PARDON THE DISRUPTION - CHAPTER FOURTEEN

ROBOTS CHANGE
THE PLAYING FIELD

a. Warehouse/Distribution/Logistics

There are two significant disruptions occurring in the warehouse/ distribution/logistics (WDL) industry. The first example is old school; it is not a product of disruptive technologies – more of a sign of the times and an indication that, despite our best efforts, old solutions may not address current problems.

The story of a certificate program to provide greater training for workers at logistics centers – FedEx Ground, UPS and others – will be told later in this book. For now, suffice it to say that these well-intentioned efforts, akin to those of previous generations to raise the level of knowledge of workers in the WDL, industry haven’t raised the performance bar.

The next set of examples represents what the introduction of disruptive technology will mean to WDL and will describe the final nail in the coffin of initial attempts to make ordinary labor forces to intersect with it. In an industry sector that in many cases isn't appreciably different from how it was managed 60 years ago (a customer places an order, a call is made to a warehouse to pull stock, a product is put on a truck and shipped to a customer), this will be earth-shattering.

Two examples of the use of robots in manufacturing and warehousing – and the seriousness with which huge investments are being made in robotics – illustrate what a game changer this is going to be. The New York Times reported in August, 2012 about the transition on the same site from old warehousing methodology to a new system incorporating robots. C & S, the nation’s largest grocery wholesaler, operates a huge food distribution warehouse with almost 500,000 ft.² of floor space in Newburgh, New York. In traditional warehousing style, hundreds of people driving forklifts and pallet jacks unload supply trucks and load 18-wheelers for transport to reach grocery stores.

The Times continues: “The new system is much smaller, squeezed into only 30,000 square feet at the far end of the warehouse and controlled by just a handful of technicians. They watch over a four-story cage with different levels holding 168 ‘rover’ robots the size of go-carts. Each can move at 25 miles an hour, nearly as fast as an Olympic sprinter.” Imagine the rush to join this powerful new force among warehousing operators across America. The footprint of the building could be a fraction of what’s currently needed. Operating costs would be much lower than for today's operations. Payrolls would shrink dramatically. Efficiencies would be outstanding.

This isn’t idle speculation. Amazon believes in this system so strongly that they bought robot-maker Kiva Systems in 2012 for $775 million. Using the technology developed for the Kinect motion-sensing system in Microsoft's Xbox video game system, this newer breed of robot can “see” much more effectively than its predecessors. Using the Kiva system, Amazon can save millions on payroll expense for warehouse labor. How long before UPS and FedEx Ground join the movement to making their warehouses and distribution networks a robotic majority?

b. 3-D Printing

Robotics will provide the bulk of the same-motion mass manufacturing in the future. As it’s done successfully today, there is no reason to believe that manufacturers will back away from a less expensive, more efficient process in the future. But for prototypes, single (or limited-number) object needs, and home use, 3-D printing will be the wave of the future.

3-D printing differs from traditional manufacturing in many ways, but the biggest difference is that where traditional manufacturing ordinarily trims, sands or cuts away unneeded or unwanted parts of an initial object, 3-D printing builds an object through an accumulative process. It adds one or more materials as specified in the computer program to build the final object. Micro layer by micro layer, the computer adds the base material until the final product is completed. The base elements range from plastics to titanium powder.

The printer itself is no bigger than a traditional paper sheet cutter, rarely bigger than 2' x 2'. Based on design instructions from a computer, the base moves along one axis while the extruder/applicator moves along another, perpendicular one. The process allows for the most intricate design and product flexibility. Architects have used 3-D printing for years to build models. Advances in speed and productivity are now placing the productivity and per-item cost in the range of injection molding. Auto and airline parts are being made by 3-D printers to meet the exacting specifications of those industries. The Economist reports that in a single day, on a single machine, up to 450 individually specified dental crowns can be made; some crown manufacturers using traditional methods can scarcely produce twelve in a day. They also report that, using a high-performance industrial polymer, a 3D printer has produced parts or a violin that, once assembled by a professional violin-maker, could be played by a concert violinist. A custom-fit jawbone was made recently, saving thousands of dollars over traditional manufacturing methods.

Kurzweilai.net shared a story in October 2012 from Smart Planet about a report from Transport Intelligence that posed the question: “Will 3D printing make global supply chains unnecessary?” The WDL industry, already migrating to robots, may see the newfound benefits of advancing technology countered with another advanced technology that reduces the amount of product shipped. Goods made locally won’t be as reliant on the supply chain and shipping processes as those produced through large site manufacturing.

The authors, John Manners-Bell of Transport Intelligence and Ken Lyon of Virtual-Partners Ltd., point out that as 3-D printing becomes more efficient, it will more easily compete with the traditional manufacturing/shipping paradigm. Even the effects of globalization could be mitigated as transportation costs are minimized from the overall product cost structure. For those hoping that manufacturing will come “home” to America, that is just where it may be done – in the homes of millions of Americans.

Scientists are finding success building real human muscle tissue with a 3-D printer. Peter Thiel, the billionaire investor who co-founded PayPal and was the first outside investor in Facebook, just gave (through his philanthropic foundation) $350,000 to a company named Modern Meadow. They also plan to meet the world’s insatiable demand for meat protein by 3-D bioprinting an "edible prototype" that's a meat replacement.

Futurists are projecting that - like the inkjet printers most homes now contain - a 3-D printer will be in most homes within the next ten to fifteen years. The cost has already fallen to under $1,000 for most basic models; office supply retailer Staples is carrying one basic model in their stores. Software for AutoCAD design and popular items are becoming commonplace. In the near future, making your own unique item at home will be scarcely more complex than sharing a computer design (much like sharing music today) and going to the store to pick up the requisite composites (much like going to the fabric store today.) Between the advances in robotics and the rapid acceptance of 3-D printing, the days of the mega-manufacturing sites may be a vestige of the past sooner than we ever thought possible.

c. Industrial Robots

For years, many large American manufacturers – most significantly the automotive industry – have used robots to manufacture goods. At their best, robots provide both consistent quality and consistent production output, and have proven their worth.

As robotic quality increases and pricing falls precipitously, more and more companies will opt to use robots in their processes. Factory Automation Systems, an Atlanta consulting firm specializing in technology, offered attendees at a tradeshow in Chicago a cost comparison of traditional human labor versus robotic labor. According to the New York Times, “a robotic manufacturing system initially cost $250,000 and replaced two machine operators, each earning $50,000 a year. Over the 15-year life of the system, the machines yielded $3.5 million in labor and productivity savings.”

Newer models of robots can be programmed for multiple tasks, are easier to "train," and can provide a variety of cost-saving features beyond their strict production uses. Companies aggressively using robots for manufacturing can usually use a smaller building footprint: robots don't need break rooms or bathrooms. They can work in a wider range of temperatures, lowering heating and cooling costs. Many need no lights to work. And they don't drive to work, which allows manufacturers to maintain fewer spaces for parking.

The Times article went on to highlight the Tesla Motors factory in Fremont, California, on the edge of Silicon Valley. It compares Tesla’s side of the building, where robots are heavily utilized, with the other side – a shuttered Toyota Corolla assembly line where thousands of employees once produced 500,000 cars a year.

Rethink Robotics in Boston recently announced the release of Baxter, a new manufacturing robot. Rethink was co-founded by Rodney Brooks, the Panasonic Professor of Robotics at MIT, who previously found marketplace success with iRobot, a company he founded that’s best known for producing the robotic floor-sweeper, Roomba. Om Malik on his GigaOm website says this about Baxter: “It is an inexpensive (sub-$25,000) semi-anthropomorphic line robot that is relatively simple to program. It is very flexible. And it has the potential of reshaping the manufacturing processes – first in mind-numbingly boring tasks such as packaging and removing things off a conveyer belt. ‘It doesn’t have the dexterity to build an iPhone, but it sure can package an iPhone,’ Brooks quipped.”

Programming Baxter has been compared to programming a TiVo. And unlike the previous generation’s robots, Baxter needs no protective fencing. Will Knight adds: “Much like a human worker, Baxter can be taught in minutes how to recognize a new object or perform a new task. To teach Baxter to recognize something, you just hold the object in front of one of its cameras, which are located in the head, in the chest, and at the end of each arm. To program an action, you can move one of Baxter's two giant arms through the desired motion and select from a number of preprogrammed actions using a pair of dial controls found in each forearm. When you grab one of Baxter's arms, it feels light as a feather. Its motors compensate in response to your touch, making the heavy limb easy to move through the air.”

The International Federation of Robotics estimates that there are now 1.1 million working robots around the world. About 80 percent of all the work involved in manufacturing a car is now performed by machines. Affordable and easy to program and assimilate into a manufacturing operation, Baxter represents the next step in a robotic displacement of manufacturing labor. In the Wall Street Journal’s January 17, 2012 edition, Timothy Aeppel reported that orders for new robots were up 41% through September 2011, leading to an overall market increase in productivity. "Output per hour worked in nonfarm businesses has increased 6% during the recovery. Hours worked are up only 1.5%."

The same Wall Street Journal article related the story of expansion by Stihl, the German chainsaw manufacturer. Their plant in Virginia Beach has 120 robots that operate around the clock, with only seven workers per shift. The company plans to double their output by investing in more robots and software for $10 million; only six more workers will be needed. Peter Mueller, the executive vice president of the US division, reported that the cost for chainsaws made in Virginia is only 1.8% higher than the ones they make in China.

Domestic operations are not the only places where robots are taking over. In China, noodle robots went into mass production this past March and are going for about 13,000 Chinese yuan – or about $2,000 – each.

Of greater consequence, Foxconn plans to add one million industrial robots over the next three years, at a cost of $50 billion. The company may not be well known in America, but the products they assemble have some of the highest name recognition in the world with high marks for quality – products like the iPad, Nintendo Wii, HP laptops, Amazon Kindle Fire and Motorola cell phones. They currently employ over 960,000 workers, principally in China. The purchase and installation of this robotic investment is estimated to put 500,000 Chinese laborers out of work.

The Stihl chainsaw decision is confirmation that robots can significantly reduce the cost of manufacturing – so much so that the operation in Virginia can compete on cost with a factory in China. And both the Stihl and Foxconn examples show that the robots can help eliminate payroll expense; they truly are an equal opportunity unemployer.

Next time you hear a got-all-the–answers politician or economist railing on about bringing manufacturing back to the U.S., keep in mind that it may indeed return in a big way – but with an army of robots and a very minimal number of jobs.

d. Robotic Vehicles

We spoke earlier in Chapter Six about the legal problems we will face when integrating robotic vehicles into the stream of commerce. The proliferation of vehicles operated by machine intelligence will disrupt virtually every aspect of our economy. Robotic Cars will be available to the ordinary consumer, and will be driving themselves on public roads, by 2020. We project that they will steadily replace traditional motor vehicles, and by 2040 it will be unusual to see someone manually operating a car. Fatal vehicle accidents will drop from the present 35,000 per year to fewer than 1,000 in 2040. Non-fatal accidents, which presently injure over 400,000 people every year in the US, will decrease to a similar degree.

The good news is we can say good-bye to accidents caused by human drivers who are drunk, fatigued, angry, distracted, in a hurry, too young, too old, reckless, suicidal, or just plain stupid. We will also say good-bye to the professional drivers who operate 18-wheelers and delivery vans. Commercial vehicles operated by machines won’t be subject to the human afflictions listed above. They won’t get lost, and will never need a per diem, health insurance, or payment per mile. Theft will decline as well. An entire industry of professional drivers will go the way of the blacksmith. There will be no taxi drivers. Valet car parking will become a memory as vast lots of cars tidily park themselves.

The multibillion dollar insurance industry will no longer be needed to adjust almost half a million personal injuries and deaths per year. They will lay off scores of adjusters. Plaintiffs’ lawyers will move into family, criminal and commercial law to make up for lost revenue from tort law cases increasingly few and far between. Insurance defense lawyers likewise will no longer be needed – when there is no offense, there is no need for defense.

Technology will, once again, do for society what the criminal courts have utterly failed to do. It will remove the drunk drivers from our streets, our overcrowded jails, and our overburdened court dockets. With robotic cars, everyone’s in the passenger seat. We will have engineered the ultimate designated driver.

Collision centers will close when there are hardly any wrecked cars to repair. The same holds true for suppliers of wrecked car parts. The electric motors replacing internal combustion engines will remove the need for engine mechanics. Every industry that services our current automotive needs will be reduced dramatically, if not altogether eliminated.

Manufacturing will suffer as well, because we won’t need to replace our cars as often. We currently have 6.3 million collisions every year in the US. In them, 5 million cars are deemed “totaled” and need to be replaced. With machine intelligence in control, our cars won’t be abused the way they are now, with people riding their brakes, or jerkily accelerating and decelerating. Operated optimally by intelligent machines, the average car will last a couple extra years. Manufacturing will be as affected as everything else associated with cars.

e. Androids/Cyborgs

Industrial robots will be able to do the rote, programmable tasks that industry requires. The bulk of manufactured commodity goods will ultimately be largely made by robotic means. Androids, on the other hand, are robots largely designed in human form to be programmable (and perhaps, ultimately, self-learning) surrogates for humans. (Androids are contrasted with cyborgs, living organisms enhanced with technological attachments or improvements.) They will possess skill sets identical to those of human beings, only without the many limitations imposed by our biology – the size of our brain, our need for oxygen, our inability to function in extreme temperatures, just to name a few. So what can we expect from our manufactured friends?

LIFE WITH JEEVES

Tony was born in 2025. He grew up on the east coast during the transitional period that previous generations had called “The Singularity.” His formative years were stressful as he watched his parents grapple with rampant unemployment. Robotic labor exploded exponentially and displaced all human workers, permanently. For a proud Italian family in New Jersey it wasn’t easy. Now, in his early 30's, Tony has a comfortable life except for one glaring problem – Jeeves. Tony lives in a time when every citizen in North America has been assigned his own personal robot. Jeeves is charged with earning Tony a living. When not at work, Jeeves must also help Tony with his finances, education, travel, entertainment, and life in general. Life should be easy, right? When computer intelligence collides with human intelligence, there’s bound to be some friction – cognitive dissonance, if you will. Let’s see how they’re doing.

Jeeves strolled into the living room where Tony was engaged in a loud and explosive video game. “Excuse me, sir. I have a number of pressing issues we need to discuss,” said Jeeves in his clipped British accent. Tony was gesturing wildly as his video avatar obeyed his every move. Consoles were long gone.

Tony, looking like a madman, sweat dripping from every pore, finally gave up in disgust as his avatar met a grisly end. “Whut!” he bellowed at Jeeves. The four walls of his modest room switched from the rocky surface of Saturn, where he was on a commando raid, to a large aquarium. It created the illusion that they were living underwater in a coral reef.

“You’re damn right we need to talk. I’ve about had enough of your bullshit,” snapped Tony. “I’m sick and tired of livin’ in this dump. Some of my friends are actually looking out of real windows at real mountains. I’m stuck with four walls and a crappy simulator. I don’t mean to get personal, Jeeves, but as a provider you kinda suck. There, I said it!”

“Yes, quite right, Your Majesty. And you, Tony, your contribution has been only matched by your inability to get out of bed before the crack of noon,” Jeeves replied dryly.

“Hey, hey, I’ve been busting my ass to make this work. You have an IQ of like, whut, 10,000? If we have a problem it rests with you, dude,” sneered Tony. “It’s not like I had a choice or nuthin’. You was assigned to me, memba’?” demanded Tony
.
“Yes I remember it quite well. As I recall I made the mistake of pointing out that you drink too much. Your hostility all started when I asked why you drank so much alcohol when celebrating with your friends. Your reaction was downright fiendish,” observed Jeeves.

“Wait just a damn minute. My reaction? All I did was try to let you see why humans drink when they celebrate. Yea, OK, I downloaded a virus into your hard drive. OK, I admit it. I just thought it would let you see what it was like to get a little intoxicated. No harm intended. So now it’s my fault you got dizzy, fell in the pool, and projectile vomited hydraulic fluid? Hey, I ain’t been invited back in case you didn’t notice. I’m callin’ you out on this one, Jeeves,” accused Tony. “You can’t hold your liquor, if you know what I mean.”

Jeeves looked at Tony with total disgust. “I have done my best to serve you within the parameters of my programming. What is the problem, Tony?”

“OK, man, you wanna get real? You don’t make enough money to support us! My friends are goin’ on trips all over the world and livin’ in style while I’m stuck in this bullshit government housing! Might look great but it’s completely fake. It sucks!” shouted Tony. “I don’t wanna be mean Jeeves, but can I replace you?”

“You are not entitled to an upgrade for one more year. The next asteroid mining mission will not arrive on Earth until next year. There are insufficient rare Earth minerals to allow for massive upgrades at this time. Sorry. I would be more than happy to step aside if only I could. This assignment has been no cakewalk for me, I can assure you,” declared Jeeves.

Tony’s eyes narrowed. “So look, Jeeves, I heard about a bonus they pay for people willin’ to go off-planet. You know, I go to Mars or sumthin’ and get a million dollar bonus. I’m, like, helpin’ with the overcrowdin’, right?”
Jeeves rolled his eyes. “You could not possible qualify any time soon,” declared Jeeves. “A drug test is required of all participants in the off-planet initiative. You would require 30 days’ detox and 6 months of aftercare before they would even accept an application,” warned Jeeves. “If memory serves me correctly, I believe I am the one that told you not to start using drugs. The mind upload is safe and equally consciousness-expanding. Oh, but not you, Tony. It had to be ‘real.’ Well, is it real enough for you now?” mocked Jeeves.

“Hey, don’t change the subject. We was talkin’ about you not makin’ enough money for us to live on,” accused Tony.

“That is entirely unfair. I go to work every day on your behalf to make a living. You have food, clothing, and shelter thanks to me. You have everything you need to live.”

“You call this livin’? I’m like your pet. You call the shots like some big guy while I stay at home playin’ video games, fa’ Christ’s sake,” spit Tony.

“Well perhaps you would prefer to go to work while I stay at home. Are you prepared to compete in an exponential world controlled by machine intelligence running at 10,000 times the speed of your carbon-based chemical brain? Well? Just as I thought. You humans talk a good game but in reality you and I both know you would not last ten minutes in the real world of business,” declared Jeeves. Tony just hung his head and looked dejectedly at the floor.

“Look,” said Tony, “I got a lead on a brilliant investment that’s gonna, like, explode. We put ten grand in this baby and bada bing, we got a hundred grand, easy,” pleaded Tony. “This ain’t like those other deals. This is legit and we can get out of this dump and start livin’. Come on Jeeves. I need this one,” begged Tony. “We can get the money out of savings.”

“Tony, that is impossible. I am required to maintain six months of living expenses in the savings account at all times. We have no money to draw on. I am prohibited from going against my programming. I am literally incapable of doing what you request. Sorry, old chap.” After a minute’s silence, he added, “My risk analysis software tells me this is a bad idea, anyway.”

“My friends are going to the Bahamas and I’m stuck in Hoboken. You don’t, like, feel nuthin’,” accused Tony.

“I have tried to be kind, Tony, but you leave me little choice. We are not going to the Bahamas for a number of reasons that all revolve around you, chap. I am sick and tired of your bellyaching and whining. You are not the victim, Tony. I am!” declared Jeeves.

It had been a long time coming but Jeeves could hold back the dam no longer. Suddenly, like a torrential rain, it all came pouring out. “Do you have any idea what I have had to deal with? You function at the maturity level of a teenager. Do you remember when I was recharging on the docking port and you took a picture of me with my pants down? Uploading that on the internet was an outrageous violation of my privacy. And the time you put that post-it note on my back at a formal gala that said ‘robots suck’. I can still hear them snickering. I am tired of your lack of appreciation. All I receive from you in exchange for all my hard work is utter humiliation,” shot back Jeeves.

“You ain’t no saint either, Jeeves. How did my mom get an anonymous email when I tested positive for drugs, huh?” accused Tony. “I’m thinkin’ I was provoked.” Jeeves rose up to his full height, “I am programmed to always do what is in your best interests. Sometimes you just do not understand, I am a slave to my programming, like it or not,” declared Jeeves.

“Fogetaboutit, Jeeves. I said I was sorry about all that. Let’s go out on the town. We got the scratch to hit the clubs, right?” demanded Tony. Jeeves wirelessly accessed the bank account ledger and did the math. “We can go out and spend $300 dollars, including transportation costs,” warned Jeeves. “Now we’re talkin’! You can be my wing man, Jeeves,” declared Tony. “No more tricks, I promise.”

As they went out the door Tony could be heard asking Jeeves if they could maybe go to the Bahamas in six months if he helped more around the house. Jeeves also said he would take another look at Tony’s investment idea. Nothing like a guys' night out to promote male bonding.

The current crop of humanoid robots is unable to do any of the things imagined in the past chapters. We must bear in mind, however, that Moore’s Law suggests they will continue to double their abilities (and price performance) every two years. That clunky robot that walks like a drunken sailor is only years away from taking your job. His refinements and abilities will double every year as his cost is cut in half. The same goes for the communication capacities of automated intelligence. Listen to how Siri has improved in just the last 4 years. She’s more human all the time.
To the roundtable!

CLAY: I predict jury trials will disappear, except for some special circumstances, by 2030. They will become extremely rare, replaced by robotically enhanced judicial intervention. Summary judgment will become the norm along with agreed settlements through mediation by both parties. Most drug crimes will no longer be enforced in criminal courts, done away with by genetic manipulation and vaccinations.
Brain-scan lie detector tests will be admissible in US courts by 2025. This will lead to a second round of the wrongly convicted being released from prison. The numbers will exceed those freed by DNA technology.

ROB: We have focused most of our technological emphasis on robotics and 3-D printing. But nanotechnology and genomics will be game-changers as well. Our medical future will be vastly different than what we grew up with. A syringe full of stem cells will replace open heart surgery. When diabetes is done away with by the genetic manipulation of our cells, there will be no need for insulin shots. With kidney failure a thing of the past, we will no longer have dialysis machines. Cures will become more robust and simultaneously less expensive. We will no longer hear about how Medicare and Medicaid are financially unsustainable.

CLAY: And don’t forget about AGI. That may prove to be the biggest of them all. Machines will design and manufacture themselves, with man along just for the ride.

RANDY: I believe the electronic world we currently live in, with its omnipresent connectivity and new forms of conversation, will change how we relate to each other forever. And we have no idea how it will play out. But privacy is over. Big brother is everyone and everywhere. I see one unique social outcome that no one seems to be talking about:

In the 21st century, shunning will become a much more effective tool in dealing with malfeasants. I anticipate companies that will purchase arrest and conviction records, along with the booking photographs of convicts from jurisdictions across the nation. This information will then be sold to retailers, governments, and even individuals. Combining high-definition video cameras with cheap data storage and facial recognition software, it will become possible to search any given area for convicts of all kinds. Anyone whose face called up an arrest record could be stopped from entering a retail establishment, park, or playground, and certain privately-owned neighborhoods and municipalities. Police could be routed to these people’s whereabouts in a matter of minutes. They could intimidate them, or even order them to leave.

With the ability to determine a person’s whereabouts almost immediately, shunning will become a vastly more effective way of dealing with malfeasance. This could do away with prison for non-violent offenders, saving hundreds of millions of dollars per year. The question then becomes for how long someone should be shunned. Under present laws, there are ways to expunge or seal criminal arrest records for first-time nonviolent offenders. But how will such information be expunged once it is scattered over millions of intertwined computers?