In this RoboBriefing podcast, Managing Editor Steve Crowe talks with Terry Hannon, chief business development and strategy officer at Adept Technology.
Hannon explains why logistics automation has evolved from autonomous guided vehicles, or AGVs, to autonomous indoor vehicles, or AIVs.Adept’s Lynx is an example of how these AIVs are now able to deal with dynamic manufacturing and warehouse facilities. Users are more and more likely to use fleets of these robots, he says.
The supply chain is becoming more efficient through lean manufacturing and similar practices. In response, robots are getting smarter and smaller, making them safer to work alongside humans, explains Hannon. What are the potential savings?
Listen to this exclusive podcast to hear Hannon’s thoughts about how mobile robots are moving into markets beyond warehouse automation, for example, the service industry. Be aware that the return on investment must include the staff time and potential savings.
In addition, Crowe asks Hannon about where he sees the most demand, competition, and barriers to entry. Learn how Adept plans to meet customer expectations with its robots.
Steve Crowe: Hey everyone, welcome to the latest edition of the Robot briefing podcast. My name is Steve Crow. I’m very excited to welcome a special guest into today’s program. Please welcome Terry Hannon, Chief Business Development and Strategy Officer at Adept Technology. Terry, how are you?
Terry Hannon: I’m great Steve. Thanks a lot for having me.
Steve Crowe: No, thank you for joining us. Today’s discussion is about mobile robots so who better to join us than you. Our listeners, you know, they might know mobile robots as AGVs which are really well known for transporting materials in manufacturing and warehousing. Adept has the Lynx mobile robot which you guys consider an AIV or Autonomous Indoor Vehicle, just explain what’s the difference between the Lynx AIV and the traditional AGV out there on the market.
Terry Hannon: So, Steve, AGVs have been around for since the 1950’s was the first incarnation, and those vehicles, I mean the AGV, standing for Automated Guidance Vehicle, were really designed to be line following, either magnetic lines or colored lines or they were used to follow even magnetic lines so wires that are buried into concrete floors or individual magnets that are buried under concrete floors and more recently laser tracking. So where lasers are mounted on a particular vehicle and they use reflectors that are engaged as part of the infrastructure in factories and they can track their way around buildings.
So, that’s the older technology and that technology really limited those vehicles to operating along particular very well-defined paths, whether they were paths because they were line following or they were paths because they were actually trained to follow a particular path.
And those are kind of very good for a lot of applications and for particular applications that just require kind of door-to –door, A to B progression of materials. So they can be absolutely the right choice. And they have been around a long time so they are pretty well trusted technology.
What people are asking for now is something different. I think what our customers are asking us for is, first of all whenever you do an installation of a vehicle to transport goods, they say ‘no workspace retrofit required’. So no infrastructure changes, no burying things in the ground. No installing tags and all those other things that require kind of time and expense and usually bringing operations to a halt while they’re engaged. Second thing is, that these vehicles have got to be safe operating alongside people. You know, with a lot of these vehicles that are out there right now they actually have dedicated areas that they have to roam in and where people are not allowed, so pedestrian-free zones.
The other thing is dynamic environments. All of these environments where these vehicles are actually put into right now and are going to be added to are very dynamic. And by dynamic we define that as being an environment where things change constantly. So shelves are getting emptied and filled within hours, vehicles are getting parked and moved, boxes are here one minute and gone the next, so things where you have a lot of dynamic environments and packages and people moving around.
And lastly, which is important for people, is that they would like to have vehicles that operate as a fleet. So, we don’t install vehicles typically in environments that just have a single individual task going to and fro. Typically the tasks that are required require a fleet of vehicles or multiple vehicles that actually engage together, work together in harmony to actually complete a list of tasks or movement of materials. So, those are all things that are now required by people as they move forward with lean manufacturing and they try and make their processes a lot more efficient.
So that’s why we came up with this technology we call the AIV or Autonomous Intelligent Vehicle. Some people call it the Autonomous Indoor Vehicle. But really, you know, the autonomous nature of it is very important. And for us autonomous means all of those things that I described: no retrofit, works safely alongside people, it can plan its own rides, all of these other attributes.
But what I mean is that the vehicle actually has to operate by itself, can be sent commands remotely over Wi-Fi and can figure out how to get from A to B to complete whatever task has been assigned to it. And it can’t get held up if there is something that has just been plopped down on the floor in front of it or it can’t get held up if a particular cargo area is blocked. Our customers expect that these vehicles will actually, whenever they are assigned a task, will complete the task no matter what. So if one particular entrance to an area is blocked at any given time, the vehicles are going to be intelligent enough—there’s that word again the AIV, the intelligence has to be there—for the vehicle to be able to navigate in and around factories using different methods or different corridors or passageways in order to get to their destination. That’s the intelligence part of this.
The other aspect of the intelligence, if you look at the canopy, are the software controls that operate these AIVs. It’s actually how they operate as a fleet. And operating a vehicle as a fleet, means that a customer really just has a list of tasks that they need to have done. I say I need these materials moved from here to here and then a couple of seconds later I need this from there to there and just a litany of tasks goes on and minute after minute, after minute, they just stack up.
So the vehicle fleet itself has to have the intelligence to be able to parse these tasks down to deliverables and then assign them into individual robots that are capable of those particular tasks to go then and work in harmony together to figure out what the best and fastest way is to complete the task. So that’s the level of intelligence that’s required, and our definition of autonomy that fits into these workplace environments.
Steve Crowe: You touched upon this a little bit, but just describe an ideal used case for AIVs in the manufacturing space. You know, what benefits do they provide for how the materials are moved today?
Terry Hannon: You know, there is a case that’s been happening—- it’s not really a case, it’s more of a methodology change or change in processes that’s been happening in the manufacturing industry—where typically in the past, for any assembly line there’d been large number of sub-assemblies or parts or components that were available line-side, usually on racks, and then these will be kind of brought to the manufacturing line deployed on whatever was being assembled and then moved on down the line.
So what’s happening now, there are a multiple things that are happening. So first of all assembly work areas are shrinking. People are trying to get more efficient with their factories so they want to deploy more particular manufacturing lines under one roof. So you don’t have the luxury of all the space that you had before.
So the transition has been, kind of we’re seeing the first stage, where instead of having forklifts delivering large and massive materials at line side, which would take hours or even days to actually be completely depleted, there has been an interim step where people use tuggers, so vehicles with a couple of carts one the back that will actually transfer inventory from store areas to line side and then they are deployed onto quite large gravity racks for example, but a lot less packaging, a lot less pallet loads sitting line-side. So that was the kind of interim step.
So now you know in the true methodology and implementation of lean manufacturing, people want to have much less inventory that actually has dwell time line side and even want to have it in the form of kits. So, kits are the ultimate way to actually have inventory line side. So if you have, for example, if I was to use automotive: So if you are manufacturing a particular car in a long line of cars in the production line, each car is going to have different options, different colors, different brake types, different stereos, all these different components fit in there, that are all kind of variables.
So having kits delivered to line side where you just have the exact inventory that is required for that particular vehicle, frees up a lot of space line side and it makes it an awful lot safer. We are not having these forklift trucks, for example, and you’re not having these tugger vehicles swinging around delivering large amounts of inventory and then moving on.
So that’s kind of one example or one transition that we’re seeing and if you look at the data on lean manufacturing, this methodology really reduces the need for people to be doing this transport task by at least 20 percent. So, we know that in the automotive industry people like you know, GM, they are trying to re-shore production plants. We’ve seen that happening. People like Chrysler, they are driven to improve their process design and kind of do what’s called remote keeping: reducing errors, improving ergonomics and improving throughput to try and, you know, basically their demand is going up and they need to do things under the same roof.
And the same thing even in Europe. Nissan and Volvo, you read about them, they call it simplification of logistics to production line. So they want to move away from what used to be called this direct sequencing or large dumping of material line side. So having vehicles that can deliver these kits and smaller, lighter materials and more rapid inventory moves. It’s kind of very in line with lean manufacturing.
Steve Crowe: I got to ask you this, I’m sure everybody listening is also wondering the same thing, how many Lynx AIVs are zipping around the Hannon household delivering all the necessities for the outdoor parties, the outdoor barbecues, the beautiful California weather here. How many of those things you got zipping around?
Terry Hannon: Oh I’d love to say that for the fourth of July I have one for Trident and one for Coronas but not just yet. You know, it’s funny you should say that because in the service industry, it’s has been an industry that has reared its head. And we kind of look at it with a little bit of caution because whenever you’re dealing with service and hospitality, you’re interfacing directly with customers. And whenever you interface with customers then there’s a very strong element of like or dislike in dealing one-on-one with the robots. So you’re always kind of careful about how you approach the market and how you would even begin to forecast this market.
But one of our customers that we recently announced back in May, they actually have started to deploy robots into the service industry and one of the first applications they have is inside a restaurant as delivering food. So it’s one of these restaurants where its customers they deploy iPads, for example, on each one of the tables. The customer can order the food and then the mobile robot will come out of an enclosed environment, deliver the food and the environment will open up and your food is presented to you and you just can take it off the table. So that has already started and you know, there’s a decent business there. And this company that we’re actually dealing with, Techmetics, they are looking at other aspects of the service industry as well.
And other aspects include, if you can imagine, whenever you start to look at conference centers and very large hotels, you know, whenever they have functions, the amount of material transport that’s in there that is hugely manual: you know, moving all of the table cloths and then all the cutlery, all the plates, all the tables themselves, chairs, all these various things require people to actually stack them on the carts or whatever and transport them. And for us looking at that, and for our customers looking at that, that’s really like a low value add task for a person to do. People should be using kind of their visual acuity and their intelligence and require training to do tasks that are higher value add and a lot more engaging for people as well. A lower value add task of just kind of moving stuff and transporting and pushing carts, it can be in some of the industries, difficult to actually retain staff to do that because it’s not very engaging.
Steve Crowe: We’re here with Terry Hannon, Chief Business Development and Strategy Officer at Adept Technology discussing all things mobile robots. Terry, what are the biggest market drivers that you guys see pushing AIVs into wider use and what industries have the greatest need for what AIVs can do?
Terry Hannon: One of the biggest things that the mobile robots offer, Steve, is really the return of investment. The return on investment is driven strongly by the labor content that it displaces. So, what we tend to do whenever we talk to our customers is ask them, you know, how much of a given person’s time is spent actually pushing a cart or riding on a tugger pulling carts or even riding a forklift.
Because if you can get that percentage of time then you kind of understand the labor cost that’s associated with that and more often than not in the environments that we deal with, people who are working either five days two shifts, five days three shifts or seven days three shifts. And those multipliers and the person’s annual salary, or fraction thereof, because of the amount of time they spent in transporting actually adds up really, really quickly and gets up to very high numbers. So whenever you talk to customers in two-shift operations and then talk to them about you know, return on investment over a year a less, then it starts to become very notable for them. So that’s a big driver for people.
And the other aspect of whenever we are doing tasks that were once performed just solely by human beings pushing carts, there are also you know the vagaries of having humans actually do these tasks. People get sick, people will take breaks, people answer their cellphones, talk to their friends and go to bathroom breaks, they have lunch. So, all of these various things that are just kind of natural, normal things that we associate with the efficiency of personnel in a given organization, and these things are really eliminated whenever you go to robots that are just doing these transport tasks. People are still required at the moment to kind of do the lifting, and the picking and the placing that require your eyes, that require your hands and require your arms for reaching. So at the moment that is the case, but that will also change in the future.
A couple of things apart from just the labor costs: safety is a very big deal. So, in a lot of the environments we operate in: manufacturing environments and warehouse environments in particular, people are pushing these carts, are riding tuggers and forklifts in these warehouse areas and there are, as we are all aware from the statistics, there are quite a lot of accidents that involve humans, that involve the infrastructure and crashes and knocking down shelves and other various things. So these areas do have a higher risk associated with them.
So eliminating the people from that area from doing the pushing and pulling tasks and moving robots into doing those tasks, eliminates that risk, eliminates all the downside of, you know, anybody getting injured with that which is not only just a very high morale issue whenever somebody gets injured and it’s very, very bad but also, you know, a compensation cost for getting businesses to do this. So safety is in the loop.
One other aspect that is a driver for our customers is traceability of goods that are moved. So whenever people are in, for example, the manufacturing environments, they are trying to trace what is happening in their inventory as it moves around a given facility. And this is true with even just regular manufacturing lines. Automotive is one: where they want to trace parts.
And one other area that we’re in that is a big driver of this is the semiconductor industry where our robots are used to pick and place 200 millimeter SMIF pods filled with semiconductor wafers around a fan and they move from tool to tool and from tool into WIP inventory and back around again. As people are aware these wafer pods go through tens of different tools and tasks before they are actually are completed wafers. So the processing and the sequencing, and the location of those wafers at any given time is very important. So those are some of the things that people really kind of appreciate with the robots and what we feel are drivers for them.
I guess we have one more in addition, which would be flexibility. I mean we have people that have fleets of robots that are able to actually deploy the fleets to different parts of the operation whenever that particular part is busy. So we all know, you know, things are never linear with order cycles coming into businesses. So if a bulk of orders comes in then you need to get hold of your labor and the factory pushed up to one end and then followed up as it moves through the operation. And that’s something that’s straight forward to do with a fleet of robots that are programmed to operate throughout an entire factory. So those are some of the drivers that we see.
Steve Crowe: Now, Adept recently partnered with a distributor called Applied Controls to sell your product here in the North America. How do you see this market growing in comparison to other regions? How intense is the competition? Is it heating up? And if the competition is increasing, does it make more difficult for Adept to sort of distinguish itself from the competition?
Terry Hannon: So we’re seeing broad interests from all—- we break it down into three areas: the North America, Asia and Europe. We’re seeing kind of pretty good demand and I say pretty even demand across those areas. If I was to say that there was a waving I would say that we might even have more demand from Asia than we have from the other two continents. But it’s fairly evenly distributed. The opportunities in each one of these regions are still individually large and whenever I say large I mean kind of whenever we’re dealing with customers it’s not onesie twosie robots. This is kind of fleets of robots engaged in kind of broad tasks throughout a factory. So, that’s kind of good news for us and it’s kind of what we had predicted.
And the models that we have laid out for people in kind of lean manufacturing and transport of goods and all these things, these are all kind of they make sense so people are now engaging. So we’re seeing good traction. We have a large number of seed units out there and now we’re getting a larger number of fleets that are starting to get deployed as people now have tested a couple of units and now they are starting to grow their business and to grow their demand. So we’re getting over this hurdle of just the adoption cycle as people get familiar with the technology.
So, in talking about competition that’s a kind of—- it’s interesting you say that. So whenever I look at competition, the first thing that really comes to my mind, or the first things that come to my mind is, well, my competitors are people pushing carts, people driving tuggers, fixed conveyor belts and people driving forklifts. That’s what I’m competing against. So whenever I go into our customer and we’re talking about this mobile technology and goods transport and we walk through the facility, so those are the areas for opportunity. That’s the kind of the low value-add task that could be applied to mobile robots and not have to be done by people who as we have talked about before, who can do higher value–add tasks.
So yeah, I mean to say that we don’t have other competitors in the robots space out would be silly to say that. Yes, there are a lot of kind of new faces appearing and as you go to trade shows you can see more and more people building up. I think that’s a great thing, that’s a healthy thing for the market that there are more players in it. But you know as we have discovered, I mean Adept purchased a mobile robots company about five years ago now and they had been around for 10 years before that or 12 years before that.
So we have this pretty large legacy of development of technology and in particular the software with the navigation and what we call our enterprise management that manages fleets. These two things together in conjunction with all of the mechanics and the safety infrastructure, there’s quite a barrier to entry to actually get to where customers need you to be.
So okay, so where do customers need you to be? Well, we’ve talked about some of the attributes. But they need a safety certified system. It has got to work a hundred percent of the time. So they are asking for a commercially viable product which is a lot different than kind of showing a video or showing the demonstration of technology applying something in the 24/7 environment. That’s a higher barrier to entry.
And of course big things that we talked about, it’s got to navigate freely, it’s got to operate as a fleet. My feeling that right now, I think that with these expectations from our customers to meet all these expectations, I feel that we are in, at least for the moment, in a unique position. Because we have kind of demonstrated all these things in very high level value add technology even on top of these robots. So we do have robots that have kind of passive payloads as we call, so the thing that they are carrying, but we also have, the only vehicle that I know of that’s deployed that has an active collaborative robot for access on top that actually are deployed in 24/7 operation and operating in a fleet. So that’s a fairly high barrier to entry. So competition coming up, yup absolutely some nice technologies out there, some things that we’re seeing, but I still think that we get, for the moment, a unique position on this.
Steve Crowe: Terry Hannon, Chief Business Development and Strategy Officer at Adept Technology. Thanks for joining us at the RoboBriefings podcast and we got to work on getting you some AIVs inside your house here.
Terry Hannon: Thanks a lot, Steve. It’s great to talk to you.
Steve Crowe: Right. Talk to you again soon.