Computer Science

introDUction there is a lot of new process technology around. there can be few, if any, operations that have not been affected by the advances in process technology. and all indications are that the pace of technological development is not slowing down. this has important implications for operations managers because all operations use some kind of process technology, whether it is a simple internet link or the most complex and sophisticated of automated factories. But whatever the technology, all operations managers need to understand what emerging technologies can do, in broad terms how they do it, what advantages the technology can give and what constraints it might impose on the operation. Figure 8.1 shows where the issues covered in this chapter relate to the overall model of operations management activities.

process technology

Key questions

❯ What is process technology?

❯ What do operations managers need to know about process technology?

❯ how are process technologies evaluated?

❯ how are process technologies implemented?

8

Operations management

Direct

Design Develop

Deliver

Design

Layout and flow

Process design

Process technology

People in operations

Topic covered in this chapter

Figure 8.1 this chapter examines process technology

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CHAPTER 8 PROCESS TECHNOLOGY 247

WHAT IS PROCESS TECHNOLOGY?

How operations managers deal with process technology is now one of the most important decisions that shape the capabilities of operations. This was not always the case, at least not for all operations. There used to be a simple division between those operations that used a lot of process technology, usually manufacturing operations, and those that used little or no process technology, usually service operations. But this is no longer true, and arguably has not been true for decades. High-volume services have for years understood the value of pro- cess technology. Online transactions for retail and other services are vital for their success. Yet even professional services such as legal and medical services can benefit from new and value-adding technologies (see the section on telemedicine later in this chapter).

So what do operations managers need to know about process technology? It must be important to them because they are continually involved in the choice, installation and man- agement of process technology. But operations managers are not (or need not be) technolo- gists as such. They do not need to be experts in engineering, computing, biology, electronics or whatever constitutes the core science of the technology. Yet they should be able to do three things. First, they need to understand the technology to the extent that they are able to articu- late what it should be able to do. Second, they should be able to evaluate alternative technol- ogies and share in the decisions of which technology to choose. Third, they must implement the technology so that it can reach its full potential in contributing to the performance of the operation as a whole. These are the three issues which this chapter deals with. This is illus- trated in Figure 8.2 and forms the structure of the chapter.

Process technology defined First, let us define what is meant by process technology. It is ‘the machines, equipment, and devices that create and/or deliver products and services’. Process technologies range from milk- ing machines to marking software, from body scanners to bread ovens, from mobile phones to milling machines. Disney World uses flight simulation technologies to create the thrill of space travel on its rides – just one in a long history of Disney Corporation and its ‘imagineers’ using technology to engineer the experience for their customers. In fact process technology is pervasive in all types of operations. Without it many of the products and services we all pur- chase would be less reliable, take longer to arrive and arrive unexpectedly, only be available in a limited variety, and be more expensive. Process technology has a very significant effect on quality, speed, dependability, flexibility and cost. That is why it is so important to operations managers, and that is why we devote a whole chapter to it. Even when technology seems peripheral to the actual creation of goods and services, it can play a key role in facilitating the

Question–What do operations managers need to know about process technology?

Stage 3 Implement the process

technology

Question–How does the process technology a�ect the operation?

Question–How can operations managers introduce new process technology smoothly?

Stage 1 Understand the

process technology

Stage 2 Evaluate the process

technology

Figure 8.2 The three stages of process technology management

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248 PART TWO DESIGNING THE OPERATION

OPERATIONS IN PRACTICE

Back in 1920, a Czech playwright, Karel Capek, first coined the name ‘robot’ (it comes from the Slavonic word for ‘work’). Since then, robots have moved from the stuff of science fiction to become a common, if not ubiquitous, element of mass production operations. There are more than a million industrial robots doing routine jobs on production lines. Robots do not take meal breaks, fall ill, complain or leave for better pay. They perform repetitive tasks cheaper than humans, give greater accuracy and repeatability, and can also be used where conditions are hazardous or uncomfortable for humans. Anyone who has seen the way that robots weld together automobile bodies, assemble complex prod- ucts, or load and unload work pieces onto a machine cannot fail to recognize the impact that robotics has had on manufacturing operations since robots were first introduced in the 1960s.

But like most new process technologies, the effect of robotics on operations management practice can be both positive and negative, depending on one’s perspective. (Film critics, who voted on Hollywood’s 50 greatest good guys and 50 greatest baddies, included a robot – the Terminator – on both lists.) Certainly they can save humans from exposure to danger. Robots were used during the clear-up operation among the rubble of the Twin Towers in New York. ‘ Enough people have died here ,’ said a spokesperson for the emergency services. ‘ We don’t want to risk any one .’ Bomb disposal squads use specialized robots which can take at least some of the risk from what remains a hazardous job. Nuclear power stations are decommissioned using robots to move, dis- mantle and manipulate hazardous radioactive material. They are also becoming both cheaper and more ver- satile in their production role. For example, Canon has announced its plans to move towards fully automating its digital camera production. Decades ago, Canon, like other manufacturers, began using cell production with teams or a single worker assembling a major part of the product, rather than repeating a simple task (see Chapter 6 ) . And over the years robots have been rou- tinely used as part of production cells. Canon calls it a ‘man–machine cell’, and says that ‘ human involvement will be phased out in making some products ’.

Only by substituting robots for people will produc- tion be kept in Japan, according to Canon, reversing the trend of Japanese manufacturers moving production to

China, India and the rest of Asia, where labour costs are cheaper. ‘ When machines become more sophisticated, human beings can be transferred to do new kinds of work ’, Jun Misumi, a Canon spokesperson, said. But it is the nature of the interface between people and robots that is concerning some experts. Akihito Sano, a professor at Nagoya Institute of Technology, has stressed the need for some way in which workers can communicate effec- tively so that robotic technology can be fine-tuned to become more practical. He also says, reassuringly, that there will always be room for human intelligence and skill. ‘ Human beings are needed to come up with inno- vations on how to use robots. Going [totally] to a no-man operation at that level is still the world of science fiction. ’ Yet people have always been nervous that new process technologies will take away their jobs. (Capek’s original play that gave robots their name described how, at first, they brought many benefits but eventually led to mass unemployment and unhappiness.) But there are some examples of a smooth introduction of robotics. Audi is said to have been successful in introducing industrial robots, partly because it asked its workers to suggest potential applications of robotics where they could both improve performance and then gave the same work- ers jobs supervising, maintaining and programming the robots. It may even be that robots can help defend manufacturing jobs in the rich world. For example, it has been pointed out that one reason why Germany has lost fewer such jobs than the UK is that it has five times as many robots for every 10,000 workers.

I, Robot 1

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CHAPTER 8 PROCESS TECHNOLOGY 249

direct transformation of inputs to an operation. For example, the computer systems which run planning and control activities, accounting systems and stock control systems can be used to help managers and operators control and improve the processes. This type of technology is called indirect process technology. It is becoming increasingly important. Many businesses spend more on the computer systems which control their processes than they do on the direct process technology which acts on its material, information or customers.

Process technology and transformed resources One common method of distinguishing between different types of process technology is by what the technology actually processes – materials, information or customers. We used this distinction in Chapter 1 when we discussed inputs to operations and processes.

Material-processing technologies These include any technology that shapes, transports, stores, or in any way changes physical objects. It obviously includes the machines and equipment found in manufacturing opera- tions (such as the robots described in the ‘Operations in practice’ case at the start of this chap- ter), but also includes trucks, conveyors, packing machines, warehousing systems and even retail display units. In manufacturing operations, technological advances have meant that the ways in which metals, plastics, fabric and other materials are processed have improved over time. Generally it is the initial forming and shaping of materials at the start, and the han- dling and movement through the supply network, that have been most affected by technology advances. Assembling parts to make products, although far more automated than it was once, presents more challenges.

Information-processing technology Information-processing technology, or just information technology (IT), is the most common single type of technology within operations, and includes any device which collects, manip- ulates, stores or distributes information. Arguably, it is the use of Internet-based technology (generally known as e-business) that has had the most obvious impact on operations – espe- cially those that are concerned with buying and selling activity (e-commerce). Its advantage was that it increased both reach (the number of customers who could be reached and the number of items they could be presented with) and richness (the amount of detail which could be provided concerning both the items on sale and customers’ behaviour in buying them). Traditionally, selling involved a trade-off between reach and richness. The widespread adoption of Internet-based technologies effectively overcame this trade-off. Also, the Internet had equally powerful implications on many other operations management tasks.

Customer-processing technology Although customer-processing operations were once seen as ‘low technology’, now process technology is very much in evidence in many services. In any airline flight, for example e-ticket reservation technology, check-in technology, the aircraft and its in-flight entertainment, all play vital parts in service delivery. Increasingly the human element of service is being reduced, with customer-processing technology used to give an acceptable level of service while signif- icantly reducing costs. There are three types of customer-processing technologies. The first category includes active interaction technology such as automobiles, telephones, Internet bookings and purchases, fitness equipment and cash machines (ATMs). In all of these, cus- tomers themselves are using the technology to create the service. By contrast, aircraft, mass transport systems, moving walkways and lifts, cinemas and theme parks are passive inter- active technology; they ‘processes’ and control customers by constraining their actions in some way. Some technology is ‘aware’ of customers but not the other way round: for example, security monitoring technologies in shopping malls or at national frontier customs areas. The

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250 PART TWO DESIGNING THE OPERATION

objective of these ‘hidden technologies’ is to track customers’ movements or transactions in an unobtrusive way.

Integrating technologies Of course, some technologies process more than one type of resource. Many newer technolo- gies process combinations of materials, people and customers. These technologies are called integrating technologies. Electronic point-of-sale (EPOS) technology, for example, processes shoppers, products and information.

OPERATIONS IN PRACTICE

In his book, The Power of Habit , Charles Duhigg relates a story to demonstrate that human beings are more predictable than we sometimes like to think. A man walked into a supermarket to complain to the manager. The supermarket had been sending direct mail to the man’s daughter containing discount vouchers for baby clothes and equipment. ‘ She is only in high school ’, the father protested. The manager apologised profusely. It was the fault of a new program that predicted pregnancy based on the buying behaviour of their customers, he said. It was obviously a mistake and he was very sorry. A few days later, the man again visited the supermarket and said that it was his turn to apologise. His daughter was indeed pregnant and due to give birth due in a few months’ time. The point of the story is that technology is increasing in sophistication to the extent that it is now capable of performing tasks that previously required skilled people making judgements based on insight and experience. Moreover, technology can often do those tasks better. A piece of software has replaced the mar- keting team trying to guess who to sell baby clothes to. So technology is not only replacing people, but also ‘climbing the skills ladder all the time’.

Of course, technological advances have always had an impact on the type of jobs that are in demand by businesses, and, by extension, the type of jobs that are eliminated. So, much of the highly routine work of some mass manufacturing, or the type of standardized accounting processes that pay invoices, have been over- taken by the ‘the robot and the spreadsheet’. Yet the type of work that is more difficult to break down into a set of standardized elements is less prone to being dis- placed by technology. The obvious examples of work that is difficult to automate are the types of manage- ment tasks that involve decision making based on judge- ment and insight, teaching small children, diagnosing complex medical conditions, and so on. However, the future may hold a less certain future for such jobs. As the convenience of data collection and analysis becomes more sophisticated, and process knowledge increases,

it becomes easier to break more types of work down into routine constituents, which allows them to be automated. Carl Benedikt Frey and Michael Osborne, of the University of Oxford, maintain that the range of jobs that are likely to be automated is far higher than many assume, especially traditionally white-collar jobs such as accountancy, legal work, technical writing and (even) teaching. It is not simply that technology is get- ting cleverer; in addition it can exploit the capability to access far more data. Medical samples can be ana- lysed cheaper and faster by image-processing software than by laboratory technicians, case precedents can be sourced by ‘text-mining ’ programs more extensively than by para-legals, computers can even turn out news stories based on sports results or financial data. Frey and Osborne go so far as to estimate the probability that technology will mean job losses for certain jobs in the next two decades (bravely, because such forecasting is notoriously difficult). Among jobs most at risk are tele- marketers (0.99, where 1.0 = certainty), accountants and auditors (0.94), retail salespersons (0.92), technical writ- ers (0.89) and retail estate agents (0.86). Those jobs least likely to be replaced include actors (0.37), firefighters (0.17), editors (0.06), chemical engineers (0.02), athletic trainers (0.007) and dentists (0.004).

Technology or people? The future of jobs 2

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CHAPTER 8 PROCESS TECHNOLOGY 251

WHAT DO OPERATIONS MANAGERS NEED TO KNOW ABOUT PROCESS TECHNOLOGY?

Understanding process technology does not (necessarily) mean knowing the details of the science and engineering embedded in the technology. But it does mean knowing enough about the principles behind the technology to be comfortable in evaluating some technical information, capable of dealing with experts in the technology, and confident enough to ask relevant questions.

The four key questions In particular the following four key questions can help operations managers to grasp the essentials of the technology:

● What does the technology do which is different from other similar technologies?

● How does it do it? That is, what particular characteristics of the technology are used to perform its function?

● What benefits does using the technology give to the operation? ● What constraints or risks does using the technology place on the operation?

For example, return to the ‘Operations in practice’ case that discussed some developments in robotics. Now think through the four key questions.

● What does the technology do? Primarily used for handling materials, for example load- ing and unloading work pieces onto a machine, for processing where a tool is gripped by the robot, and for assembly where the robot places parts together. Some robots have some limited sensory feedback through vision control and touch control.

● How does it do it? Through a programmable and computer-controlled (sometimes multi- jointed) arm with an effector end piece which will depend on the task being performed.

● What benefits does it give? Can be used where conditions are hazardous or uncomforta- ble for humans, or where tasks are highly repetitive. Performs repetitive tasks at lower cost than using humans and gives greater accuracy and repeatability. Some robots are starting to mimic human abilities.

● What constraints or risks does it impose? Although the sophistication of robotic move- ment is increasing, robots’ abilities are still more limited than popular images of robot- driven factories suggest. Not always good at performing tasks which require delicate sensory feedback or sophisticated judgement. The human–robot interface needs managing carefully, especially where robotics could replace human jobs.

✽ ✽ ✽ Operations principle Operations principle Operations principle

Worked example

QB House speeds up the cut 3

It was back in 1996 when Kuniyoshi Konishi became so frustrated by having to wait to get his hair cut, and then pay over 3,000 yen for the privilege, that he decided there must be a better way to offer this kind of service. ‘ Why not ’, he said, ‘ create a no-frills barbers shop where the cus- tomer could get a haircut in ten minutes at a cost of 1,000 yen [€7] ? ’ He realized that a combi- nation of technology and process design could eliminate all non-essential elements from the basic task of cutting hair. How is this done? Well, first, QB House’s barbers never handle cash. Each shop has a ticket vending machine that accepts 1,000 yen bills (and gives no change!) and issues a ticket that the customer gives the barber in exchange for the haircut. Second, QB House does not take reservations. The shops do not even have telephones. Therefore, no

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252 PART TWO DESIGNING THE OPERATION

Emerging technologies – assessing their implications The four questions are universal, in the sense that they can help to understand the implica- tions for operations management of any new or emerging technology. By ‘implications’, we mean the natural consequence for the operation of adopting the technology. In other words, what would (or could) be the effects on the operation if the technology were included in the operation’s transforming resources.

In the rest of this section we look at three technologies that, at the time of writing, were new(ish). One processes materials (3D printing), one processes informa- tion (the Internet of Things) and one processes customers (telemedicine). The intention is not to provide a comprehensive survey of technologies – that could be expanded into a whole book – nor is it to delve into technical details. Rather it is to demonstrate how operations managers have to look beyond the technology in order to start to understand their implications.

receptionist is needed, or anyone to sched- ule appointments. Third, QB House devel- oped a lighting system to indicate how long customers will have to wait. Electronic sensors under each seat in the waiting area and in each barber’s chair track how many customers are waiting in the shop and dif- ferent coloured lights are displayed outside the shop. Green lights indicate that there is no waiting, yellow lights indicate a wait of about 5 minutes, and red lights indicate that the wait may be around 15 minutes. This system can also keep track of how long it takes for each customer to be served. Fourth, QB has done away with the tradi- tional Japanese practice of shampooing customers’ hair after the haircut to remove any loose hairs. Instead, the barbers use QB House’s own ‘air wash’ system where a vacuum cleaner hose is pulled down from the ceiling and used to vacuum the cus- tomer’s hair clean. The QB House system has proved so popular that its shops (now over 200) can be found not only in Japan, but also in many other South-East Asian countries such as Singapore, Malaysia and Thailand. Each year almost 4,000,000 customers experience QB House’s 10-minute haircuts.

Analysis

● What does the technology do? Signals availability of servers, so managing customers’ expectations. It avoids hairdressers having to handle cash. Speeds service by substituting ‘air wash’ for traditional shampoo.

● How does it do it? Uses simple sensors in seats, ticket dispenser and air wash blowers. ● What benefits does it give? Faster service with predictable wait time (dependable ser-

vice) and lower costs, therefore less expensive prices. ● What constraints or risks does it impose? Risks of customer perception of quality of

service. It is not an ‘indulgent’ service. It is a basic, but value, service that customers need to know what to expect and how to use.

✽ ✽ ✽ Operations principle Operations principle Operations principle

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CHAPTER 8 PROCESS TECHNOLOGY 253

3D printing (additive manufacturing) For decades and, in some industries, for centuries, producing physical products has been dominated by the principles of mass production. Standardized designs, repetitive pro- cesses and rigid, but productive process technology help to produce most of the items we use every day at (relatively) low cost. The downside of mass production was that vari- ety and customization are difficult to achieve at the same time as economies of scale. However, a process technology called 3D printing (also known as ‘additive manufactur- ing’) could have the potential to change fundamentally the economics of manufacturing, and in doing so challenge the dominance of mass production. But 3D printing is not a new technology as such. Since the 1990s designers have been using the technology to make prototype products or parts quickly and cheaply prior to committing to the expense of equipping a factory to produce the real thing. Yet the technology has advanced to the point where it is used, not just to make prototypes, but to produce finished products for real customers.

A 3D printer produces a 3D object by laying down layer upon layer of material until the final form is obtained. This is why it is also known as ‘additive manufacturing’, because, starting from nothing, successive layers are built up. This contrasts with ‘subtractive man- ufacturing’ that starts with more material than an item requires and reduces it through cutting, drilling, squeezing and otherwise removing material until the finished form is reached. The process starts with a computer-based design which is ‘digitally decon- structed’ by software that takes a series of virtual digital slices through the design, details of which are sent to the 3D printer. Different materials can be used to build up the object from plastic to metals (and even food) and in various sizes limited only by the capacity of the printer.

Implications The obvious implication of 3D printing is the effect it has on the economics of production, especially the economics of making small quantities of novel and/or complicated items eco- nomically. The technology’s more enthusiastic proponents claim that, at last, the trade-off between speed and efficiency on the one hand, and flexibility and variety on the other, has been overcome. Most conventional process technology is at its most efficient when standard- ized products are made in large batches. But with 3D printing the cost of changing from one product to another is effectively zero. Also, because the technology is ‘additive’ it reduces waste significantly. Sometimes as much as 90 per cent of material is wasted in machining some aerospace parts, for example. It also enables a single ‘experimental’ item to be made quickly and cheaply, followed by another one after the design has been refined, as Ian Harris, from the Additive Manufacturing Consortium says: ‘It adds up to a new industry which reduces immensely the gap between design and production. Manufacturers will be able to say to their cus- tomers, “Tell us what you want” and then they will be able to make specific products for them.’ Some commentators even believe that 3D printing will challenge the advantage of low-cost, low-wage countries. As labour costs become less important, it is argued, manufacturers will return to make items close to their market.

The Internet of Things4

Back in 1973 the Universal Product Code or bar code was developed to enable a part or prod- uct type to be identified when read by a bar-code scanner. Now bar codes are used to speed up checkout operations in most large supermarkets. However, they also have a role to play in many of the stages in the supply chain that delivers products to retail outlets. During man- ufacture and in warehouses bar codes are used to keep track of products passing through processes. But bar codes do have disadvantages. It is sometimes difficult to align the item so that the bar code can be read conveniently, items can only be scanned one by one and, most significantly, the bar code only identifies the type of item not a specific item itself. That is, the

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254 PART TWO DESIGNING THE OPERATION

code identifies that an item is, say, a can of one type of drink rather than one specific can. Yet these drawbacks can be overcome through the use of automatic identification technologies such as radio frequency identification (RFID). Here an electronic product code (ePC) that is a unique number 96 bits long is embedded in a memory chip or smart tag. These tags are put on individual items so that each item has its own unique identifying code. At various points dur- ing its manufacture, distribution, storage and sale each smart tag can be scanned by a wireless radio frequency ‘reader’. This can transmit the item’s embedded identify code to a network such as the Internet. See Figure 8.3.

Over the last several years the full potential of RFID technology has risen to a more revo- lutionary level, and one which has some important implications for operations management. Embedding physical objects with sensors and actuators (from vehicles to pharmaceuticals), and connecting them using wireless networks and the protocol that connects the Internet, allows information networks and physical networks to merge to form what has become known as ‘the Internet of Things’ (IoT). SAP, the developer of enterprise resource systems, describes the Internet of Things as follows: ‘A world where physical objects are seamlessly inte- grated into the information network, and where the physical objects can become active partici- pants in business processes. Services are available to interact with these “smart objects” over the Internet, query and change their state and any information associated with them, taking into account security and privacy issues.’5

Network analyses data to be used for monitoring and

process control Sensors ‘read’ item and transmit unique

code to network

RFID chip has a unique code number 96 bits long

Products have an RFID chip that transmits its

unique code

Figure 8.3 The Internet of Things (IoT) is a combination of RFID chips, sensors and Internet protocols that allows information on the location and state of physical objects to be networked

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CHAPTER 8 PROCESS TECHNOLOGY 255

Implications According to some authorities the IoT promises to create new ways of doing business, the potential to improve processes, and more possibilities to reduce costs and risks. Putting sensors on ‘things’ gives information networks the ability to generate huge volumes of current data that can both sense the environment and communicate between the ‘things’. Operations managers can track and analyse the data to understand what is happening, even in complex systems, and respond quickly if necessary. This helps operations save significant amounts of money in lost, stolen or wasted products by helping manufacturers, distribution companies and retailers to pinpoint exactly the position and state of every item in the supply chain. So, for example, if a product had to be recalled because of a health-risk scare, the exact location of every potentially dangerous product could be immediately identified. Shoppers could easily scan a product to learn more about its characteristics and features while they are in the store, waiting at check- out counters could be eliminated because items will be scanned automatically by readers, the bill could even be automatically debited from your personal account as you leave the store. There are also potential benefits in tracking products after they leave the store. Data on how customers use products can be collected automatically and accurate recycling of waste mate- rials could be made considerably easier. McKinsey, the consultants, see six distinct types of emerging applications with implications for operations managers. These implications fall into two broad categories: first, information and analysis and, second, automation and control.

Information and analysis Because IoT networks link data from products, equipment, pro- cesses and the operating environment, they will produce enhanced information and more sophisticated analysis, which can augment operations management decisions. In particular three aspects of information and analysis could be affected:

● Knowing where things are – tracking will be easier because the movements of products and their interactions with processes will be monitored in real time. For example, some insur- ance companies will install location sensors in customers’ cars, allowing the insurer to base its fees on how a car is driven as well as where it travels.

● Knowing what is happening – the data from a large numbers of sensors, located in such infrastructural resources as roads and buildings, can report on conditions so that managers have an instantaneous awareness of events. For example, security systems can use sensor information from a combination of video, audio and vibration sensors to detect unauthor- ized entry to restricted areas.

● Knowing what to do – the IoT’s storage and computing power, when combined with advanced decision support systems, could significantly enhance decision making. For example, in retailing, shoppers can be monitored as they move through stores. Sensors record how long customers loiter at individual displays and record what they ultimately buy. The resulting data can help to optimize retail layouts.

Automation and control Controlling any operation or process involves monitoring what is actually happening within the operation or process, comparing what is actually happening with what should be happening, then making any necessary interventions to correct any devi- ations from what should be happening. So monitoring and data collection are at the heart of the control activity, and monitoring and data are what the IoT is particularly good at. When information is fed back through a network to some kind of automation that can intervene and modify process behaviour, control can be exercised (theoretically at least) without human intervention. Again, three aspects could be affected:

● Process optimization – processes that can be controlled can be more easily optimized. For example, in some semi-continuous processes in pulp and paper manufacturing, the requirement for the temperature of lime kilns to be continually adjusted limits their pro- ductivity. Yet by embedding temperature sensors in the process the kiln’s flame can be automatically adjusted to reduce temperature variance (and therefore increase quality) to near zero without frequent operator intervention.

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256 PART TWO DESIGNING THE OPERATION

● Optimized resource usage – knowing exactly how much resource is being used can help in reducing costs. For example, some energy companies are providing customers with ‘smart’ meters that give visual displays showing energy usage and the real-time costs of provid- ing it. This allows domestic commercial customers to do things such as moving the use of energy-intensive processes away from peak energy demand periods to off-peak periods.

● Fast reactions – the most demanding use of the IoT involves rapid, real-time sensing of unpredictable circumstances and immediate responses governed by automated systems. The idea is for the IoT to imitate human decision makers’ reactions, but at a faster and more accurate level. For example, it could be possible for a group of robots to clean up toxic waste spills when detected.

However, the IoT does pose problems. There are technical challenges in integrating RFID chips into physical objects in such a way that makes sure that information is accurately trans- mitted. And although, as volume has increased, the cost of such chips and sensors has fallen, cost is still a factor in adopting the technology. But perhaps the most contested issues are those relating to customer privacy in extending data capture from products beyond the checkout. It is this issue that particularly scares some civil liberties activists. Keeping track of items within a supply chain is a relatively uncontentious issue. Keeping track of items when those items are identified with particular individuals going about their everyday lives is far more problematic. So, beyond the checkout, for every arguably beneficial application there is also potential for misuse. For example, smart tags could drastically reduce theft because items could automati- cally report when they are stolen, their tags serving as a homing device to pinpoint their exact location. But similar technology could be used to trace any citizen, honest or not.

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