Sunday, February 26, 2012

The Logic Behind Bailing Out the Auto Industry

By Frank Tobe, editor/publisher, The Robot Report

Pres. Obama, speaking at Carnegie Mellon University, June 24, 2011
"Today, I'm calling for all of us to come together- private sector, industry, universities, and the government - to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world... With these key investments, we can ensure that the United States remains a nation that 'invents it here and manufactures it here' and creates high-quality, good paying jobs for American workers."
Noble words spoken to a focused audience. But there is much confusion about why manufacturing is important, and even more confusion as to how robots - which displace workers - are necessary for America to retain it's competitive edge and manufacturing prowess.

The auto industry is a big user of robots and also a big employer. The extent of its collapse played havoc with communities all over the country where laid-off employees drained the coffers of unemployment insurance and didn't contribute taxes to the community from their wages and purchases. Aside from the pain of the situation and the myriad ways that it affected the people in those communities, the broad view shows how interrelated we all are to manufacturing - and to the auto industry.

The confusion and obfuscation from politicians has been constantly in the news. Since 2008, when President Bush approved a $17.4 billion auto bailout, the first of many loans that trailed into the Obama Administration, pundits and politicians have derided it, ridiculed it, and Mitt Romney mildly labeled it as "[the] wrong way to go" (without ever suggesting the right way).

Manufacturing is a critical component to the health of a country's overall economy. The most clear example of why this is is the trickle down effect that happens when a 3rd shift is added to an auto plant.

When automakers add overnight production lines, many companies, communities and individuals benefit. This is significant because at the lowest point of the economic crisis, most auto plants reduced staff and ran just a single shift; second shifts returned throughout 2011 and recently third shifts have begun. GM, for example, is adding more than 4,300 3rd shift jobs in four states.

The trickle down effect is described in a Bloomberg Businessweek article: A third shift typically requires about 1,000 autoworkers and creates about 7,850 spinoff jobs (7.85:1) ranging from police and fire workers to construction, retail, and restaurant employees. A night shift added at a GM factory also adds night shifts at childcare centers, cafes, bars and dry cleaners. Other service businesses stay open longer hours as do dentists and other professional services. Wages and taxes flow into the community from all these new workers. Sixty percent of spinoff jobs occur within a 60-mile radius of the factory where the new workers are employed.

Headlines Trumpet Big Jobs Gains by Deploying Robots

In a press release picked up by all the major news media, the International Federation of Robotics predicted that robots will contribute 1 million new jobs in this decade and will save another 2 million jobs from going offshore. Their commissioned study reported that:
In world terms, three to five million of jobs would not exist if automation and robotics had not been developed to enable cost effective production of millions of electronic products, from phones to playstations. 
Other headlines exclaim that robot sales in 2011 exceeded all expectations and that investment in robot installations surged globally in 2011 to 150,000 units sold - a year-over-year growth of 30%. According to WANTED Analytics, a real-time talent analytics site, there were over 2,100 U.S. job ads for robotics skills in January, 2012, a 44% year-over-year growth rate from 2011.


What are the figures for robotics? What happens when a robot is deployed in a factory?
From a presentation analyzing the Metra Martech Study
by Mike Wilson, Chairman of the British Automation & Robotics Assoc.
In a recent study commissioned by the International Federation of Robotics, the ratio for job creation was determined to be 3.6 for every robot deployed.

Jobs are created at the robot manufacturer's site, at the factory where the robot is deployed, and also at companies that install, configure and maintain the robots.

At the site where the robot is deployed, even though some jobs are replaced by robots, many jobs are preserved from moving to lower cost labor factories offshore. There is much evidence proving that with more robots, fewer jobs are lost. That's why Germany, with it's hourly rates almost 50% greater than in the US, has remained competitive: they have twice as many robots per employee as do the Americans. There are also ancillary jobs created at educational institutions that teach robotics, at robot component suppliers, and at engineering and consulting companies that provide integration services and equipment.

The IFR Metra Martech study showed that 300,000 workers are directly involved in the manufacture and operation of robots and an additional 3 million jobs were created in factories where accuracy and consistency could not be achieved without robots; and another 300,000 jobs were created where poor working conditions were overcome by the use of robots -- 3.6 million total. Most of these workers are in the electronics (1.2 million) and automotive (1.5 million) industries. Thus the Metra Martech study is suggesting a ratio of 3.6:1 based on the 1.15 million industrial robots presently at work around the world.

The study goes on to suggest that an additional 2-3 million jobs were created in situations where employment would be wiped out if manufacturing costs were not reduced [i.e. saving jobs rather than adding to employment]. This is a western industry problem, the problem of moving jobs offshore, caused in the past 20-30 years by the growth of industries in the low cost countries, particularly China and India. The report also adds another 3-5 million jobs created downstream by new products and services (jobs in the form of design, engineering, distribution, handling, marketing, sales, etc.) that wouldn't happen without the use of robots. It's a little far-fetched to add these two figures to the previous ratio but, if we did, then the ratio would be 8.4:1, a figure that is closer to the ratio in the auto industry (7.8:1) described above.

Projections for this decade in industrial robotics

In the next few years, as the cost of sensors and lightweight robots become more affordable and artificial intelligence enables robots to be more intuitive and trainable, the marketplace of industrial robot users will increase significantly. SME's - Small and Medium Enterprises - companies with less than 250 employees - will be able to acquire, train and quickly utilize portable robots to help them become competitive in the global marketplace by enhancing productivity with robots.

Also in the next few years, the use of industrial robots in Asia will change the number of robots in use dramatically. Foxconn, the component manufacturer and electronics assembler, recently began a program to build and install 1 million robots by 2015. If achieved, that will almost double the world's industrial robot population.

Beneficiaries and stakeholders of industrial robotics
  • Investors and risk takers who want a fair and stable return on their investment.
  • Those who make the robots want to work in a thriving industry with lively peers, good benefits and the promise of job stability.
  • Workers that make the components and ancillary products or provide engineering and integration.
  • Factory owners, by deploying robots, want to reduce waste, maximize resources, provide a better and safer workplace for their workers, and maximize efficiency and productivity to stay competitive in the global marketplace.
  • Factory workers who, through the use of robotics, no longer need to toil in dull, dirty or dangerous situations.
  • Factory owners also want to keep their factories nearby for control, to foster goodwill, and to be near a willing resource pool in and from the community.
  • Communities surrounding factories where taxes and wages spent not only contribute to the wellbeing of people in the area but also add income to the local governments (in the form of sales, income and property taxes) letting them invest in the infrastructure that makes everything work.
Bill Clinton, in a recent commencement speech at NYU, said that in the last 30 years:
Companies have come to operate as if they have obligations only to their shareholders. The problem is that if you do that you ignore the other stakeholders. That could be why wages have been virtually stagnant for the past 30 years, because workers are stakeholders and they've been ignored. It could be why communities have been unable to undertake economic transformations in many places, because communities are stakeholders and they've been ignored. It could be why customers don’t care so much what the source of their purchases are, they’re also stakeholders. and they've been ignored. [Transcription from video of Pres. Clinton's commencement address at NYU, 2011.]
A noble sentiment on which to end this article... but one that can be achieved if we understand that we are all in this together... we are all stakeholders and beneficiaries.

Monday, February 20, 2012

Seema Patel, fusing robotics and games with Interbots

Copied with permission from New Venturist.
Written by Babs Carryer, serial entrepreneur and Adjunct Professor of Entrepreneurship at CMU.


Seema never had any plans to go into business and never in a million years thought she’d start a company. But the opportunity fell into her lap and she couldn’t resist taking the plunge. Seema was always into robots. She participated in robotics clubs as a kid. Her family lived in Florida and they went to Disney World all the time. In the Magic Kingdom, she had her first exposure to robotics – moving human robots on the Pirates of the Caribbean ride. Seema was entranced by how expressive they were. She asked all kinds of questions to which her mom didn’t know the answers. Especially, “Is the hair real?”
Origins.  Seema went to a small college (Harvey Mudd) and took courses outside of her physics and psychology major in CS and robotics. She started a PhD program in robotics at Florida’s USF. She wanted to work on emotional expression in robotics. But she left after her masters because she realized that her interest was more in entertainment than research.
Googling for how to get a job in robotics and entertainment led her to the Entertainment Technology Center (ETC) masters program at Carnegie Mellon. Seema chuckles as she recalls that her question about the hair finally got answered: “All students at the ETC had a profile on the website and I mentioned in my bio that my big robotics question as a kid was whether the hair was real on Disney robots. And I got a reply from Disney saying yes the hair is real!”
Quasi the robot.  Students at the ETC do interdisciplinary projects and Interbots started as one of these. The idea was to create an interactive animatronic robot – Quasi: “He was designed to be autonomous and he had sensors. His behavior was affected by his audience. If you made him happy he gave you candy.”
Seema started to think that maybe they had something that went beyond a school project. The team was asked if Quasi could travel to NYC and conduct a press interview at an event: “Quasi wasn’t portable. He came back from events broken. So in the spring of 2005 we built Quasi #2; he was portable!”
One of the team members built software that enabled them to puppeteer the robot. The Guided Performance Interface (GPI) software allowed the operator to control much more than Quasi’s expression – they also controlled where he was looking, what he was saying, and how he moved. It was kind of an Oz behind the curtain, but it was wildly successful.
A few weeks later, a child interacted with Quasi for 20 minutes, about 15 minutes more than usual. That made Seema wonder if there wasn’t some commercial value in Quasi relating to children.
Startup.  By January 2006, with graduation and job offers looming, Seema decided to jump into entrepreneurship, figuring that she could find a market for her robot. Three others joined, all of whom were involved in the 13-member school project. Interbots transitioned from a project to a startup.
The team started out trying to create robots like Quasi but most of the business turned out to be events: “We did over 40 live performances. Kids came up to talk with him. We did that for several years, but that wasn’t a scalable business.” It was however, profitable.
Autism.  Several events had brought kids with autism spectrum disorder (ASD) in front of Quasi and Seema noticed that these kids responded to the robot. She recognized something powerful and therapeutic for ASD kids. But, at more than $50K to build, Quasi’s cost was an issue. Seema had a different thought, “What if we did a robotic toy?” Thus Popchilla was born.
In 2008, Innovation Works, a regional economic development organization awarded Interbots a $25K grant to create a prototype, software, and a website so that kids could share stories with others. An additional $157K of funding came from The Technology Collaborative. The team outsourced manufacturing to China to get a commercial prototype. The company also received $40K seed funding from Idea Foundry, another economic development organization that supports companies at the earliest stages.
By 2010, Interbots had a toy targeting the ASD market and a goal of a mass manufactured bundle for $500. The Autism Center of Pittsburgh rallied with a Sprout Fund grant $13K to do a pilot study working with therapists and autistic kids. The study went very well. Results were positive. And Seema decided to focus on autism as a market entry point: “It’s not the biggest market [about $227M in the US], but it’s real and Popchilla serves a need. That will lead us somewhere, I am sure!”
About one in 100 children is diagnosed with ASD. That’s 400K children in the US alone. Seema’s goal is worldwide distribution to the ASD market. And that’s a sizable number.
Interbots today.  In the fall of 2011, Interbots took first place at the first national Robobowl competition, winning $25K. Seema would like to raise $1.5M to conduct additional user studies and do a real launch.
The product has come a long way. Interbots sells a bundled package: the robot, software, interactive website, and lesson plans for therapists and teachers.
All of the data is streamed directly to the robot. Everything that makes Popchilla move comes from the device, an iPad or smartphone. Seema tells me, “You don’t need to change the robot itself. That means that we can take the same robot used in the ASD market but target it to other special needs markets. Maybe eventually we can get to the general consumer robotics space.” Seema envisions Popchilla selling as a retail toy for under $150.
Challenges.  Commercializing robotics technologies presents unique challenges. It takes more money, time and perseverance than other technologies:
  • Money – Funds have been a key issue for Interbots with a capitalization of less than $300K in the five years since founding. Seema tells me, “Consumer hardware is one of the most difficult things to raise money for. There is an obvious need here. No one before Interbots has made an affordable robot that fills this need.”
  • Time – The company is going on five years but is just getting out of the gate in a dubious commercial marketplace. It’s very satisfying to Seema and her team to make a difference for children suffering from a terrible condition, but can she make a strong business case for this entry point? It has taken a lot of time to get here and the road ahead still looms long.
  • Perseverance – Seema has a lot of stick-to-itiveness. I have known her for several years and every time I see her I see the determined glint in her eyes that communicates: “I WILL do this.”
For Seema and Interbots it has been quite a journey. And it’s only just beginning!
Copied with permission from New Venturist.
Written by Babs Carryer, serial entrepreneur and Adjunct Professor of Entrepreneurship at CMU.

Tuesday, February 14, 2012

Modex 2012: Robotic and smart technologies for handling material in factories and warehouses



In the emerging world of service robotics, many markets are opening to robotics that were once only handled by industrial robot manufacturers. Safely unmanned, or working alongside human workers, in a show focused on handling materials in the factory and also in the warehouse, Modex 2012, held in Atlanta (after 16 years in Cleveland), displayed the wares and solutions offered by 560 vendors and covered all aspects of picking, packing, handling and transporting material. Unlike industrial robots from the past, the newer robots displayed at Modex are able to adapt, easy to use and intuitive to operate.

After talking with many exhibitors, my impression is that there were more buyers than in previous years and those buyers appeared to be holistic in their approach to revamping their material handling in the factories and storage and pick and pack setup in their warehouses.

Their reasoning, and the underlying economic drivers for their renewed interest appeared to be:
  • a lack of qualified labor 
    • and higher labor costs
  • fear of the effects from the forthcoming retirements of baby-boomers
  • customized ordering via e-commerce requiring speedy and customized pick and pack
  • the availability of new sensors and lower-cost automation and robotic devices to augment workers and enhance their productivity
    • prices for these new devices and systems are holding steady or lowering
    • productivity enhancing concept systems from a few years ago are now proven and available
    • low interest rates make such investments even more affordable
  • mid-market companies can now afford material handling automation because
    • installation is easier and less costly
    • software and communication methods are more intuitive and easier to use
    • there is less need for costly integration assistance
    • they need to automate to stay price competitive with the larger companies
  • and... needed improvements have been put off because of the economic crisis and must now be renewed just to stay competitive
From left: Adept's Transporter, Intelligrated's bin controller, Kiva Systems' robot, Creform's AGV and Grenzebach's trolleys.
Although there were not a lot of robots or robotic components shown, their presence was implicit in all but the most utilitarian booths. For example, free-form vision-guided navigation (with collision avoidance) instead of tapes, ceiling signals and other path marking methods was openly praised and thought of as finally being of sufficient robustness, safety, speed and minimal programming, to finally become a realistic choice for material handling so many vendors were showing how they were adapting.

Vendors I thought of as particularly interesting at Modex included:
  • Intelligrated displayed their software integration system enabling every form of communication with the various automation devices, workers and robots involved in order fulfillment: voice, ViPR, regular barcodes, RFID and scanners, touch devices, tablets and pads, etc.
  • Kiva Systems novel robots, shelving and their Mobile-Robotic Fulfillment System were not only widely viewed at the Kiva booth but discussed or compared in many of the other booths as well. One interesting tidbit: Kiva gave an iPad to visitors to their booth so that they could place an order which, seconds later, they were able to pick from the movable shelves brought to the user. Very cool.
  • Egemin Automation showed how their warehouse management software system integrated with other manufacturers automation, conveyor devices, and palletizing equipment in addition to Egemin's own line of AGVs.
  • Daifuku Webb displayed their Smart-cart line of AGV tugs for pallets of materials, shelves and containers, and emphasized the flexibility and safety needs of an active warehousing center.
  • Adept, which is in the process of expanding its product line from solely industrial robots to products in the service sector as well, introduced their new mobile transporter/courier. They showed how their mobile devices were integrated into Swisslog's hospital and healthcare product line and also how their motion controller module is the navigation and collision avoidance system within RMT Robotics' ADAM line of mobility robots. A few other companies also offered similar vision/navigation/controller modules.
  • Frog AGV Systems, like many other AGV systems providers, has improved their navigation methods and software and is selling components and modules to OEMs. 
  • Systems Logistics, a European full-service provider, demonstrated an automatic picking station for mixed SKU skids. This feature - mixed SKU and inverse loading - was talked about all over the show as the "new" cost-saving way to load pallets and trucks for expeditious delivery. 
  • Seegrid Robotic emphasized the significant cost savings and productivity enhancements of using robotic forklifts and other tugs, tractors and trolleys. Their special value-added offering was a AGV learning system where the system's vision-guided navigation system learns the moves and layout from a human driver. Seegrid, like many others, is offering their navigation and vehicle control system as a module for other companies to incorporate into their existing systems. 
  • Creform had a line of modular mobile devices for moving lightweight carts, trays and platforms and their low lying robotic devices were similar to a few other vendors like Grenzebach's automatic trolleys and platforms and Transbotics' transportation robotics.
Brad Berger, editor-in-chief of SupplyChainBrain magazine, said that investing in automation for material handling is back after many years of being put off because of the economy. Buyers are creating smart warehouses where RF, voice, barcodes, tablets and software all work together seamlessly as tools in the bigger picture of moving, handling, picking and packing our materials and products.

As an aside, and with a focus on which companies will lead this new world of robotic augmentation of material handling and the workers involved, Adept Technology (NASDAQ:ADEP) appears to be moving toward bridging the gap between industrial robotics and the very real need for safer, more flexible, vision-enabled, mobile and easily trainable service robots. Today they announced a collaboration with Willow Garage to harness Willow Garage's ROS (robotic operating system) so that new methods can be used to control, simulate and program legacy industrial robots. Through acquisitions and business acumen and software changes, they seem to be successfully entering the service robotics sector adding those extra values - along with robustness, durability, connectivity and ease of integration that the industrial robotics manufacturers presently provide.

18,000-20,000 people attended Modex 2012 - 10% were international visitors. There were 560 exhibitors in the 170,000 sq ft space. Very impressive, very busy... and very tiring.