Chapter 7 – Page 8 – The OM Blog by Heizer, Render, & Munson

OM in the News: Ford Tests Walking Robot Deliveries

Walking robots deployed from self-driving vans to deliver mail parcels could soon be seen marching up to homeowners’ doorsteps. The project is the product of a new partnership between Ford Motor and Agility Robotics. The companies are aiming to deploy early next year up to 100 autonomous Ford vehicles carrying a robot that can stand upright and walk from the van to front doors, writes The Wall Street Journal (May 22, 2019).

Agility’s robots—resembling a headless human—have the ability to climb stairs and move across lawns, which should help them deliver packages of up to 40 pounds. The partnership comes as Ford ramps up its ambitions in autonomous transportation with various technologies. In 2017, Ford said it would invest $1 billion in self-driving startup Argo AI over a five-year period. Last year, the company struck a deal with delivery startup Postmates to test self-driving vehicles for delivering groceries.

Few, if any, partnerships with a major U.S. corporation are testing upright delivery robots in public. Some startups and Amazon have been using robot fleets that carry goods inside rolling robots. The Agility-Ford team will focus on mail parcel delivery, though other applications, such as grocery delivery, aren’t ruled out.

Classroom discussion questions:

What factors might delay the successful rollout of this project?
Why is Ford entering the delivery business?

OM in the News: The Rise of the Collaborative Warehouse Robot

Two Locus Robotics mobile robots at work with a staffer picking products at a warehouse

Locus Robotic Corp. robots resemble motorized stools with shelving and touchscreens. They operate in groups and use sensors to navigate through warehouses as workers pick items and move on. They are part of a new generation of automated tools known as collaborative robots because they work with human staffers. They come equipped with software that ties together inventory management data and warehouse management systems to help the robots quickly locate products in vast warehouses and figure out the fastest, most efficient path to the goods.

The robots can double the efficiency of human workers by cutting the time workers spend walking between shelves, reports The Wall Street Journal (April 23, 2019). “We do that by surrounding a human with the robots, and we have algorithms that dramatically decrease the walking time in a building,” said Locus’ CEO. “Instead of walking up and down aisles, the human will work a zone and the robots will come to you.”

Most warehouses still rely largely on people who pull carts through the aisles, and even automated facilities like some of Amazon’s vast fulfillment centers require hundreds of workers to pick and pack goods for shipping. But the market for logistics robots is growing as online sales surge, pushing companies to fulfill orders faster for rapid delivery, and a tight labor supply makes it harder and more expensive to hire warehouse workers.

A report last month said that heavily automated warehouses worldwide would grow from 4,000 last year to 50,000 by 2023 and would put some 4 million commercial robots to work.

Classroom discussion questions:

What are the strengths and weaknesses of collaborative robots?
Why are warehouses pushing to automate?

OM in the News: The Next Israeli Breakthrough May Be a 3-D Printed Heart

This photo at the University of Tel Aviv shows a 3D print of heart with human tissue.

“The future is here,” one shopper remarked to another at a Tel Aviv market after watching the TV report that Israeli scientists unveiled a 3D print of a heart with human tissue and vessel. Calling it a first and a “major medical breakthrough” that advances possibilities for transplants, scientists hope one day to be able to produce hearts suitable for transplant into humans as well as patches to regenerate defective hearts.

The heart produced by researchers at Tel Aviv University is about the size of a rabbit’s. It marked the first time anyone anywhere has successfully engineered and printed an entire heart replete with cells, blood vessels, ventricles and chambers, reports The Times of Israel (April 19, 2019). The researchers plan to transplant them into animal models in about a year. “Maybe, in 10 years, there will be organ printers in the finest hospitals around the world, and these procedures will be conducted routinely,” said the project leader.

Their work involved taking a biopsy of fatty tissue from patients that was used in the development of the “ink” for the 3D print. Using the patient’s own tissue was important to eliminate the risk of an implant provoking an immune response and being rejected. Challenges that remain include how to expand the cells to have enough tissue to recreate a human-sized heart.

Current 3D printers are also limited by the size of their resolution and another challenge will be figuring out how to print all small blood vessels. But while the current 3D print was a primitive one, larger human hearts require the same technology. 3D printing has opened up possibilities in numerous fields, provoking both promise and controversy.

Classroom discussion questions:

Name five other major breakthroughs in technology out of Israel.
Have other body parts been “printed”?

OM in the News: Who Comes to the Rescue of Stranded Robots? Humans

Fannie Osran just had to help. The student at the UC, Berkeley, came upon a food-delivery robot, one of 120 deployed around campus, in front of a long flight of

stairs. The cooler-sized robot can’t navigate stairs, so it immediately backed up into a plant bed—where it got stuck in some mud. Ms. Osran told it, “You’re so pathetic.” She lifted the robot back onto the sidewalk, and it flashed heart eyes at her on its digital display as it rolled off.

Robotics companies are jumping into food delivery, testing out different models in limited areas, writes The Wall Street Journal (April 11, 2019). While people fear that robots will someday take over everyone’s jobs –for now, the prototypes can run into trouble just getting a burger and fries to a dorm. As the competition

among automated delivery services heats up, robot makers see winning over love from pedestrians—and local officials—as paramount to helping expand into communities and ease potential regulations.

Researchers also staged stuck robots in public, then hid in nearby restaurants and office buildings to see if anyone helped. They found people helped the robots more often when they emitted audible signals for help.

Oregon-based Agility Robotics builds walking robots that could be used for delivery. They resemble a headless person. “We don’t aspire to be cute. We’re definitely not going down that road,” said the CEO, noting that cute rolling robots can’t handle obstacles like stairs.

Classroom discussion questions:
1. Will these delivery robots be ubiquitous in 5 years?

2. Name other industries where “service robots” can make an impact.

OM in the News: Walmart’s Move to Automate Its Stores

An automated shelf scanner is among the robots that Walmart is introducing.

Walmart is expanding its use of robots in stores to help monitor inventory, clean floors and unload trucks, part of the retail giant’s efforts to control labor costs as it spends more to raise wages and offer new services like online grocery delivery, reports Supply & Demand Chain Executive (April 12, 2019). At least 300 stores this year will add machines that scan shelves for out-of-stock products. Autonomous floor scrubbers will be deployed in 1,500 stores to help speed up cleaning. And the number of conveyor belts that automatically scan and sort products as they come off trucks will double, to 1,200.

The company said the addition of a single machine can cut a few hours a day of work previously done by a human, or allow Walmart to allocate fewer people to complete a task, a large saving when spread around 4,600 U.S. stores. Executives are focused on giving workers more time to do other tasks, and on hiring in growing areas like e-commerce. Store workers spend 2-3 hours a day driving a floor scrubber through a store using the manual machines.

The automatic conveyor belts cut the number of workers needed to unload trucks by half, from 8 to 4 workers. An additional 900 stores will also get 16-foot-high towers that let shoppers pick up online orders without interacting with a human.

Retailers and other companies that hire large numbers of low-skilled hourly workers are increasingly looking to automation as they face higher labor costs and aim to improve retention amid the lowest unemployment in decades. Target added machines to count cash to backrooms of stores last year, following a similar move by Walmart.

Classroom discussion questions:

In what other ways can automation be used at Walmart to increase OM efficiency?
What is driving this expansion of automation?

OM in the News: The McDonald’s Menu Goes Digital

McDonald’s, in its largest acquisition in 20 years, is buying an Israeli decision-logic technology company to better personalize menus in its digital push, spending more than $300 million on Dynamic Yield Ltd., reports Fortune (March 26, 2019). With the new technology, McDonald’s restaurants can vary their electronic menu boards’ display of items, depending on factors such as the weather—more coffee on cold days and McFlurries on hot days, for example—and the time of day or regional preferences. The menus will also suggest add-on items to customers.

Since 2015 the 38,000 store burger chain has pushed technology—including self-order kiosks, digital menus boards and delivery— to boost sales and help McDonald’s stand out among rivals. Since the firm seldom carries out acquisitions, the purchase of Dynamic Yield shows the company’s desire to leverage technology to speed growth in the fiercely competitive restaurant industry. The move will make McDonald’s one of the first companies to integrate decision technology into the customer point of sale at a brick and mortar location.

“Technology is a critical element of our velocity growth plan,” says the McDonald’s CEO. “We are expanding the role that technology will play in McDonald’s future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.” The company said it would roll out the technology at restaurants in the U.S. in 2019 and then expand the use to other top international markets.

Classroom discussion questions:

What was McDonald’s largest acquisition before Dynamic Yield?
What other technologies have entered the restaurant industry?

OM in the News: The 3-D Printed House

The printer can print walls with a maximum height of 8½ feet and a width of up to 28 feet, with no limits on length.

A Texas startup says it will be able to use a 3-D printer to churn out a concrete house within days by year-end, a technology that has the potential to help solve housing shortages, writes The Wall Street Journal (March 12, 2019). The firm, Icon, says the printer can produce bungalows of up to 2,000 square feet, nearly as large as the typical 2,400-square-foot American home. A year ago, Icon built a 350-square-foot home in Austin using the new technology.

Still, home builders are likely to face skepticism about the look of the new houses, which are poured one layer at a time, producing walls that resemble the folds of a shar pei dog. The technology faces other practical hurdles. Scaling up the production and shipment of expensive and heavy machinery is formidable. Building homes in windy, rainy, hot or cold conditions presents another test.

The new 3-D printer is operated by a tablet and requires only a few people to run and supervise it. The 3,800-pound machine squeezes out a stream of concrete as though it is icing a cake. The machine replaces workers who frame a home and install sheet rock, insulation and exterior finishes. It also produces less waste than a traditional construction site, where a third of materials end up in the trash.

Icon said it costs about $20,000 and takes several days to 3-D print a 2,000-square-foot house. After factoring in the cost of land and other construction such as plumbing and finishes, it works out to a reduction of about 30% in total costs. In Austin, where the average home is roughly $400,000, Icon said it could make a home $120,000 cheaper. A 3-D-printed home could address real problems facing the industry. Construction costs have skyrocketed due to shortages of workers and rising material prices.

Classroom discussion questions:

Why is the industry skeptical about 3-D printing’s widespread use?
What are the advantages of the approach from an OM perspective?

OM in the News: Your Food is Almost Here

A DoorDash delivery person in New York City.

“Consumers expect to order books, toys, shoes and anything else they want online and have it show up at their doors quickly and inexpensively,” writes The Wall Street Journal (March 9-10, 2019). Now restaurants and grocers are rushing to satisfy the exact same demand. They’re having a hard time. A hungry customer might order a $9.99 Cuban sandwich from Panera which can arrive at her door in about 30 minutes. The problem for Panera is that each delivery costs $5 after accounting for labor, gas and packaging. Yet to avoid turning away customers, it continues to charge a flat delivery fee of $3 per order.

Food delivery is proving to be a thorny, expensive and crucial puzzle for restaurants and grocers. Billions of dollars have been spent in a quest to build services that reliably move fresh food from one place to another, yet many in the business wonder if they will ever get the economics right. Most delivery orders remain unprofitable. It costs supermarkets an average of $10 an order to deliver food, but grocers only recoup around $8 from customers because charging more risks turning off shoppers. And 85% of consumers aren’t willing to pay more than $5 for restaurant delivery. Walmart now offers grocery delivery through a half-dozen third parties, but e-commerce losses are expected to increase this year.

Online grocery sales are expected to grow to $86 billion in 2022 from $17 billion in 2017, while sales of online restaurant delivery will grow to $62 billion from $25 billion in that same span.

Unlike easy-to-ship household items, groceries must be packaged carefully and sent in refrigerated trucks. That makes the last mile of the delivery process—from the warehouse to the consumer’s door—a costly, often perilous journey. Restaurant meals must likewise be packed in special containers and delivered within a short window. Restaurants can’t ignore delivery since 1/3 of restaurant meals are now consumed at home! Yet few chains can afford to do delivery themselves, due to the cost of developing order-taking technology and of employing drivers.

Classroom discussion questions:

What OM issues do grocery stores face is setting up online delivery systems?
What percent of your students are using online restaurant delivery? Their comments?

OM in the News: FedEx’s Delivery Robot

The new FedEx Same-Day Bot can climb stairs to deliver packages.

FedEx will soon start testing robots that could make same-day deliveries of medicine, pizzas and other items to consumers’ homes, pushing the parcel-delivery giant into a new market competing against startups like Postmates that use humans for rapid deliveries.

The project makes FedEx the latest in a growing stream of companies to test automated, unmanned machines to make deliveries, writes The Wall Street Journal (Feb. 28, 2019). Amazon and UPS have demonstrated drones to deliver packages in certain areas, and Amazon has displayed a rolling robot it calls Scout in trials on city streets. Grocery chain Kroger recently showed off an unmanned vehicle that can deliver groceries in certain markets, and several robotics startups are testing autonomous delivery robots that use sensors and cameras to navigate sidewalks for short trips, including lunch deliveries to crowded Beijing office buildings.

But on-demand delivery companies such as Deliv and DoorDash that make point-to-point trips carrying food or e-commerce purchases typically rely on armies of couriers who travel by car, scooter or bicycle. The FedEx “SameDay Bot” is starting off with tests planned in the corporation’s hometown of Memphis. AutoZone, Lowe’s, Pizza Hut, Target, Walgreens and Walmart are looking at using the FedEx bot. Retailers envision having robot fleets ready to make same-day deliveries that would be branded with the retailer’s logo and modified for different uses– a cooler for grocery, a heater for pizza.

“The economics of a point-to-point delivery versus a planned or even an overnight delivery, they’re just very different,” says a FedEx exec. “Eventually, we believe the majority of same-day, point-to-point will be delivered using the FedEx SameDay Bot.”

Your students will enjoy the 30 second video embedded in the article.

Classroom discussion questions:

What makes delivery with the robot less than optimal?
What are the robot’s main advantages?

OM in the News: The High-Tech Chinese Pig Farm

One Chinese firm uses video to capture pig faces because they move a lot.

The new Chinese pig farm: A database of every pig’s face; Voice scans that detect hogs with a cough: Robots that dispense just the right amount of feed. “Chinese companies are pushing facial and voice recognition and other advanced technologies as ways to protect the country’s pigs,” writes The New York Times (Feb. 25, 2019). In this Year of the Pig, many Chinese hogs are dying from a deadly swine disease, threatening the country’s supply of pork, a staple of Chinese dinner tables. China has already culled a million pigs (out of a population of 400 million), set up roadblocks and built fences, to no avail.

There’s a lot at stake. China is the world’s largest pig breeder and its largest pork consumer. The meat is so important that China has its own strategic pork reserve. With 10’s of millions of pig farms, the Chinese government has endorsed technology on the farm. Its most recent 5-year plan calls for increased use of robotics and network technology, saying it wants to promote “intelligent farming.” Officials praised “raising pigs in a smart way” using the A-B-C-Ds: artificial intelligence, blockchain, cloud computing and data technology.

Technology companies say they can help farmers isolate disease carriers, reduce the cost of feed, increase fertility, and reduce unnatural deaths. JD.com’s system uses robots to feed pigs the correct amount of food depending on the animals’ stage of growth. SmartAHC uses A.I. to monitors pigs’ vital statistics, and hooks up sows with wearable monitors that can predict ovulation time.

Chinese are quick to embrace high-tech solutions to just about any problem. A digital revolution has transformed China into a place where nearly anything can be summoned with a smartphone. Facial recognition has been deployed in public bathrooms to dispense toilet paper, in train stations to apprehend criminals, and in housing complexes to open doors.

Classroom discussion questions:
1. Why will this high-tech approach be difficult to implement?

2. What technology is used in American farming?

OM in the News: The Hidden Automation Agenda

The Milwaukee offices of the Taiwanese electronics maker Foxconn, which plans to replace 80% of the company’s workers with robots in 5-10 years

In public, many CEOs wring their hands over the negative consequences that A.I. and automation could have for workers. They talk about the need to provide a safety net for people who lose their jobs as a result of automation. But in reality, writes The New York Times (Jan. 26, 2019), many are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.

All over the world, executives are spending billions of dollars to transform their businesses into lean, digitized, highly automated operations. They see A.I. as a golden ticket to savings, perhaps by letting them whittle departments with thousands of workers down to just a few dozen. A 2017 survey by Deloitte found that 53% of companies had already started to use machines to perform tasks previously done by humans. The figure is expected to climb to 72% next year. Investment bank UBS projects that the A.I. industry could be worth $180 billion by next year.

The author of “AI Superpowers” predicts that A.I. will eliminate 40% of the world’s jobs within 15 years. He said that CEOs were under enormous pressure from shareholders and boards to maximize short-term profits, and that the rapid shift toward automation was the inevitable result. But other experts have predicted that A.I. will create more new jobs than it destroys, and that job losses caused by automation will probably not be catastrophic.

The CEO of the Chinese e-commerce firm JD.com said last year that “I hope my company would be 100% automation someday.” The World Economic Forum estimates that of the 1.37 million workers who are projected to be fully displaced by automation in the next decade, only 1 in 4 can be profitably reskilled by private-sector programs. “The choice isn’t between automation and non-automation,” said the director of M.I.T.’s Initiative on the Digital Economy. “It’s between whether you use the technology in a way that creates shared prosperity, or more concentration of wealth.”

Classroom discussion questions:

What can A.I. do to help OM functions?
Will A.I. replace as many jobs as some predict?

OM in the News: Food Delivered by Robots at GMU

GMU’s robots deliver meals to students and faculty via an app

At most universities, meal plans allow college students to take advantage of on-campus cafeterias or chow down at local restaurants. Now, writes The Washington Post (Jan. 22, 2019), thousands of students at George Mason University will have another dining option at their disposal: on-demand food delivery via an autonomous robot on wheels. The school has a fleet of 25 Starship Technology delivery robots that can haul up to 20 pounds each as they roll across campus at 4 mph. Robots make deliveries in 15 minutes or less. GMU is the first campus in the country to incorporate robots into its student dining plan and has the country’s largest fleet of delivery robots.

The company’s app allows GMU students to order food from places such as Blaze Pizza, Starbucks and Dunkin,’ as well as a grocery store and other options. Once an order has been placed, users drop a pin where they want their delivery to be sent. The robot’s progress can be monitored using an interactive map. Once the machine arrives, users receive an alert, allowing them to unlock the robot using the app. The delivery cost–$1.99.

To navigate the campus, robots rely on A.I., ultrasonic sensors and 9 cameras. Two-way audio on board allows users to communicate with “human teleoperators” who monitor the robots from afar. The robots can cross streets, climb curbs, navigate around obstacles and operate in rain and snow. Sodexo, which runs campus dining, says that “the delivery robots are at the forefront of changing trends.”

“Students and teachers have little free time as it is, so there is a convenience for them to have their food, groceries and packages delivered to them,” said Starship Technology’s VP. “Our goal is to make life easier, whether that means skipping the line, or finding the time to eat better when studying for exams. Commuters can even meet the robot on their way into class.”

Classroom discussion questions:

Would this be popular and efficient on your campus?
What concerns might you have regarding this new concept?

OM in the News: The Grocery Robot is Here

A Starship robot on its way to deliver groceries

The first time you encounter a fully self-driving commercial vehicle, odds are it will be delivering your groceries rather than ferrying you to your destination. There are a number of reasons things are trending this way, including laws, physics, the nature of existing infrastructure, and the size of the addressable markets. Autonomous delivery could transform all of retail, further accelerating the shift from stores to e-commerce. “With sufficiently inexpensive autonomous delivery services, we might stop going to the grocery store, or at least stop carrying our groceries home,” writes The Wall Street Journal (Jan. 5-6,2019).

In a demo that also took place in December, autonomous delivery company Nuro showed off a robot designed to drive on the street, at a maximum speed of 25 miles per hour. Half the width of a normal car, Nuro’s R1 robot is intended to sacrifice itself in the event of a crash with a cyclist, pedestrian or other vehicle. Making vehicles that don’t go too fast also allows these companies to make use of a regulatory loophole. A federal and state standard for “low-speed vehicles” has long allowed automakers to create vehicles that lack traditional safety features, as long as they move no faster than 25 mph.

Grocery delivery is especially ripe for disruption because at present it’s prohibitively expensive for most consumers. Between 2-4% of the $641 billion worth of groceries purchased every year in the U.S. are bought online. In 2017, Daimler invested in Starship, which makes a robot about the dimensions of a medium-size dog. The company’s robots are already making deliveries of both food and packages in the outskirts of London.

Classroom discussion questions:

Why might delivery robots proliferate more quickly than driverless cars?
What are some of the disadvantages of autonomous delivery?

OM in the News: Meet Zora, The Robot Caregiver

This is Zora. It may not look like much — more cute toy than futuristic marvel — but this robot is at the center of an experiment in France to change care for elderly patients. When Zora arrived at this nursing facility near Paris, a strange thing began happening: Many patients developed an emotional attachment, treating it like a baby, holding and cooing, giving it kisses on the head. Zora offered companionship in a place where life can be lonely. Families can visit only so much, and staff members are stretched. Patients at the hospital have dementia and other conditions that require round-the-clock care.

Zora often leads exercises and plays games. It can have a conversation because the nurse (out of view) types words into a laptop for the robot to speak.

Zora doesn’t dispense medicine, take blood pressure or change bedsheets, but its Belgium-based provider has sold over 1,000 of the robots (at $18,000 each) to health care facilities around the world. In nearly every country, the population of older adults is rising. The number of people over 60 will more than double to 2.1 billion by 2050.

There simply won’t be enough people for the required health care jobs, so new technology must be created to help fill the void, writes The New York Times (Nov. 27, 2018). The challenge is particularly acute in France, where hospitals have been facing a national crisis, with health care professionals striking and protesting budget cuts and staff shortages. In Australia, a hospital using a Zora found that it improved the mood of some patients, and got them more involved in activities. And patients have told the robot things about their health they wouldn’t share with doctors.

Classroom discussion questions:

What can and can’t Zora do?
Where else can “service robots” make their mark?

OM in the News: Farms, Robots, and Illegal Immigrants

Maria Guadalupe has gone from packing bagged salads into boxes to setting up and monitoring robots that do her old job.

Lettuce-packing facilities are wet, loud, and freezing — and much of the work is physically taxing, even mind-numbing. Now, a fleet of robots designed to replace humans, has become one of the agriculture industry’s latest answers to a diminishing supply of immigrant labor, reports The New York Times (Nov. 24, 2018). Smart machines can assemble 60 to 80 salad bags a minute, double the output of a worker.

Enlisting robots makes sound economic sense, with Americans’ insatiable appetite for healthy fare, at a time when companies cannot recruit enough people to work in the fields or the factory. A decade ago, people lined up by the hundreds for jobs at packing houses during the lettuce season. No more. But moving up the technology ladder creates higher-skilled positions that attract young people.

A 2017 survey found 55% of farmers reported labor shortages– 70% for those who depend on seasonal workers. About 3/4 of U.S. crop workers were born abroad, and they are overwhelmingly illegal. Beefed up border enforcement has rendered “follow-the-crop” migration a relative rarity.

California’s $54 billion agricultural industry is leading the move to automate in the fields and packing plants. Driscoll’s, the berry titan, has invested in several robotic strawberry harvesting start-ups which use imaging technology to assess a berry’s ripeness before it is harvested. Christopher Ranch, a giant in garlic, began using a 30-foot-tall robot to insert garlic buds into sleeves for sale in supermarkets. Bartley Walker now offers a robotic hoeing machine with a detection camera capable of identifying the weeds that sprout between row crops like broccoli and cauliflower. One machine replaces 11 workers. About 60% of the romaine lettuce and half of all cabbage and celery produced by Taylor Farms are harvested with automated systems. (Delicate fruit, like peaches, plums and raspberries will remain labor intensive for the foreseeable future).

Classroom discussion questions:

How is technology changing the crop industry?
What can be done to resolve the labor shortage?