Blog Archive

Saturday, December 1, 2018

The Technology Revolution - Still a Nation of Shopkeepers?, Mini Oxford Factory Tour, What makes an Immigrant Acceptable?, We Remember - 100 Years on.

The Technology Revolution - Still a Nation of Shopkeepers?

1. Butchers, Bakers, Candlestick Makers

I remember my local High Street when I was a boy living with my parents in a North London suburb. Like most High Streets at the time, it had butchers, green-grocers, chemists, a garage selling petrol and repairing cars and I imagine there must have been a baker although I don't remember that. There was a Tesco which was very much 'pile it high sell it cheap' and looked like a modern day Lidl or Aldi. There was a small Sainsburys but it consisted of lots of different counters and you had to queue at each separately.

2. Banks, Building Societies and Estate Agents

By the time I was in my early 20s, I remember walking up and down the same High Street looking for my first mortgage. There were plenty of banks, building societies and estate agents that had been moving into the spaces vacated by the independents which went out of business as the large modern style supermarkets and shopping centres took over. Close by Brent Cross shopping centre, the first in the UK, opened in 1976 and has been expanding ever since. It was so uncertain when it opened that they attracted retailers by offering spaces rent free plus a percentage of turnover.

The Griffin, The Whetstone, Pizza Express

3. Cafés and Restaurants

Today, as we move more and more of our purchases online, that same High Street consists mostly of restaurants, plus one large supermarket and a few other shops. It was just been voted one of the 10 healthiest High Streets in London. Not sure why.

We are living at the beginning of the Technology Revolution. It started in the final years of the 20th century with mass adoption of the internet leading to the dotcom boom followed by the bust in 2000. In the first decade of the 21st century, the internet started to come of age, following its baby tantrums in the early years. By the second decade (that's now) everyone has more computer power in their pockets than was used to get man on the moon in 1969, in the form of a mobile phone with inexpensive internet.

As we move more and more of our lives online, the High Street is becoming a place to visit for an experience. Why buy goods and schlepp them home when you could just get them delivered more cheaply by pressing a few buttons on your mobile? As I write this, one of my light bulbs just blew so I went online and 2 LED Philips lightbulbs, designed to work for 15 years, will be with me tomorrow for £4 including delivery. Alternatively I could venture out, attempt to find a shop with the right bulbs in stock, pay for petrol, bus fares or perhaps parking, waste some time and maybe not even find what I am looking for. If I do find them, they are sure to be more expensive as the shop has far higher costs than the out of town warehouse where my online bulbs come from.

First Things to be Disrupted

Selling Music and Books - (disrupted by Napster, Amazon, etc.)
Disappearance of High Street music stores (Our Price, HMV, etc.)

Being Disrupted Now

Transport: Uber, Car Share Apps
The High Street: Chain Stores, Banks, Estate Agents
Take-Away Fast Food: Deliveroo, UberEats, etc.

Collapsed recently: Toys R Us, Maplin, Jacques Vert, Poundworld
Closing Stores: House of Fraser, M&S, Mothercare, Homebase, Cau/Gaucho, Carluccio, New Look, Carpetright, Prezzo, Jamie's Italian, Debenhams, Gourmet Burger, Strada, etc.

Department Stores and Chain Stores are declining. Even John Lewis has stopped making money.
Independent Stores are a little more stable on the whole, probably because people are interested in something different. If you are already familiar with it you can just order on line.

To Be Disrupted Soon

Transport: Self-driving cars
High Street: anything and everything that doesn't offer a better experience than online
Services: No longer any need for High Street presence other than Barbers, Hairdressers, Nail-bars, etc.

The Reasons for the changes are a mixture of:

  • Shift to online enabled by technology
  • Increases in Business Rates
  • High cost of High Street Shop leases
  • Increases in Staff costs - Minimum Wage
  • Reduction of EU workers coming to UK since the referendum
  • Increase in costs due to fall in value of the Pound since the referendum.

We are living through the start of the Technology Revolution during which we are going to see the greatest concentration of change to the way we live and work since the Industrial Revolution which took place between 1760 and 1840. It started in Great Britain and was largely led by innovations in the textile industry. Our Technology Revolution of today, started at the beginning of the 21st Century and has been enabled by the proliferation of cheap and easy access to the internet across the world and the shift to digital services. The digital element underlies the revolution but it is technology in a broader sense that will drive profound changes for decades to come. Look at the robots in my next article.

What to do about it? Embrace the changes and prepare for ever greater disruptions to older business models. We ain't seen nothing yet!

Mini Oxford Factory Tour

The most striking thing for me about our two hour tour around the assembly plant was the contrast between the new modern areas operated entirely by robots and the older more traditional areas only assisted by robots. The latest statistics from the plant, some of which I have shown later in this article, also underline the Technology Revolution that we are undergoing such as the shift to electric next year which is expected to take a sizeable chunk of the market very quickly.

Staggering levels of automation

The total robotisation of the Body In White assembly area (pictured above and below) is a taste of the future. Built about 6 years ago, the robots at an average cost of £50,000 have replaced several hundred people who used to weld these chassis components together. The acquisition cost of the robot is roughly the same as the annual cost of a person. But the robot will run for 15 years and is then sold on for about £20,000. They do still need a few people to keep an eye on the robots and undertake maintenance and repairs on them.

It reminds me of the future factory joke which is entirely operated by robots, one man and a dog. Why? The man is there to feed the dog and the dog is there to stop the man touching the robots.

Robots assemble the car chassis structure by welding parts together
The factory currently runs near to capacity, producing about 1,000 cars 5 days per week. Each Mini is unique based on one of the 10 million combinations available. As the cars progress along the lines, you can see that each one is different (model type, colours, wheels, options etc.). Once the chassis has been assembled by the robots, the Assembly room consists of a mixture of people and robots working together. For example, a robotic trolly rolls up with the correct dashboard and a man slides it into the next Mini on the line. The windscreens are fitted by robots but the headlamps are all placed by hand.

Robots and People work together in the assembly Hall. 
Any colour you like so long as it's black. Unlike Henry Ford, you can literally order anything you like for your Mini. The car pictured below is covered in a fabric that feels like fur. The most popular colours at the moment are white, red and British Racing Green.

You can have your Mini however you like. This one feels like fur, not paint!

Here are a few statistics that I picked up on my tour:
  • 1,000 cars per day, 5 days per week working 24 hours in 3 shifts
  • 92% export, 90% petrol, white most popular colour
  • Value of exports is approx. £4bn per annum
  • £50k robots (average) work for 15 years and are sold abroad for £20k
  • Robots rest every 2 hours for servicing (oil, parts changes, etc.)
  • Body in White (assembling the metal chassis elements) is 100% robots
  • Assembly is a mixture of people and robots
  • Supplier lorries wait in the holding area for their delivery slot. They are fined £20k per minute if late. A Romanian supplier was held up at Dover so hired a helicopter for £100k to make delivery on time.
  • The Mini plant in the Netherlands is where convertibles and some other models are made. It has spare capacity if needed.
  • Electric car production starts next year at Oxford plant. The decision was made prior to the referendum and it is likely to fast account for 20% of sales.

The tour was a great learning experience. I was particularly fascinated by the complexity, the automation and the inter-dependency on suppliers arriving just on time and to the correct quality, alongside the automation efficiencies that the technology brings. Even slight disruptions to this process would have enormous consequences to one of our most valuable UK exports.

What makes an Immigrant Acceptable?

I enjoy watching The Mash Report presented by Nish Kumar for its humorous take on current affairs. In a recent episode, there was a 'helpful' tutorial for immigrants on how they can make themselves more acceptable to The British:

We Remember - 100 Years since the Armistice of The Great War

Break of Day in the Trenches

The darkness crumbles away.
It is the same old druid Time as ever,
Only a live thing leaps my hand,
A queer sardonic rat,
As I pull the parapet’s poppy
To stick behind my ear.
Droll rat, they would shoot you if they knew
Your cosmopolitan sympathies.
Now you have touched this English hand
You will do the same to a German
Soon, no doubt, if it be your pleasure
To cross the sleeping green between.
It seems you inwardly grin as you pass
Strong eyes, fine limbs, haughty athletes,
Less chanced than you for life,
Bonds to the whims of murder,
Sprawled in the bowels of the earth,
The torn fields of France.
What do you see in our eyes
At the shrieking iron and flame
Hurled through still heavens?
What quaver—what heart aghast?
Poppies whose roots are in man’s veins
Drop, and are ever dropping;
But mine in my ear is safe—
Just a little white with the dust.

Isaac Rosenberg 1890 - 1918

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