Robots are Disrupting the Supply Chain
- Chris Romano
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Rise of Machines Will Be the Ultimate Technology Disruptor
What’s your favorite robot? The sexy beast from Fritz Lang’s 1925 masterpiece, Metropolis? Robbie the Robot from 1956’s Forbidden Planet? The hulking, silent (but deadly) type in 1951’s The Day The Earth Stood Still? My personal favorite, and my avatar, is Bender from the wacky cartoon series Futurama, a profane, cigar smoking, beer swilling robot from the future. He’s practically my self portrait.
Adidas AG’s favorite robot resides in their “Speedfactory” nestled somewhere between Frankfurt and Munich, Germany. Richard Weiss, writing in Business Week’s “Adidas Automates to Make Shoes Faster” chronicles the investment in a new breed of factory, about half the size a soccer field, employing only around 160 people, able to produce 500,000 shoes annually.
The game changer is the automation that enables the factory to make shoes from cradle to grave; from raw material to finished product. These robots can be very, very flexible, churning out specialty footwear for local markets as the Speedfactory concept expands to those markets. Rainy London will need better waterproofing. Las Vegas won’t.
We hear about disruptive technology all the time. This is the real thing.
Yes, the technology (and miles of coding) is sexy, but as a CIO, your job is not to be sexy; your job is to change processes. Robots are disrupting the supply chain.
Currently Adidas contractors gather the raw materials and do some assembly in southeast Asia. More assembly is then done in China. Final assembly and distribution is done in Germany, and then the finished product finally gets to stores. You can imagine how long this takes. The Speedfactory dramatically reduces time to market, and that gets the attention of the CEO and shareholders.
Another attention grabber for shareholders are process failures.
Regina Elsea, who died at 20 years old in an auto parts plant in Alabama last year was the victim of one of those failures.
The assembly line had stopped when Robot 23 had a bolt get stuck during the manufacturing process. Elsea called maintenance, but nobody showed up. Faced with a daily quota, Elsea and her team entered the area around the robot to clear the fault. She was successful, and when the machine suddenly started up it impaled her against a dashboard frame with a pair of welding tips.
Nobody knew what to do, although they did flip the assembly line’s emergency switch. A Korean national who spoke little to no English was quickly brought from another part of the plant but as tempers flared the man, who also didn’t know what to do, fled. Rescue professionals finally arrived and killed power to the robot itself, something Regina and her co-workers were supposed to do before working on any robot.
Ajin was fined $2.5 million by OSHA, and, of course, is being sued. My non-professional legal opinion is that this was a glaring failure in process at many levels; in training, in troubleshooting, in safety, among other areas.
In the past, this wouldn’t have been a CIO issue. There were no CIOs when Henry Ford came up with the assembly line, so industrial accidents, which, admittedly, have been going on since the first iron forge, were problems for industrial and mechanical engineers.
Robotics and automation are the CIO’s problem
So it’s a double edged sword. If you are really taking on the mantle of “Chief Innovation Officer,” as discussed in my last blog post, then you need to look toward process change, workflow, and automation to deliver solutions.
But just because you fill your shop floor with robots, or fill your servers with enough AI to perform e-discovery sans lawyers, don’t abdicate the process; there still is one, and it needs to be managed.
If you successfully master automation, you’ll be an instant hero because you’ve addressed the two areas guaranteed to save any organization money; real estate and employees. Reduce the shop floor to half the size of a soccer field, and run the whole joint with only 160 people? You’ll be CIO of the year!
By next year if all goes well, we’ll see a half dozen or so of Adidas’ Speedfactories across the globe, including the US. The implications are enormous, because at the very least, every shoe and textile manufacturer will be looking at how the solution can work for them. Speedfactories will eventually be built in the countries whose workers used to be the first stop in the supply chain. Don’t expect them all to be absorbed by robotic, highly efficient factories. That is a disruption of an entirely different kind. When wide swaths of the population lose their $5 per day jobs, the disruption extends to politics, sociology, and economics.
So to be the truly innovative CIO in this environment, you will also have to subscribe to the Tony Soprano School of Management, because a lot of people are going to get whacked.
That’s how The Rise of The Machines will get us. Not with laser beams and armies of Terminator-types… no, it will be more insidious. It will be the robot on the shop floor not needing sick time, vacation, 401(k)s or a weekly wage.
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