Gotta love robots, but they’re killing the workforce, experts say

I was saddened to learn of the October demise of the small-but-innovative ReThink Robotics, maker of the industry’s coolest cobot (collaborative robot) buddies, Sawyer and Baxter. The company went under in October 2018, but was soon rescued by a new parent, HAHN Group, which plans improvements to help rebuild the business.

In mid-2016, the business was looking up. Jim Lawton, chief product and marketing officer, told me ROI was as low as 1.5 years and customers including Du-Co Ceramics hailed the one-armed Baxter’s speed and flexibility as well as short installation time, under a month.

At one Tier One automotive supplier, a single a robot replaced 20 hours of manual labor a day, Lawton said. “We’ve now got one robot doing the same tasks; $25,000 for the robot, and a little bit for the grippers, and we’ve saved them $180,000 a year.”

Robo-brothers Sawyer and Baxter at happy hour: They have a new parent in Hahn.

ReThink sales were disappointing, not because demand was low but because of technical shortcomings, according to RobotReport. In fact, the money keeps flowing in to help seed smaller innovators like ReThink every day. Venture capitalists invested more than $12 billion in robotics in 2017, “more than doubling the previous year’s record tally of over $5 Billion,” a far cry from @200 million in 2008, per Forbes, quoting KPMG research.

The U.S. middle class: Doomed? 

I’ve spent many years writing about all manner of industrial technology, and have heard many, many people in the world of automation, controls and IT explain how new technology creates new jobs to displaced those supplanted by automation.

With each new technology, jobs are created because someone’s got to fix, program and maintain The New. So while I’m saddened by the trouble some tech companies have, I’m absolutely mortified by some cold realities for the U.S. manufacturing base, and the middle class.

As one Clorox exec said at an event I attended, “every” manufacturing company has for years been busy automating and “leaning-out” its lines. And a Kraft Foods alum noted that it’s commonplace for a company to add a few robots to replace upward of “100 people on a Lunchables line … picking up stacks of pre-sliced meat and pre-sliced cheese.” 

Experts including academics at MIT, whose article, whose article, “How Technology is Destroying Jobs, debunks the conventional wisdom that robots and automation are net job creators. TechCrunch puts forth the paradox that “Technology is killing jobs, and only technology can save them.” Time will tell. But at present, the problem’s pervasive enough for others to project that the federal government could be forced to offer a welfare-like Basic Universal Income entitlement, Fortune reports.

There just ain’t no “i” in TEAM

Forgive me if I’m ambivalent. I love to hear stories of happy employees and positive corporate culture, but I’m pretty jaded. Especially when I read captions like the one in this photo:

First of all, these good folks are essentially identical, down to their garb (as required by sanitary food handling rules). Their jobs are the same, too: They’re charged to comply with the same set of standards procedures to meet the singular goal of their employer.

From an employer’s perspective, robots make sense. They don’t require benefits beyond regular maintenance. They don’t call in sick, come to work late or hung over on Monday morning, or have pesky human children and families who demand an occasional vacation or day off.

We are our only hope!

Humanity is a messy, analog affair—just ask your friendly neighborhood Borg collective. There are limits to how far companies should go to, as the caption suggests, really “be themselves.” They can’t write poetry, play guitar, do needlepoint or plot to overthrow the robots while toiling on the line. But I still hold out hope that we need human beings to provide creative thinking not just at the strategic management level, but day to day, hour to hour. 

Almost a decade ago I worked closely on a project to help a manufacturing VP at Snyder’s-Lance document a major transformation in corporate culture. Using human brainpower, his Charlotte, N.C., team slashed production changeover time to save more than $300,000 annually; reduce scrap 40 percent; reduce customer complaints 41 percent, and do lots more good stuff.

I’ve written dozens, maybe hundreds of stories about how people working together can do things no artificial intelligence can do. The managers who’ve told me of these stories really mean it! So I mean no harm to the editor of the magazine who ran the above photo/caption. We just need to do better, lest we automate so many jobs out of existence, there’ll be nobody to by the stuff our manufacturing companies crank out — and then even they’ll become automated out of existence. 

Hey, human race…good luck.


Related stories from the Field Office archive:

Gibson bankruptcy: bleeding money, seeking redemption

How many brands do you know that started with a whiff of cool, grew too big and fell into the AFAB (anything for a buck) trap? I’ve joked about Fender and Gibson air fresheners hanging from dollar store and car wash pegboards alongside their Playboy and pine tree cousins.

That day is here. Following years of expansion, extension and massive cheapening, Gibson filed for bankruptcy on May 1. And it may spell a better future for the only thing the company ever did that mattered: making great musical instruments.

Founded in 1902 and once-again privately held since 1986, Gibson lost its focus, found itself $500 million in debt, and is on the cusp of taking a $135 million loan from a new conglomeration of fund managers and bond holders. It’s a deal that’ll likely hand ownership to people who don’t know much about Gibson’s “120 Years of Innovation.” (As documented in Gibson’s  timeline.)

As musical friends reacted (no doubt worldwide) on social media, I found my gut vacillating between the sentiments expressed by two musicians in my hometown, Chicago:

“Rock is dead.” — Doug Hagman

“…if you are looking for Gibson, there are 20,000 hanging on music store walls as we speak. And that doesn’t include Europe.” —James Chrzan

Doug’s got a point; today’s guitars are something of an automated, high-tech echo of the design and handiwork of Les Paul and other greats, and company ownership has shifted to a conglomeration of investors. But James is also right. Those who want and can afford a Gibson can find a huge selection at music stores both brick and mortar and online. If they’re made well and play well, great. If not, there are many other companies large and small making guitars the old fashioned way.

Headlines like the one Rolling Stone ran on May 1 — “Iconic Guitar Brand Gibson Files For Bankruptcy” — were perfect for causing hand-wringing by Gibson aficionados.  But the deck (subhead under the headline) immediately followed: “Company will refocus on its musical instruments, shedding its audio and home entertainment business.

Part of me — and many others — resent pure financial plays by investors whose moral fiber has no any steel strings attached. Other headlines similarly told a more cheerful story, such as Bloomberg’s “Gibson Files for Bankruptcy in Deal to Renew Guitar Business.” That’s the sentiment that led me to opine that the Gibson filing might be good news:

“If they shed stupid businesses like the boom-box business it bought from Philips, AND if all the good people don’t quit or get fired (or escape to Heritage Guitars!) — Gibson can restructure and get back to making guitars.” [More on Heritage below in this post.]

Yeah, just one idiot’s opinion. But by “stupid” I refer to Gibson’s 2014 acquisition of Philips’ the audio, video, multimedia and accessories business, which turned out to be a financial albatross. At the same time, companies need to make money to stay in business, and the guitar business, with sales of $5.6 billion in 2017, has been relatively flat for years. It’s just not that exciting to investors. (Gibson’s lucky a few care enough to step in with loans.) As for firings, Gibson in March planned a pre-filing workforce reduction of 12-15%, following layoffs already made to its Custom Shop, Digital Music News wrote last month. That is NOT how a company seeking to shed non-core businesses treats the braintrust of its core business. It smells more like a move by execs who are about to pack their golden parachutes and bail out before the axe falls.

MarketWatch provided some good insight early in the bankruptcy filing news cycle with the “day-of” (May 6) story, “As Gibson files for bankruptcy, are people falling out of love with guitars?”  Another, filed May 10, provided more insight into why guitar companies are struggling and how to revive them. In that latter story veteran guitar pro Stevie Salas, said, “Gibson was pressured to get super-rich and they made moves that can destroy companies.” He lamented moves from Gibson, Fender and others watering down their brand image by slapping their names on $99 guitar packages sold in big-box and club-store retailers.

Writer  added that “cheapening an iconic brand while at the same time raising prices through the roof is no way to engender loyalty by a new generation of musicians.”

Today, if I want a Gibson electric, my gut tells me to turn to Heritage Guitar, a spinoff formed in 1985 by employees who bought Gibson’s original Kalamazoo factory when Gibson moved to Nashville. Heritage has done only one thing: make  high-end American electric guitars. Surely THEY are heart and soul of the old Gibson we love, right?  

Heritage Guitars: following in Gibson’s footsteps?

Heritage was 0ff to a great start, but in the 1990s it stopped advertising, lost sales and nearly shuttered the 90-plus year-old factory in 2007 — until, according to a Michigan news report, a local lawyer turned co-owner became a “guitar hero” and saved the company.

The company changed hands again in 2016, and in the fall of 2017, the new management team inked a partnership with Rolling Stone and a real estate developer to create at tourist shrine at the factory aimed at “incorporating a wealth of music and pop culture into a multimillion-dollar renovation” to possibly include a live entertainment venue, instrument store, museum, recording studio, restaurant and rooftop bar,” according to a news report. 

My opinion is that we don’t need another Hard Rock Cafe, we need companies that make amazing guitars. Well, actually, we need people who make amazing guitars.

Early this year, Heritage — which I thought was the soul of Gibson —fired 10 craftsmen and more quit in protest as the company automated with multi-axis  CNC and PLEX machines. I love automation, it’s a tough call to bash it categorically but man, is nothing sacred? Maybe it’s okay, maybe not. But increasingly, artisans are being left out, as expressed in the March 1 headline, “Firings of craftsmen take heart out of Heritage Guitar, workers say.” If Heritage was the heart of Gibson, and some of the best people have left, I hope they keep making guitars, either by banding together or working as sole artisans…for those deep-pocketed musicians who can afford to support them.

The grass ain’t any greener at Fender

Roughly analogous to the Heritage/Gibson relationship is that of that other iconic guitar company, Fender and spinoff G+L (The “L” being Leo Fender. Like Gibson and now Heritage, Fender and G+L use CNC and PLEX technologies.

Back in 1965 when Fender sold out to CBS, purists decried the change. They were right to in some cases, including the devaluation of classic amps like the Twin Reverb amplifier and others whose circuitry was “enhanced” to be cleaner, changing the nature of the amps’ trademark growl. In 1985, employees purchased the company back and today, a holding company of multiple partners runs Fender. And like Gibson, Fender has made many acquisitions. One I see as particularly ugly is the 2011 partnership with Volkswagen to put “Fender Premium Audio” into cars. You don’t play it like a guitar, you play it like a car stereo.

So many brands have turned themselves into crap over the years just to make a Faustian buck. Of course, expansion and globalization has had various merits, business-wise for years (though my focus isn’t on them at the moment). In the 1970s, Japanese then-upstart Ibanez made a mint making cheaper knockoffs of Gibson’s Les Paul guitars, and over the years leading brands offshore their own knockoffs to Asian factories, even G+L. Rather than going into that tangled knot, help yourself to two good if aging articles I found, one from Acoustic Guitar  (2014) and another on USA vs. Chinese guitars from Guitar Player (2013). If they ask me to write, I’ll update them!

The cycle of innovation

As old brands face shaky prospects for rebirth, new startups should emerge to take their place. New growth in the form if small startups that succeed will always end up changing hands in the natural course of their lives. Retirement, death and other drivers of succession are just part of the corporate, and human, nature.

But it doesn’t have to be that way if companies can be innovative without losing their souls and core consumer/user proponents.

Any number of papers, presentations and tutorials are available to leaders who want to stay leaders. Just search “innovation management” or “cycle of innovation” and you’ll find links such as  the American Society for Quality’s Innovation Management Cycle and the “3 Key Principles for Maintaining a Cycle of Continuous Innovation” from Chief Executive magazine. In the latter, the first principle is: “Start at the top,” with the CEO leading by example. That doesn’t mean there’ll be greater handmade content in the products coming out of guitar factories. A case in point: Gibson’s G Force “robotic” (self-tuning) guitars. But it does mean, at least, that the Gibsons, Fenders of the world will have a better idea how to balance the need for profits against the effects of innovation on brand loyalists.

Love the instrument before the company

I admit it’s painful when something like the Fender Stratocaster name is whored-out to Asia and Mexico to capitalize on the iconic guitar name and shape, but there are still “American Original” Strats for the purists. It’s just the nature of things.

In the late ’80s when I bought my Strat Plus in its debut year, I was choosing between that and a G+L, and chose the Fender because the G+L was heavy as hell…great sustain but heavy as hell. The neck wasn’t lined up with the strings as perfectly I thought it should be, so I went back to the music store where Larry, the guy who sold it to me, gave it a whack it to straighten it out, and said, “They’re all like that.” I wish I paid better attention to G+L but I still have my Plus and pretty much love it. 

In 2003 when I bought a Hofner Jazzica archtop hand-crafted in Germany and finished in the company’s violin shop. The label inside the F-hole indicated that it was “No. 1 of 50” of a limited run for the year. That year, the company’s musical instrument division was sold, sold again and a year later, sold again. A few years later Hofner established in 1887 and made famous by Paul McCartney’s “Beatle bass,” was making Jazzicas identical to mine in a factory in China. It bugged me a little to see the Chinese models hanging in a shop, but for me, it’s the feel and sound, not the look (despite its hand-rubbed violin shop finish) that makes my guitar what it is.

Hofner has changed ownership about as often as I change my underwear (well, not quite), and I sleep very well at night knowing that I have a quality instrument. The location of the factory making newer versions doesn’t affect te quality of mine. 

There will always be artisans making quality guitars — for that matter, making all manner of good things. I suppose we’ll just have to do our best to have the things we like, and can afford, while doing our best to support the artisans who care about the work they do. As big names rise, fall and regroup, smaller shops will continue to spin-off, emerge, innovate.

 

 

Retail analytics: Here’s lookin’ at you, kids

I recently reunited with FoodOnline.com to write a story on Big Data analytics in the retail food supply chain. The first bylines I had for that site were in 1999, when I was Editorial Director for that related sites — before the big bursting of the Internet Bubble. Accenture’s Stages of Analytic Capabilities

When the Internet was new, there were no iPods, let alone iOS, Android or Bluetooth-powered beacons; Big Data was just a gleam in its young Business Intelligence mother’s eye. And retailers had no idea what to really do with their Business Intelligence systems. Those who finally do, today, see BI as old news as analytics — predictive and now prescriptive — come into their own, powered by Big Data and cloud computing.

Today, as an exec from SAS told me, a shopper who stands in front of a Nescafé display for more than 10 seconds might just get a virtual tap on the shoulder, or rather a bzzzz in the pocket, with a coupon to get that package of coffee off the shelf and in to the cart.

My favorite interview in this story just might have been Nick Hodson, former head of strategy at Safeway Stores and current leader of the North American consumer and retail business practice of Strategy& PwC, who reminded me that the technology isn’t at all the point of progress so much as creative minds who come-up with new things to do with it. Yes, major retail marketers from Walmart and Nestlé may well fave a backlash over privacy concerns if opt-in/out issues aren’t handled correctly, but these times sure are interesting. Read all about it in my story, ” Predictive Analytics Helping CPGs Reach Individual Consumers.”

A DYI ‘shroom farm? A fish-tank herb garden?

“That’s the most disgusting thing I’ve ever seen,” the Whole Foods buyer told Nikhil Arora, who opened a big & stanky bag-o-fungus in the buyer’s office. To the young innovator, that bagful was the crown jewel of a new product he’d liken to a “next iPhone” for natural products fans.

He was kinda right, as you’ll find out if you read the story — “Home mushroom farming, fish-gardening and other supply chain collaboration challenges,” — that I wrote when I saw Nikhil in my travels on the packaging beat. Over the next few years he found the right suppliers for his DIY mushroom kits and then a cool aquaponic fishtank-meets-herb-garden kit.

New product to bow end-February 2015.

New product to bow end-February 2015.

Now he Alejandro Velez, co-founders of Back to the Roots, are at it again; they’ll unveil a new product on February 26th.

What’s it gonna be? I don’t know, but I couldn’t be happier to see these folks start so small and gain national distribution so quickly with such simple, honest ideas.

Rock on, guys.

Industry compliance to FDA Food Safety Modernization Act flying high

How's the FDA's new food safety rule affecting how food gets packaged?

How’s the FDA’s new food safety rule affecting how food gets packaged?

One of the hats I’ve worn of late is that of Editor of Packaging World‘s 2014 Food Safety Playbook for 2014 (as well as the preceding, inaugural edition).

Among the updates packed into the 101-page e-book were the results of a brief survey of U.S. food and beverage product packagers done in Q1, gauging industry readiness for the U.S. Food and Drug Administration’s Food Safety Modernization Act (FSMA) now being implemented in rolling deadlines.

The results were optimistic; a large and in some aspects overwhelming majority reported that they have already completed the law’s key requirements into their food safety plans, or will in the coming year.

Since this blog is open to all who click, I’ll say that there’s a LOT to the law, the industry’s reaction, overall compliance and issues that’d have lay-people wondering: “What does it all mean?”

In general, I think the law’s a good thing. If you want to discuss in depth, I’ll invite you to read the whole playbook, or be smart enough not to have to — in which case I’ll refer you to someone with first-hand knowledge of the law, and of food safety. I was once certified to be a food safety guy in the dairy industry, but really, was no expert. Ever.

If you’re interested in reading more, here’s a link to more on the survey.

Be forewarned; I don’t divulge all of the results in this story, but there is a link to the full playbook at that link. If you’re in the industry, I hope you won’t mind having to register to get the playbook for free.

iPhone app for prescriptions seeks to tap a new-ish $100 billion market

Goin’ mobile: How many people never fill that first prescription? Not to worry; there’s an app on the way for that, too — GetMyRx — as we reported in this story at Pharmaceutical Commerce.

getMyRxDeveloper GetMyRx Inc.’s CEO Luis Angel says “at least a few hundred” scrips have been filled” since the iPhone app’s soft launch in the Miami-Dade, Fla., market in November last year. The app links to fee-paying pharmacies in Angel’s network, as opposed to a single store or chain, and lets people enter data or scan labels as well as insurance cards, coupons and related discount cards. New York and San Fran are top-priority markets for rollout perhaps by summer, Angel told me.

This and other moves by chains are hope to combat patient abandonment issues surrounding initial prescription fills, which a Harvard study indicates may constitute 30% of patients and Angel says has gotta represent a market worth at least $100 billion.