January 06, 2010

Status of Robotics, Automation and Process Change

1. Redbox video kiosks and Netflix are putting the double hammer to Blockbuster and other video rental stores.

This and reduction in checkout jobs with more self-check out services at Supermarkets, hardware stores are examples of how "robotics" [actually process changes] are impacting the job market, which was discussed by Marshall Brain.

Struggling Blockbuster was previously aiming to shut 410 to 450 of its most unprofitable stores this year and next. A series of "accelerated closures" brings that target to 810 to 960.

Blockbuster also said it might convert an additional 250 to 300 locations to outlets that focus on used DVDs. That means 1,060 to 1,260 of Blockbuster's stores will probably be shut down or transformed by next year.

There are 4,356 Blockbuster locations throughout the country, meaning 24% to 29% could be closed or altered within 16 months.

About 18% of Blockbuster's stores are unprofitable, and 47% are only mildly profitable, according to the filing. A core 35% of the company's locations provide 80% of its retail profit.


The video rental market is about 15,000 stores that are or were employing about 100,000 people (mostly part time). Netflix and Redbox still have people employed directly and indirectly (but fewer). The money that people save by using netflix and Redbox does go to other uses and the volume of movie rentals increases.

Netflix has 11 million subscribers

Marshall talked about pilots losing their jobs with automatically flown airplanes. This is not likely to happen for a long time even though the piloting of a commercial jet has been mostly automated. Slow changing regulations, legal liability and insurance liability will prevent this from occuring. Also, there is the public perception issue. How many people, especially older people would choose the robotic airline over the regular pilot airline. Also, the amount of operational efficiency and cost saving by automating pilots is less than having more efficient overall operations like Southwest Airlines.

The healthcare and education industry continues to create jobs

USA Today reports on Moody's Economy.com has forecasted U.S. job growth by geographic region and by industry.



Retail and wholesale trade and service sectors are still forecasting some job growth.





2. iRobot Corporation has announced it achieved a milestone in the home robot market with its home robot sales exceeding five million units.

Hollywood Video and other video rental stores are similarly impacted. Say about 15,000 total video rental stores with 100,000 mostly part time jobs.

The specially-designed technology and suspension also allows Roomba to maneuver over cords and extract itself from rug fringe and tassels. It is also possible to set Roomba to clean on a schedule and automatically return to its home base after finishing cleaning or when its battery is running low.

Roomba also detects dirtier areas and will respond by increasing vacuuming intensity and cleaning pattern. This ensures deeper, concentrated cleaning in that area. The spinning side brush also enables cleaning of corners and along edges and automatically adjusts from hard floors to carpets and avoids stairs and drop-offs.

The pricing for the Roomba 400 Series starts at $129.99 with the Roomba 500 Series - which incorporates iRobot’s advanced coverage and cleaning technology - starting at $279.99.



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