How Boeing, Toyota, Caterpillar, and other OEMs can double their current net profit by using smart contracts to become unmanned “virtual companies”, with or without cryptocurrency: Part 3
An Overview of the Automated Process Flow from Supplier to Customer
Self-driving trucks deliver shipments of supplier components to the OEM’s assembly plant. A 3D CMM scanner, such as a FARO 8-Axis Quantum ScanArm with FAROBlu Laser Line Probe, evaluates all the incoming mechanical parts for noncompliance.
These are no dumb 3D scanners. They are equipped with IoT (Internet of Things) capability and can harness the full connectivity of the digital manufacturing ecosystem. So when a noncompliance is detected, it can feed this information into a smart contract that automatically bills the supplier for noncompliance.
If multiple non-compliances are detected within the same shipment batch, then the smart contract will automatically pay to return all the noncompliant parts to the supplier for firsthand study (instead of just trashing the part). Multiple non-compliances indicate likelihood for an inherent manufacturing process defect, not an isolated incident, and therefore warrant further study.
The smart contract keeps tallies of each supplier’s noncompliance rates and uses that to calculate PPM scores in real time (a convenient tool that the suppliers can also check to see how they’re doing). On a quarterly basis, noncompliant suppliers are issued an email warning (via the blockchain2email.com API, EmailMesh API for Ethereum smart contracts, or this novel solution: http://jonathanpatrick.me/blog/ethereum-smtp) by the smart contract to step up their game or risk having the smart contract automatically start requesting competitive bids from alternate suppliers (more on how exactly the smart contract does this in part 6).
Of course, it isn’t cost-effective to scan every single incoming part. Buying enough robots to scan everything would probably bankrupt the OEM. Instead, parts from trusted OEMs with good PPM scores in the past and PFMEAs (process failure modes and effects analyses) on-file would only be selectively inspected.
The smart contract will know which shipments are coming from which suppliers because everything will be tagged with VeChain Thor chips. The VeChain Thor chips will also help the smart contract keep track of supplier on-time delivery metrics.
In addition, the RFID chips (IoT-enabled and capable of talking to the blockchain) will help eliminate $6.8 billion in shipping inefficiencies from the North American automotive supplier market. As this article explains, “Dude, where’s my container?” is a real complaint and “The lack of commonality was always the barrier to full visibility and efficiency. The coming together of the OEMs and their suppliers to design and deploy this commonality is the key to solving this very costly problem”.
Blockchain is the ultimate commonality. The smart contract would constantly have total oversight to all incoming supplier shipments and be able to coordinate them in a way that most efficiently supports the build schedule (or re-optimize the build schedule in anticipation of a foreseen shipment disruption).
In the case of electric and software components, they are plugged into test circuits, diagnostics interfaces, and data loggers (by robots) to confirm they are working as intended. The smart contract handles non-compliances in the same way as described above.
A robotic assembly line, using state of the art equipment from Motoman, KUKA, FANUC, ABB, Comau, and/or Electroimpact, builds the supplier components into the desired vehicle models.
In an ideal world, it would look like this:
Perfect ingredients + Perfect robots = Perfect finished product every single time
But as discussed above, it would be cost-prohibitive to ensure “perfect ingredients” by scanning every single incoming part. As a result, imperfect finished products will still periodically be built (necessitating intervention from human workers). Besides, robots themselves become imperfect when they’ve missed critical maintenance.
For these two main reasons, robots will never completely eliminate human blue-collar labor. Ed Colgate and Michael Peshkin, the professors who invented the entire field of cobotics, provide an excellent explanation here: https://www.industryweek.com/technology-and-iiot/why-robots-won-t-inherit-plant
1. It takes a village to run a robot. As discussed above, they still need maintenance by certified human mechanics. They also need to be periodically re-programmed by human technicians for new tasks.
2. Factories are inherently some of the most complex and dynamic environments on earth. As such, human talent is still needed in the areas of flexibility/agility and discernment/judgment. Humans are very good at dealing with the unexpected edge cases. In this regard, humans are highly underrated. Elon Musk recently discovered this for himself with the Tesla Model 3: https://www.cnbc.com/2018/04/13/elon-musk-admits-humans-are-sometimes-superior-to-robots.html.
However, robots are a lot more consistent than humans (when it comes to repetitive tasks). They don’t sleep and can hit a weld with the same exact quality millions of times in a row. With advances in the adjacent fields of IoT, haptics, and AI (particularly machine vision), I still see plants being 75% unmanned in the relatively near future. The thesis still holds.
In this futuristic assembly plant, manufacturing engineers and industrial engineers would also still be needed to rebalance and reoptimize the plant layout every time a new product model is released (as discussed in part 2, product development is the new lifeblood).
After a desired vehicle model is finished and rolls off the line, the smart contract pulls weather data (not unlike parametric smart contract micro-insurance for farmers in the developing world; for further reading on this tangential topic please see appendix B towards the bottom of part 20) and traffic data to determine whether it is safe for the finished vehicle to drive itself to the dealership. If it is safe, then a Husky-Fuelmatics robot will gas up the finished vehicle and send it on its way (or a robot snake charger for electric vehicles).
If it is not safe, then the smart contract will automatically pay for pickup and delivery to the dealership via self-driving truck. For instance, if it is raining hard, then a BMW self-riding motorcycle might not want to deliver itself to the dealership. A two wheel drive sports car might not want to self-drive to the dealership if snow is expected in I-90 and only AWD vehicles are allowed to go through without chains. In those cases, it is well worth it to incur the extra cost of the self-driving truck transport service.
Furthermore, some vehicles may not be able to deliver themselves to a dealership, even in good weather and simple traffic. Only BMW, Honda, and Yamaha motorcycles are capable of self-balancing and autonomous riding. All the other brands will still need traditional delivery. In the case of Caterpillar or John Deere, mining, construction, lumber, and agricultural vehicles often are incapable of travel at highway speeds and are therefore not street legal. No problem, the smart contract will automatically arrange for the self-driving truck to come by.
Some airlines may be slower than others to adopt completely auto-piloted aircraft due to insurance reasons (https://www.businessinsider.com/this-is-the-biggest-factor-keeping-planes-from-flying-fully-automated-2015-3). No problem, smart contract will automatically pay the pilot chauffeur service that the OEM is partnered with. Or find an insurance company that will accept auto-pilot (https://qz.com/1081423/lloyds-of-london-wants-to-insure-self-driving-airplanes-and-ships-regulators-and-the-public-wont-let-them/).
In the not-so-distant future, it’s also feasible that smart contracts will have completely supplanted the insurance industry (crypto’s most natural application is supplanting middle-men). Maybe it will just be the OEM’s smart contract talking to a 3rd party smart contract for insurance that ultimate determines whether to auto-deliver the plane or have it chauffeured.
“Smart contracts talking to smart contracts, how perverse!”-C3PO
Anyways, the smart contract will always find the cheapest low-risk option.
Continue to part 4….