Services and the Robot Business

1. Service Industry Conditions and Role of Robot Technology

The economies of Japan and other developed nations are evolving into service-based economies in which the most value is created and delivered through services and the majority of employment is derived from the service sector. The increased sophistication and diversification of customer needs is driving this maturing market. In recent years, global competition among service industries has become fiercer, and improving service productivity, responding to the needs of individual customers by providing services appropriate to the different conditions facing even the same customer, and dealing with that as a business, has become essential to survival.
Customizing services to each individual customer, and furthermore responding to the environment conditions, such services leading to large customer value, generally carry with them a strong tradeoff between cost and customer benefit. Not simply task automation technologies, but tasks that can make the most of next generation robot technologies (hereafter referred to as RT) based on advanced sensor technologies, information and information processing, are thought to be truly services with a strong cost/benefit tradeoff where efficiencies can be maximized. As an important essential theme that should be approached by RT, this tradeoff relationship can contribute to a shift from a traditional relational curve to a new value curve.
For the service industry, we consider below how business processes that deliver services to customers will change, from the perspective of changing relationship between service providers and customers and how RT can contribute to a shift to a new value curve. Also, in the later section, we look at a case in which RT is being considered for service process re-engineering.


2. The Relationship between Increasing Service Sophistication and RT

The relationship between service providers and customers begins from the logic of �gnot having to do something anymore�h transforming into �gbeing able to do something,�h and is formed by an ever escalating spiral of value for the customer. The logic of �gnot having to do something anymore�h refers to the service provider, and in some cases, together with the customer creating and presenting a service package based on customer needs through an ever deeper relationship with the customer. The logic of �gbeing able to do something,�h on the other hand, refers to providing information, knowledge and systems to customers that enable them to serve themselves.
Migration and circulation between �gnot having to do something anymore�h and �gbeing able to do something�h fundamentally arise from a competitive relationship. For example, customers may shift from �gnot having to do something anymore�h to �gbeing able to do something�h when they become more sophisticated by obtaining knowledge, increasing their negotiating power, and no longer being satisfied with passively provided services (�gnot having to do something anymore�h), and they may be prompted to move to a state �gbeing able to do something�h by themselves due to competition between service providers or the appearance of new methods that enable self-service.
Within this kind of circulating process, robots or robotic technologies first have a role in being able to create more advanced and highly efficient services from the �gnot having to do something anymore�h interaction between service providers and customers. If systems for �gbeing able to do something,�h or more specifically, self-service systems develop out of this robotic approach, they enable to create a form of business traditionally dominated by the manufacturing industry, such as hardware (or systems) development and sales, to end customers. After shifting to the self-service state, the next theme is to realize new service processes that deliver advanced benefits or costs and enable competitive prices to be set. At this point, the reliance on technology becomes higher; we must consider RT not from the perspective of technology to be integrated into a handful of service processes, but instead as total service process re-engineering. This should be a joint activity done by both the service provider and the holder of the technology. In this partnership, when considering the kind of business that can be done by manufacturing industries or technology solution providers, one should consider not only service providers developing and marketing systems that can deliver revolutionary new services, but also how a new business can be delivered jointly or independently to deliver new services. The latter, that is, delivering new value through the fusion of service industry and manufacturing industry, is the most important theme for next generation robot industries.


3. Termite Extermination Service Process Innovation

(1) The Termite Extermination Service Process
About two years ago, the management of Japan�fs second largest termite extermination business, Asante, was presented with a proposal to revolutionize the existing termite extermination service process through the use of robot technology. This �gnot having to do something anymore�h service was in demand because termite extermination required crawling under floors and specialized knowledge of how to exterminate termites. However, it was difficult to achieve dramatic business innovation since the business was based on improvement of worker skill levels through education and training and accumulation of hard operations work. Besides, little service innovation based on customer feedback took place.
Thus, first a brainstorming session was held for customer requests and all service processes, and consideration was begun on which changes would increase sales the most or have the greatest impact on profitability. Next, by looking at the entire service process over a period of a few years, it was decided to promote thought about how to improve efficiency and reduce costs by focusing on customer value creation that had been traditionally ignored in this industry, and finally re-assessing current processes.
The termite extermination service process begins with a visit to individual homes or offices, performing a site inspection and then selling the service. Customers who express an interest are offered an estimate and a rough estimate is prepared if desired. If the customer is interested in obtaining a detailed estimate, exterminators perform an actual under-floor inspection, to recommend what kind of detailed services are required and how much they will cost. If the customer agrees, the extermination team is notified of necessary equipment and the team visits the customer site to perform the survey. The extermination team enters cramped subfloor or attic spaces which are difficult for a human to enter, and performs inspections or preventative work or extermination. This subfloor and attic work that must be performed in physically grueling conditions with air temperatures exceeding 50 degrees Celsius in the summer is stereotypical �g3D�h (dangerous, dirty and demanding) work that is unpleasant even for the most seasoned exterminator.
The final step in the service process stream is a post-maintenance inspection that is performed several years after the treatment. This step is also �g3D�h work, similar to that mentioned above.
The current termite extermination service process has been very roughly described above, but in reality it is comprised of a series of much more complex sub-processes.

(2) Increasing Termite Extermination Service Process Sophistication and Introducing RT
While investigating overall processes as described above and extracting sub-processes likely to help grow sales and improve profitability, consideration is performed on which innovations would enable broad management change. When doing so, rather than in the end simply substituting robots for processes handled by humans, a design is promoted that also considers reforming all existing processes, including where can robots be introduced for which processes and at what timing.
This results in the following approach which corresponds to the previously mentioned relationship between services and RT. In other words, we first consider introducing RT to more efficiently deliver �gnot having to do something anymore�h services and where RT could create new customer value not found in current services. Next, from those, we consider system development to enable customers to serve themselves (�gbeing able to do something�h). Furthermore, these new RT enabled service processes aim to cause a wave of change sweeping the industry and to significantly change the industry�fs current competitive environment by developing more sophisticated �gnot having to do something anymore�h services.
The introduction of RT to make �gnot having to do something anymore�h services more efficient or to create new customer value could, for example, enable systems to be developed that help human exterminators to inspect and treat termite infestations more efficiently, or to enable treatment application in areas not easily accessed by human exterminators to get into, such as narrow wall spaces. If these assisting devices and systems are further refined into simple and low cost products, it might be possible to develop the products that are �gbeing able to do something.�h Another goal of RT engineering could be re-engineering the overall sales, quoting, treatment and post-maintenance processes through RT and transforming the component steps into greatly compressed processes to offer a service that can be delivered more quickly, less expensive and thus, more trusted by customers.

4. Conclusion

When considering robot businesses, one should not only think of this as a business of �gbuilding and selling robots.�h The key point is to adopt a systematic approach in which RT is used to re-engineer existing business processes to realize broad business innovation and RT is used as a method of creating new value. This could result in organizing hardware, robot, and a new business style of development, production and sales that had until now been controlled by the manufacturing industry. However, it is important to consider business models in line with the times that create value by developing RT systems and how sales and profit can be recovered.
It is service that holds this key. While considering the relation between service value proposition processes and RT, we must climb the value creation spiral formed from the fusion of services and manufacturing while always remembering customer value and the competition.