'Faster, better and cheaper' has been the rallying cry of capitalism for the past 250 years, ever since the first factory brick was laid in bucolic pasture land. Indeed, one of the dominant drivers in business -- from the Industrial Revolution to the Internet Revolution -- has been low-cost, high-impact innovation.
This was part of the inspiration for Eli Whitney, who invented the cotton gin in 1793. Whitney’s machine delivered on the promise of faster, better and cheaper, and it touched off a surge of productivity that doubled the yield of raw cotton each decade after 1800.
This was a key factor behind the building of the Erie Canal, which doubled transportation speed in the United States in 1825 while cutting transportation costs by 95 percent.
And this was a prime motivator behind Ford Motor’s new factory in 1913, which reduced the assembly time for an automobile chassis from 12.5 hours to 1.5 hours over the course of one year. The results were profound: Ford’s sales skyrocketed from 202,000 units in 1913 to more than 1 million in 1920.
Faster, better and cheaper has played a huge role in recent decades, too.
Harnessing its hub-and-spoke system, for example, Federal Express took on the U.S. Post Office and “snail mail” in the 1970s. On its first night of operation, FedEx used 14 jets to deliver 186 packages to 25 cities; today, the company’s 664 jets and 80,000 vehicles make 8 million deliveries to 220 countries every day.
And utilizing its lightening quick configure-to-order system, Dell Computer integrated just-in-time delivery to make the manufacturing and purchase of computers less expensive and more flexible.
The entire notion of faster, better and cheaper has been radically redefined in the internet era, and perhaps no company better embodies this recalibrated twenty-first century revenue-and-profit mantra than Amazon.
Initially, the faster, better and cheaper magic for the giant online retailer was its ability to provide consumers with discounted merchandise that could be ordered with several simple clicks; but now, with Kindle, consumers get the books they want instantly at even lower prices.
In the eighteenth, nineteenth and twentieth centuries, faster, better and cheaper resulted from fine-tuned processes, systems and technologies, but over the past 15 years -- since the advent of the commercial internet -- faster, better and cheaper has also become a crucial competitive differentiator. In a world of hundreds of thousands of near-customized Web apps, consumers absolutely expect to get what they want, when they want it, and how they want it -- and at a price that makes sense to them. These are the non-negotiable variables in a new commercial equation spawned by real-time digital communications and capabilities.
So what’s next? What other variables will be added in the twenty-first century?
Right now, I believe we need to focus on adding 'greener' to the equation.
Companies today increasingly recognize that it’s not enough to be faster, better and cheaper, especially if they’re not greener.
The rise of sustainability and its emergence as a key business determinant is interesting, especially because the climate issue remains a problem without a real solution at this moment. We also haven’t established standard global metrics that indicate how much progress we’re making -- or need to make -- in cleaning up the environment.
But it’s clear that greener is a critical addition to the new commercial equation that is taking hold today after 250 years of faster, better and cheaper.
Why?
Because companies recognize that there is a significant financial and economic cost attached to pollution, even though there’s no firm and formal price on carbon at this point in time. There are also tremendous societal expectations at play today; and it’s becoming increasingly unacceptable to pollute in a globally interdependent world.
Perhaps the best paradigm for faster, better, cheaper – and greener – right now is the shipping container industry, an industry I know well as the CEO of the Port of Seattle.
Over the past few decades, container transport has been one of the key catalysts behind the global economy’s expansion, and it now represents a major percentage of the world’s total cargo.
In terms of faster, better and cheaper, a high-speed crane can load a 40-ton container every two minutes, increasing productivity significantly. And, because loading and unloading containers is so efficient, cargo can now be transported between Hong Kong and New York in 15 days, as opposed to 50 days, the length of the journey in 1985.
In terms of greener, the major container shipping companies, as well as many ports, are trying to conduct business on a more sustainable basis today.
A number of ships are slow-steaming, for example, in an effort to cut fuel consumption and emissions.
And at the Port of Seattle, we’ve worked with our terminal operators to retrofit and electrify nearly 200 pieces of cargo handling equipment to reduce noxious particulate matter by 25-50 percent.
We’ve also set strict mandatory benchmarks for truck emissions that must be met starting in 2011; we also implemented a financial incentive program for truckers who need to retrofit their vehicles or upgrade to newer, cleaner models. As a result of this program, 232 older and more polluting trucks have been scrapped since November, and the number of vehicles that are unfriendly to the environment is decreasing rapidly. (Editor's note: both the Prometheus Institute and the Carbon War Room have tagged ports as a prime opportunity for greening an industry.)
In addition, we’re providing incentives for cargo ships to use cleaner fuels. We believe that this policy will lower diesel particulate emissions from container ships by 60 percent and sulfur dioxide by at least 80 percent. Our At Berth Clean (ABC) Fuels program already reduced dangerous emissions by 68 metric tons last year.
From my perspective, it’s extremely encouraging that companies across the board are adding greener to the tried-and-true faster, better and cheaper model. And, in my view, this evolving commercial equation will lead to even greater innovation and prosperity in the coming years -- as well as the environmental progress that citizens and communities all over the world need and deserve.
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Tay Yoshitani is CEO of the Port of Seattle.