms of crowdsourcing exist currently, and which trends of crowdsourcing will have potential impacts on the society in the future. The study is conducted through literature study on the derivation and development of crowdsourcing, through examination on current major crowdsourcing platforms, and through surveys and interviews with crowdsourcing participants on their experiences and motivations. 2 Table of Contents Chapter 1 Introduction ................................................................................................................................. 8 1.1 Definition of Crowdsourcing ............................................................................................................... 8 1.2 Research Motivation ........................................................................................................................... 8 1.3 Research Objectives ...........................................................................................................................
    [Show full text]
  • Crowdsourcing Database Systems: Overview and Challenges
    Crowdsourcing Database Systems: Overview and Challenges Chengliang Chai∗, Ju Fany, Guoliang Li∗, Jiannan Wang#, Yudian Zhengz ∗Tsinghua University yRenmin University #Simon Fraser University zTwitter [email protected], [email protected], [email protected], [email protected], [email protected] Abstract—Many data management and analytics tasks, such inside database only; while crowdsourcing databases use as entity resolution, cannot be solely addressed by automated the “open-world” model, which can utilize the crowd to processes. Crowdsourcing is an effective way to harness the human cognitive ability to process these computer-hard tasks. crowdsource data, i.e., collecting a tuple/table or filling an Thanks to public crowdsourcing platforms, e.g., Amazon Me- attribute. Secondly, crowdsourcing databases can utilize the chanical Turk and CrowdFlower, we can easily involve hundreds crowd to support operations, e.g., comparing two objects, of thousands of ordinary workers (i.e., the crowd) to address these computer-hard tasks. However it is rather inconvenient to ranking multiple objects, and rating an object. These two main interact with the crowdsourcing platforms, because the platforms differences are attributed to involving the crowd to process require one to set parameters and even write codes. Inspired by database operations. In this paper, we review existing works traditional DBMS, crowdsourcing database systems have been proposed and widely studied to encapsulate the complexities of on crowdsourcing database system from the following aspects. interacting with the crowd. In this tutorial, we will survey and Crowdsourcing Overview. Suppose a requester (e.g., Ama- synthesize a wide spectrum of existing studies on crowdsourcing zon) has a set of computer-hard tasks (e.g., entity resolution database systems.
    [Show full text]
  • Henry Jenkins Convergence Culture Where Old and New Media
    Henry Jenkins Convergence Culture Where Old and New Media Collide n New York University Press • NewYork and London Skenovano pro studijni ucely NEW YORK UNIVERSITY PRESS New York and London www.nyupress. org © 2006 by New York University All rights reserved Library of Congress Cataloging-in-Publication Data Jenkins, Henry, 1958- Convergence culture : where old and new media collide / Henry Jenkins, p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8147-4281-5 (cloth : alk. paper) ISBN-10: 0-8147-4281-5 (cloth : alk. paper) 1. Mass media and culture—United States. 2. Popular culture—United States. I. Title. P94.65.U6J46 2006 302.230973—dc22 2006007358 New York University Press books are printed on acid-free paper, and their binding materials are chosen for strength and durability. Manufactured in the United States of America c 15 14 13 12 11 p 10 987654321 Skenovano pro studijni ucely Contents Acknowledgments vii Introduction: "Worship at the Altar of Convergence": A New Paradigm for Understanding Media Change 1 1 Spoiling Survivor: The Anatomy of a Knowledge Community 25 2 Buying into American Idol: How We are Being Sold on Reality TV 59 3 Searching for the Origami Unicorn: The Matrix and Transmedia Storytelling 93 4 Quentin Tarantino's Star Wars? Grassroots Creativity Meets the Media Industry 131 5 Why Heather Can Write: Media Literacy and the Harry Potter Wars 169 6 Photoshop for Democracy: The New Relationship between Politics and Popular Culture 206 Conclusion: Democratizing Television? The Politics of Participation 240 Notes 261 Glossary 279 Index 295 About the Author 308 V Skenovano pro studijni ucely Acknowledgments Writing this book has been an epic journey, helped along by many hands.
    [Show full text]
  • A Blockchain-Based Decentralized Framework for Crowdsourcing
    © 2020 JETIR February 2020, Volume 7, Issue 2 www.jetir.org (ISSN-2349-5162) A Blockchain-based Decentralized Framework for Crowdsourcing Priyanka Patil Department of Computer Science and Engineering, Sandip University, Nashik, Umakant Mandawkar Assistant Professor Department of Computer Science and Engineering. Sandip University, Nashik. Abstract- Crowdsourcing empowers open collaboration over the Internet. Crowdsourcing is a method in which an man or woman or an employer makes use of the understanding pool gift over the Internet to perform their task. These platforms provide numerous benefits quality, and lower assignment completion time. To execute tasks efficiently, with the employee pool to be had on the platform, task posters rely on the reputation managed and maintained by the platform. Usually, reputation management machine works on ratings supplied by means of the task posters. Such reputation systems are susceptible to several attacks as users or the platform owners, with malicious intents, can jeopardize the reputation device with fake reputations. A blockchain based approach for managing various crowdsourcing steps provides a promising route to manage reputation machine. We propose a crowdsourcing platform where in every step of crowdsourcing system is managed as transaction in Blockchain. This allows in establishing better trust inside the platform customers and addresses various attacks which are possible on a centralized crowdsourcing platform. Keywords- Block-chain, Crowdsourcing, centralized. I.INTRODUCTION A block-chain is a decentralized, distributed and public digital ledger this is used to record transactions across many computer systems so that any involved record cannot be altered retroactively, without the alteration of all next blocks. Crowdsourcing is a sourcing model in which people Or companies gain goods and services, including ideas and finances, from a large, exceedingly open and frequently rapid-evolving organization of internet users; it divides work among individuals to reap a cumulative result.
    [Show full text]
  • Crowdfunding, Crowdsourcing and Digital Fundraising
    Fundraising for Archives Crowdsourcing, Crowdfunding and Online Fundraising Crowdfunding, Crowdsourcing & Digital Fundraising Aim of Today This session will help to demystify the landscape surrounding crowdsourcing, crowdfunding, and online fundraising providing you with information and tools essential when considering these different platforms. Plan for today • Understand the digital fundraising techniques • Evaluate what components are required for an online campaign to be successful • What does a good online case for support look like • Reflect on examples of good practice • Build a crowdfunder plan 4 5 Apples…….oranges……or pears? Digital isn’t complicated – change is! 7 DO YOU HAVE THE RIGHT TOOLS FOR THE JOB TO NAVIGATE THE MAZE 8 Your Crowd… • Internal Stakeholders • External Stakeholders Databases: Which one do you choose? Microsoft Dynamics 10 Who’s Online ONS 2015 ONLINE DONATION METHOD Blackbaud 2014 12 DO YOU HAVE THE RIGHT TOOLS FOR THE JOB TO NAVIGATE THE MAZE • Email • Website / online platform • Social Media • CRM System / Database • Any others…… You need to be able to engage with your online audience on multiple platforms! 13 Email "Correo." by Itzel402 - Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons - 14 https://commons.wikimedia.org/wiki/File:Correo..jpg#/media/File:Correo..jpg http://uk.pcmag.com/e-mail-products/3708/guide/the-best-email-marketing-services-of-2015 15 Social Media 16 Social Media Channel Quick Guide •Facebook - Needs little explanation. Growing a little older in terms of demographics. Visual and video content working well. Tends to get higher engagement than Twitter. •Twitter - The other main channel. Especially useful for networking and news distribution.
    [Show full text]
  • Liquidfeedback in Large-Scale Civic Contexts: Framing Multiple Styles of Online Participation
    Journal of LiquidFeedback in Large- scale Civic Contexts: Framing Social Multiple Styles of Online Media for Participation Giulia Bertone, Fiorella De Cindio, Organizations Stefano Stortone Volume 2, Number 1 Published by the MITRE Corporation Journal of Social Media for Organizations ____________________________________________________________________________________________ LiquidFeedback in Large-scale Civic Contexts: Framing Multiple Styles of Online Participation Giulia Bertone, [email protected] Fiorella De Cindio, [email protected] Stefano Stortone, [email protected] ABSTRACT Growing distrust in government is accompanied by new opportunities for civic involvement through online technological platforms. LiquidFeedback is one of the most interesting, as it embeds innovative features to support online deliberative processes. Designed as an intranet tool for closed, homogeneous groups, the software has also been used in large civic contexts involving citizens at large. This paper presents and analyses two large-scale deliberation projects where thousands of Italian citizens used the LiquidFeedback platform. The analysis aims to understand how well this software serves as a platform for people to gather ideas, draft proposals collaboratively, and then rate them by degree of consensus. We consider the political context for these field cases and their socio-technical design choices, look at how LiquidFeedback enables citizen participation, discuss politicians’ accountability in terms of online activity, and report participants’ assessment of the two projects. Our analysis adapts existing frameworks that match different participation styles to profiles of activity in online communities. KEYWORDS LiquidFeedback, large-scale ideation and deliberation, online deliberation, democracy, civic participation. INTRODUCTION Manuel Castells, the well-known sociologist and author of The Rise of the Network Society (Castells, 1996), recently studied protest movements worldwide that arose in the wake of dramatic economic crisis.
    [Show full text]
  • Perspectives on the Sharing Economy
    Perspectives on the Sharing Economy Perspectives on the Sharing Economy Edited by Dominika Wruk, Achim Oberg and Indre Maurer Perspectives on the Sharing Economy Edited by Dominika Wruk, Achim Oberg and Indre Maurer This book first published 2019 Cambridge Scholars Publishing Lady Stephenson Library, Newcastle upon Tyne, NE6 2PA, UK British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Copyright © 2019 by Dominika Wruk, Achim Oberg, Indre Maurer and contributors All rights for this book reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. ISBN (10): 1-5275-3512-6 ISBN (13): 978-1-5275-3512-1 TABLE OF CONTENTS Introduction ................................................................................................. 1 Perspectives on the Sharing Economy Dominika Wruk, Achim Oberg and Indre Maurer 1. Business and Economic History Perspective 1.1 .............................................................................................................. 30 Renaissance of Shared Resource Use? The Historical Honeycomb of the Sharing Economy Philipp C. Mosmann 1.2 .............................................................................................................. 39 Can the Sharing Economy Regulate Itself? A Comparison of How Uber and Machinery Rings Link their Economic and Social
    [Show full text]
  • Creating in a Participatory Culture: Perceptions of Digital Tools Among Teachers
    Teaching/Writing: The Journal of Writing Teacher Education Volume 5 Issue 1 2016 Article 9 2016 Creating in a Participatory Culture: Perceptions of Digital Tools Among Teachers Emily Howell Iowa State University, [email protected] Rebecca Kaminski Clemson University, [email protected] Sarah Hunt-Barron University of South Carolina Upstate, [email protected] Follow this and additional works at: https://scholarworks.wmich.edu/wte Part of the Curriculum and Instruction Commons, and the Secondary Education and Teaching Commons Recommended Citation Howell, Emily; Kaminski, Rebecca; and Hunt-Barron, Sarah (2016) "Creating in a Participatory Culture: Perceptions of Digital Tools Among Teachers," Teaching/Writing: The Journal of Writing Teacher Education: Vol. 5 : Iss. 1 , Article 9. Available at: https://scholarworks.wmich.edu/wte/vol5/iss1/9 This Article is brought to you for free and open access by the English at ScholarWorks at WMU. It has been accepted for inclusion in Teaching/Writing: The Journal of Writing Teacher Education by an authorized editor of ScholarWorks at WMU. For more information, please contact [email protected]. T / W Creating a Participatory Culture: Perceptions of Digital Tools Among Teachers Emily Howell Iowa State University Rebecca Kaminski Clemson University Sarah Hunt-Barron University of South Carolina Upstate Ninety-five percent of teens, ages 12-17, are on the Internet, with 74% of these teens accessing the Internet through mobile devices at some point (Madden, Lenhart, Duggan,
    [Show full text]
  • Forms and Potential Effects of Citizen Participation in European Cultural Centres
    . Volume 15, Issue 2 November 2018 Forms and potential effects of citizen participation in European cultural centres Birgit Eriksson, Camilla Møhring Reestorff & Carsten Stage, Aarhus University, Denmark Abstract: This article proposes a framework for understanding citizen participation in European cultural centres. Europe has thousands of cultural centres with many millions of annual visitors and actively involved citizens. Citizen participation is a core value of the centres but has, like the centres themselves, been under-researched. The article presents a participatory research and action project that was part of the programme for the Danish city of Aarhus as a European Capital of Culture in 2017: RECcORD: Rethinking Cultural Centres in a European Dimension (2015-17). In RECcORD, we researched citizen participation as a method: with networking employees or ‘citizen scientists’ from centres across Europe; and as an object: as practices and understandings of participation at the centres. Based on an inductive research methodology, we offer a typology of the forms and potential effects of citizen participation in the centres. We identify six forms: attention, education, co-creation, co-habitation, publics and co-decision; and nine potential effects: aesthetic intensity, feeling of togetherness, social inclusion, wellbeing, learning, empowerment, cultural/political reflection, local development and sustainability. We further suggest a definition of participation in the centres and argue for the importance of exploring both ‘vertical’ power and ‘horizontal’ communities when aiming at an understanding of citizen participation in cultural centres and beyond. Keywords: citizen participation, cultural centres, participatory methods, power, communities. Introduction Across Europe, there is a demand for institutions to engage citizens as active participants.
    [Show full text]
  • Crowdsourcing, Citizen Science Or Volunteered Geographic Information? the Current State of Crowdsourced Geographic Information
    International Journal of Geo-Information Article Crowdsourcing, Citizen Science or Volunteered Geographic Information? The Current State of Crowdsourced Geographic Information Linda See 1,*, Peter Mooney 2, Giles Foody 3, Lucy Bastin 4, Alexis Comber 5, Jacinto Estima 6, Steffen Fritz 1, Norman Kerle 7, Bin Jiang 8, Mari Laakso 9, Hai-Ying Liu 10, Grega Milˇcinski 11, Matej Nikšiˇc 12, Marco Painho 6, Andrea P˝odör 13, Ana-Maria Olteanu-Raimond 14 and Martin Rutzinger 15 1 International Institute for Applied Systems Analysis (IIASA), Schlossplatz 1, Laxenburg A2361, Austria; [email protected] 2 Department of Computer Science, Maynooth University, Maynooth W23 F2H6, Ireland; [email protected] 3 School of Geography, University of Nottingham, Nottingham NG7 2RD, UK; [email protected] 4 School of Engineering and Applied Science, Aston University, Birmingham B4 7ET, UK; [email protected] 5 School of Geography, University of Leeds, Leeds LS2 9JT, UK; [email protected] 6 NOVA IMS, Universidade Nova de Lisboa (UNL), 1070-312 Lisboa, Portugal; [email protected] (J.E.); [email protected] (M.P.) 7 Department of Earth Systems Analysis, ITC/University of Twente, Enschede 7500 AE, The Netherlands; [email protected] 8 Faculty of Engineering and Sustainable Development, Division of GIScience, University of Gävle, Gävle 80176, Sweden; [email protected] 9 Finnish Geospatial Research Institute, Kirkkonummi 02430, Finland; mari.laakso@nls.fi 10 Norwegian Institute for Air Research (NILU), Kjeller 2027, Norway; [email protected]
    [Show full text]
  • Crowdsourcing Comes to Logistics
    Crowdsourcing Comes to Logistics A collaborative approach leverages the wisdom of the crowd to enrich and accelerate network design. Crowdsourcing Comes to Logistics 1 After driving distribution costs to post-recession lows, traditional methods of designing logistics networks are nearing the end of the road. Our 2016 State of Logistics survey found US business logistics expenditures dipped to 7.5 percent of gross domestic product in 2016, the lowest level since 2009 and the third straight yearly decline (see figure 1). In total dollars, logistics outlays of $1.39 trillion were down 1.5 percent, the first drop in seven years. Figure In , US business logistics costs declined basis points to . percent of GDP US business logistics costs as a share of nominal GDP . .­ . .­ . 34 bp . . . . .­ .­ .­ . Note: bp is basis points. Sources: CSCMP’s th Annual State of Logistics Report; A.T. Kearney analysis Shippers delighted by the descending cost curve should control their glee, though, because additional distribution savings will be hard to come by. The tried-and-true methods that produced recent cost reductions are losing their edge. Typical network optimization programs unfold in two stages: a design phase conducted by shippers with little or no input from logistics providers, followed by extended price-focused negotiations with various carriers, warehouse operators, and third-party logistics providers (3PLs). Benchmark-driven price negotiations have squeezed big concessions out of providers, particularly in sectors where excess capacity has sapped their bargaining power. But falling prices also have pushed carriers’ profit margins to unsustainably low levels, leading to disruptions such as last year’s bankruptcy of Korean container shipping giant Hanjin.
    [Show full text]