Defining an organization’s culture as a “Family” culture reflects tolerance to subpar performance. Rather focus on those characteristics of a “family” culture that you want.
The cry that “The Robots are Coming” is not new. Robots and AI have been replacing humans for some time; however, COVID has accelerated that trend. As businesses seek to get up and running again, they realize that it will be more difficult with humans and social distancing. Adopting robots and AI allows businesses to keep operating and reduce health risks to human workers. Thus companies are turning to industry giants like Fanuc Corp., Keyence Corp., and Harmonic Drive Systems Inc.
In addition to the industry giants, many companies are providing AI and robotics for specific industries. Brain Corp reports its customers are employing robots about 13% more than they were in the months before the pandemic. The autonomous cleaners can do basic cleaning tasks “so that workers can use their time to do essential sanitation. Robots are something a lot of our customers are looking at now, and it’s making a big difference.” says Phil Duffy, Bain’s Vice President of Innovation. Tally, an autonomous shelf-scanning robot produced by Simbe Robotics can audit inventory at grocery stores through computer vision and machine learning. Food markets are finding this essential as they struggle to keep products on the shelf during the disruption of the pandemic. Fetch Robotics, through its cloud platform, allows for the rapid deployment of robots in warehouses and similar facilities. Due to social distancing, robots are making up the difference, says Melonee Wise, Fetch’s CEO.
Autonomous mobile robots (AMRs) have more agile navigational abilities. They so are able to move about a warehouse by navigating with built-in sensors and laser scanners, retrieving goods, and bringing them to people. AMRs can avoid obstacles in their path, including people, but they can also work in collaboration with people. So AMRs can adjust to new layouts and patterns. With e-commerce and the variability of SKUs and orders that characterize it, these robots provide organizations the ability to flex and scale as needed without changing their infrastructure.
Intelligent robot arms ability to assess a wide range of objects and grasp each with the correct force and grip is improving dramatically. Thus, such robots arms can quickly sort items into appropriate bins or packages for shipping. With the expected, soaring demand for smaller, more local warehouses located closer to points of delivery, the need for quick and flexible operations will drive demand for these robots.
Nearly 28% of respondents to IDC’s 2020 Supply Chain Survey ranked “improving supply chain resiliency/responsiveness” as a top concern driving strategic change in their supply chains. An acceleration of automation and robots in warehouses is coming, as supply chains seek to ensure less fragility. More companies will operate “dark warehouses,” which operate 100% autonomously. However, more change will come as organizations seek to replace non-value-added movement with automation and robotics to make them more efficient.
IDC presented its 2020 predictions in January, pre the COVID crisis. Simon Ellis, program vice president, Global Supply Chain Strategies at IDC, said, “Digital transformation is now the overriding priority for most manufacturers and retailers, with the adoption of digital technologies aimed to improve efficiency and effectiveness in the shorter term while providing the opportunity to either disrupt their market segment or be resilient to others that may try.” The key predictions were:
By the end of 2020, half of all large manufacturers will have automated supplier and spend data analysis.
By year-end, half of all manufacturing supply chains will have invested in supply chain resiliency and artificial intelligence.
By 2022, 35 percent of firms’ logistics business outsourcing budget will be dedicated to process automation, focusing on order, inventory, and shipment tracking.
By 2023, 65 percent of warehousing activities will use robots and situational data analytics to enable storage optimization, increasing capacity by over 20% and cutting work order processing time in half.
To reduce stress on the service supply chain, by 2023, 25 percent of OEMs will leverage blockchain to source spare parts.
2023, 60 percent of G2000 manufacturers will invest in AI-driven robotic process automation to automate tasks.
Worldwide, robot adoption has remained low as many companies have had little desire to deal with integrating them into operations, or in triggering a politically sensitive social backlash. However, approximately 60% of global production work can easily be automated. Robotic adoption across industries is different as tasks requiring significant dexterity remain difficult for machines. However, COVID is lowering the barriers to adoption, which are predominately attitude. South Korea and Germany are positive examples of countries that have achieved high factory-automation levels while keeping unemployment low.
A survey by Pricewaterhouse Coopers LLC found that while the majority of industrial production companies’ CFOs are expecting to cancel or defer investments, only 15% are planning to cut investment for automation, artificial intelligence, and industrial internet-of-things.
Given the high level of unemployment, a concern is many of the jobs lost to automation will not be regained. According to the International Labour Organization, COVID could reduce working hours by 6.7% across globally, the equivalent of 195 million full-time workers. This automation creates a new issue, what to do with displaced labor. Low-income jobs are particularly vulnerable to automation. Thus, “automation and digital technologies are exacerbating social cleavages and could be a source of unrest for years to come,” said Carl Benedikt Frey of Oxford’s Future of Work. Social unrest will put pressure on companies to re-skill and accommodate their workers.
The pace of change is increasing daily, and addressing the resulting social problems will be hard. Watch this space.
Copyright (c) 2020, Marc A. Borrelli
Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”
The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.
Many business owners want to sell at the top of the market. However, market timing is tough. Is this the best strategy? Probably not.
Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...
As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.
“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.