Robotic Automation: Can service industries learn from manufacturing?

I gave a speech at Intellect‘s Automate Britain launch on 30 Jan. Here is the transcript.

Intellect Automate Britain Campaign

My name is Alastair Bathgate. I come from a process improvement background. This is me in 1985; in charge of Time and Motion at an NGA and SOGAT82 unionised print factory. (If you want to learn about labour relations in the context of industry automation, take a TARDIS back to the post Eddy Shah 1980s printing industry.)

Having spent so much time stressing over minute improvements in manufacturing, a career move to a bank drew a stark contrast in the apparently relaxed attitude to process efficiency and product quality. I remember an article in the internal staff magazine where a team leader was trumpeting the significant increase in productivity created by the installation of a brand new mainframe terminal, the cost justification for which had taken several accountancy man years and the IT lead time approximately 6 months. The year? 1988. It was the second ever piece of end user computer equipment installed in the 200 FTE savings administration department at Bradford & Bingley. I worked in a fledgling O & M department.

Today, I am CEO of Blue Prism, a British software company pioneering software robotics for the back office. I founded Blue Prism to address the frustration operational managers have in making simple process improvements and the observation that the only way to address the problems was to employ staff…somewhere in the world.

I thought it would be good to start with a little history of robots in manufacturing.

Unimate is generally acknowledged as the first industrial robot – installed at General Motors – its primary role was safety driven – transporting hot die casts and carrying out spot welding where risk of injury to mere humans was high.

The car industry continued to lead the charge and by 1979 had the confidence to shout about robotic virtues publicly. But the 1979 Fiat Strada advert “hand built by robots” was arguably more seminal in advertising history than robotics – the cars were the automotive equivalent of a Ratners sherry decanter. And when the film crew turned up at the factory in Turin to film the commercial, they found the entire workforce (but presumably not the robots) out on strike.

By 2001 the Japanese were proudly boasting a factory that needed no lights, air con, or heat. The company, named FANUC, makes (you’ve guessed it) robots (with robots). Arguably procreation rather than manufacturing. No wonder the lights were out!

The serious point here is that in 50 years we have come a long way, enabling truly agile and economic engineering and we’ve taken it from Model T linear production lines to mass customisation where every customer can have their own variation on the standard model, and this is delivered cost effectively and to exacting quality standards. According to the International Federation of Robotics there are now 1.1 million working robots in the world. In car manufacture, for instance, about 80% of the production is completed by machines.

So, what has the impact been in service industries to date?

UK Productivity

These numbers from the Office for National Statistics show a stark difference in productivity improvements between manufacturing and service sectors and in this golden age of enterprise software beg the question, if computerisation is so good, why do service industries still employ so many staff?

In fairness the services industries do now value service quality and efficiency and early process improvement efforts have already borrowed Lean and Six Sigma from manufacturing with some success in reducing waste and improving quality. Can we borrow the concept of robots to see if productivity can be improved further and faster?

The best definition of a robot I could find (Dictionary.com) is “A machine or mechanical device that operates automatically with human-like skill.”

Virtual clerical robots are not made from metal and rubber – they are invisible software, but they act like humans to complete certain tasks. They sit on a virtual PC in a data centre and are programmed to complete repetitive tasks by interacting with systems in the same way that humans do.  I think everyone can appreciate that there are certain tasks that robots are good at, and also some constraints.

Robots are not great (yet) at judgmental/visual processes like comparing signatures. Despite advances in NLP they are still somewhat semantically challenged. But for more mundane rules based tasks they are ideal.

Consider a bank who has become aware of a fraudulent customer. It is quite a short (but expert) judgment to confirm the fraudulent activity. But once complete, the admin to close all the accounts and facilities and complete the reporting obligations is significant, and time is of the essence. What if the agent could simply delegate this procedure to a team of back office robots to complete, quickly and accurately? The agent is then freed to focus on higher value work like evaluating the next potential fraud.

So why aren’t robots already ruling the service world?

If you Google a few robotic, software terms, it is clear that clerical robots do not have a 50 year history. These examples show that there are some pioneers out there, but they are hardly behemoths. One company caught my eye when they were mentioned alongside us in last weeks Economist. IPSoft’s mission is to create virtual contact centre agents that use autonomics to “learn” to communicate with customers. As you can see there are a couple of similar plays in terms of front office robotisation.

So, if the technology for service sector robotisation is starting emerge – is there an opportunity for UK plc?

I’d like to finish off by posing the question: “Can the UK grab the opportunity to become a robotic centre of excellence? And if so, how might this affect the offshoring industry?”

As James Slaby of Horses for Sources, a sourcing analyst quipped – the next big offshore destination is Robotistan.

The good news is that clerical robots are already on the rise and the UK is leading the adoption across various service sectors. As far as Blue Prism is concerned, we are proud to be working with service industry leaders, forward thinking BPOs, and early thought leaders like Virtual Operations and Genfour who are examples of UK based startups just starting to deliver on the “virtual offshoring” vision.

Examples are already starting to emerge of companies who have repatriated offshore jobs and by using a combination of robots and smart people have created operations teams that produce better quality at lower cost than offshoring. And in the process creating UK jobs.

Freeing human beings from menial chores to enable them to focus on higher value makes sense. 50 years of manufacturing experience has taught us that robots are flexible, scalable, fast, reliable, accurate and LOCAL.

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