Robocalypse: Now?

What the ‘Fourth industrial revolution’ means for retail

From robots in the aisle to customer service bots and simulation modeling across the supply chain, Robocalypse is coming.

Picture the scene: armies of robots operating in industrial production lines, running day and night, performing the same repetitive tasks their programming dictates as their human masters look on. No, this isn’t science fiction, but the reality of the modern production line, and a scene we’re now very familiar with. But things are changing. Rather than sticking to purely physical tasks, smart systems are now beginning to take on more of the cognitive load. This means that many jobs that have historically been safe from the threat of automation may no longer be so. In fact, if the headlines are to be believed, hundreds of millions of jobs in the UK, the US and other major economies around the world are now at risk of automation by smart machines.

If you think that sounds a bit far-fetched then think again. ‘Intelligent’ technologies have been beating the humans at their own game for some time now. IBM’s supercomputer, Deep Blue, took down world chess champion Garry Kasparov back in 1997. In 2011 IBM’s robot super-brain, Watson, was able to defeat a 74-time winner of the US quiz show Jeopardy. And in 2016, Google’s Deep Mind system beat the world’s leading player of the Chinese board game ‘Go’ — a fiendishly complex game that has more positions than there are atoms in the universe! As computers become increasingly able to take on nonroutine tasks, an evolution of the workplace (and the world) is set to take place.

The ‘fourth industrial revolution’ is upon us. Predictions of the scale of the impact on employment vary, but they all point to a shift of seismic proportions. Recent research by Citibank in partnership with the University of Oxford predicts an average of 57 percent of jobs in OECD countries are at risk of automation (47 percent in the US and 35 percent in the UK), while China faces much higher risk at 77 percent.1 With the likes of Professor Stephen Hawking, Bill Gates and Elon Musk talking about the potential of artificial intelligence to change the world for better or for worse, it’s big news at the moment.

The fourth industrial revolution is coming and cognitive automation is its flag bearer. You may think that this is not relevant to retail or certainly not for the next 10 years. Well think again! Technologies that can think, learn and adapt will increasingly be part of our lives and sooner rather than later. This is forecast to have a massive impact across a range of industries and retail is right up there. From robots in the aisle to customer service bots and simulation modeling across the supply chain, Robocalypse is coming. So what does it all mean and what do we need to do about it? Well it’s not an all or nothing game. In this paper we provide a pragmatic view of who’s doing what and how you can work out what will work best for your organization. Others estimate that the overall impact across the economy could be higher, with the Chief Economist at the Bank of England, Andy Haldane, suggesting that 15 million jobs in the UK (around half of the workforce) could be at risk.2

As retail leaders we’re accustomed to change. We deal with changing shopping habits, channel shifts, economic and political uncertainty and disruptive new competitors on a daily basis. But all this change is expensive, frankly unaffordable, unless a step change in productivity is achieved. For a business to survive and thrive in tomorrow’s market, a new retail model, enabled by automation, is required. The future is coming fast and only the fit-forpurpose will survive. In this paper we aim to bring some clarity to the practical application of both physical and cognitive automation in the retail model. We look at the retail value chain in some detail and provide examples of where these new technologies can be deployed. We provide some context on what is happening in other industries, debunk some myths and draw conclusions about what the technology can and can’t do.

Our intent is to provide retail leaders with a grounded, practical perspective on the opportunity that the fourth industrial revolution presents, and the very real risks of ignoring it.

Fuente: KPMG

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