Robotic applications have evolved over time. Historically, robots were used in manufacturing largely for repetitive tasks that require speed, strength, and moderate precision, such as material handling and processing, welding and soldering, and assembly. With their growing computing power and the development of miniature precision sensors, robots are moving from making cars to driving them. As they become more affordable and application programming becomes easier with more sophisticated user interfaces, robots are making small-batch production economically more feasible, because line changeovers are much faster. Given that product life cycles are getting shorter and just-in-time manufacturing helps minimize the need for inventory, robotic flexibility and responsiveness are important benefits. And since many of the new robots have multiple arms, they can multitask with ease—and without losing focus. In the Netherlands, Philips uses 128 robots to make razors. The only humans are the nine workers who perform quality checks.
Robots can also do without lighting, heat, air conditioning, supervision, food, and bathroom breaks. As a result, “lights out” manufacturing plants that offer significant cost and energy savings are emerging. At some factories, robots are even building other robots, producing about 50 robots per 24-hour shift and operating unsupervised for as long as 30 days at a time. Clearly, the robotic megatrend is fundamentally changing the economics of manufacturing.
Industries with complex supply chains may also benefit from robotics. Consider, for instance, how robots might automate mine-to-port operations. Automated drilling and haulage from the mine would reduce the need for workers in remote locations, increase safety, and improve asset utilization. Driverless trains might transport the loads to ports, where robotic operators would load the ships using sensors such as visual and thermal cameras and lasers. The whole supply chain might be managed remotely from a control center that would manage end-to-end logistics, optimize operations, and minimize waste. Rio Tinto, a global mining-and-metals company, is already exploring these possibilities with its Mine of the Future initiatives, and it is realizing safety, efficiency, and productivity gains. The same concepts might be applied to the supply chains of other industries.
Nonindustrial applications are also emerging, changing competitive dynamics in sectors such as retail. For instance, Amazon.com, the world’s largest online retailer, paid $775 million in cash in 2012 to buy Kiva Systems, which makes warehouse robots. Small, fast, and flexible, these robots are constantly in action, moving large merchandise lots from shelves to the packing and shipping areas. Once a Kiva customer, Amazon acquired the robot maker to improve the productivity and margins in its massive network of warehouses and fulfillment centers. The move has helped Amazon maintain its low-cost advantage and stay a step ahead of the competition by providing a key advantage: the ability to offer one- and two-day guaranteed delivery for a wide range of goods. The company recently announced plans to increase the number of Kiva robots from 1,400 to 10,000 by the end of 2014, which could cut fulfillment costs for an average order by 20 to 40 percent. If Jeff Bezos has his way, robotic delivery drones will be next.
Megatrends affect different industries in distinct migration waves over time. For instance, e-commerce started with travel, books, and music, and then rapidly expanded into virtually every other product category and industry. The same dynamic is beginning to play out in the field of robotics. As prices come down and new performance thresholds are crossed, robots are migrating from industrial and military uses to the personal-service realm, taking on the roles of caregiver, security guard, and companion. Honda is investing in robots that will provide assistance to people such as the elderly or disabled who have mobility problems. In 2000, the company unveiled ASIMO (the acronym for Advanced Step in Innovative Mobility), a sophisticated humanlike robot whose wide range of motion allows it to run and climb stairs.
Agricultural robots, or agbots, are being designed to pick fruit and vegetables, to minimize harvest time pressures, and to prepare for the day when labor laws make it tougher to get large numbers of migrant workers to help with harvesting. Tracking M&A activity related to robotics shows that new players are entering the field. (See Exhibit 2.) For instance, Google has bought more than eight robotic-related companies in the last year, prompting speculation about its plans for the future. The Google car, which drives itself and has a virtually unblemished safety record of 700,000 accident-free miles, is approved for use in the states of California, Florida, Michigan, and Nevada. Inventions such as these hold enormous promise for the elderly and handicapped—not to mention improving the safety of our roads and the ease of our commutes.