Episode 70 - A Roadmap for Thinking About the Future of Industry

Hello, I'm Martijn Goud and this is Does Logistics Matter, a podcast about trends and innovations in supply chain and logistics. Answering yes to the question today is David Mindel, author, professor of aerospace engineering and Dibner professor of the history of engineering and manufacturing at MIT. In this episode, we talk about re-industrializing without wrecking the environment, how we focus too much on new products instead of processes, why AI won't replace humans, but needs them, and why today's thinkers and builders need to collaborate and shape the future of industry. Please enjoy my conversation with David Mindel. Hi David, welcome to the show. Thank you, it's pleasure to be here. The first question of this podcast is always the same question and that question is, does logistics matter? Yes, logistics matters. Logistics is the connective tissue in an industrial society. It's how everything gets from where it's made to where it's used and many different things in between. I often say, even manufacturing, a factory is not a place where products originate from. A factory is a node on an industrial system where materials and parks and labor flow in and they're reconfigured and they flow out again and living in an industrial society as we all do is really part of being part of these flows and at least where I live here in northern U.S., when you eat a strawberry in the winter, you're eating a very complicated logistical supply chain and if that's strawberries moldy and you throw it out, the poor thing traveled many hundreds and maybe thousands of miles to get to you only to miss the window by a few hours. By the way, when you eat it, the process isn't over either because you turn the energy into work and the flows continue. Yeah, definitely. So what's your connection to supply chain and logistics? Well, I've worked at MIT on automation and supply chain issues for many, many years. I started my career in underwater robotics but then rather quickly moved into autonomous and remote systems more generally. Then I started a company that does navigation for manufacturing and supply chain automation of various kinds. I spent a lot of time with some of the big companies working on that. I spent a lot of time thinking about automation and autonomy and both in aviation and in ground transportation, trains and trucks and cars and the relationship to labor in supply chain, which is of course a huge issue. My thing for a while was that I actually said this once to Jeff Bezos. I said, you think about the fulfillment center. It's really just a giant robot built up of infrastructure and machines and people and all those things collaborate together. If you look too closely at the individual robots, you're missing something important about how the warehouse works. He said, yes, we see the whole supply chain as a giant robot. I think that's actually not a bad way to characterize the way that logistics and supply chains work in today's world. I spent a lot of time working on the New York City subway system, which is a collaborative robot that spans the size of a city that moves, that collaborates with 5 million people per day and coming to it as an electrical engineer, it's really all about flow. Yeah, definitely. Well, it's great to have somebody on the podcast that has done a lot of work that is really important for the logistics industry, which is automation. Now, the reason that you are on today is because you have written a book, while you wrote multiple books, but this is about your latest book. Now, I'm going to refer to my notes to make sure I do not mispronounce the title. The title of the book is The New Lunar Society and Enlightenment Guide to the Next Industrial Revolution. Now, I guess if you really want to innovate and do new things, you need moonshots. Is that where the lunar society reference comes from? It actually doesn't come from that, even though I wrote a book about lunar landings, and I teach a course on the Apollo moonshot, but this book is titled after a group that met in Birmingham, England, in the 1750s and 1760s. They called themselves the lunar society because they would meet on the full moon so they could walk home and have some light at night, although it was also a bit of a joke they referred to each other as lunatics. And these folks, actually, very consciously took the ideals of the Enlightenment and the scientific revolution and applied them to industrial pursuits. And it was founded by Matthew Bolton and Erasmus Charles Darwin's grandfather, very much with inspiration from Benjamin Franklin. And through this group, Matthew Bolton met a young instrument maker from Glasgow, who had an improvement for a steam engine, but didn't know how to commercialize it. And that was James Watt. And they became partners on the firm Bolton and Watt really ignited the industrial revolution, as well as many other offshoots from the lunar society as well. So the book is really the story of this group of friends and collaborators and how they imagined and really created industrial society from zero to one, if you will. And what we can learn from them at this moment where we have to recreate industrial society in response to all of these changes that are taking place. So if I understand you correctly, they seem to have been, well, especially if you look at where we are today, far ahead of their time. They were. And they, you know, they recognized things. One of the members was Josiah Wedgwood, who created the English pottery industry. And he realized very early on, if you're in the pottery business, bad roads are bad for business. And very quickly, they started investing in canals. And the canal was the super highway of the 18th century. And they very deeply realized that mobility and connections and logistics were key to manufacturing in their case. And invested in those two things together. Now it's very for thinking when you start digging canals, you uncover a lot of minerals, you uncover fossils, Wedgwood himself would collect minerals from the canal digging sites and use them as inputs into his pottery making process and inputs into his study of geology. So a lot of these things were very interlinked for this group. And they recognized that all of these activities were required together to create the industry that they were looking to create. So, so, so they were ahead of their time. Were, were they in some way also ahead of our time? I don't know that they were ahead of our time. And in a way they weren't so much ahead of their time as they saw something that other people didn't see. And and part of that was because they were in the game. So Matthew Bolton was a well established manufacturer. He made what were called toys, which were small, middle, not the way we talk about toys today for children, but toys was a category of like bell buckles and hat buckles and buttons and sword hilt. And he was a toy manufacturer. And so he knew that a steam engine was not only something you could use to pump out a mine, which was what what had in mind, but something you could actually use to run a factory. And so by being in the game and understanding the processes themselves of manufacturing, they were able to innovate and find innovations that they could have then adapt in. And you know, what wedged would himself was an amazing, uh, uh, improved of all things industrial, but also in he innovated in marketing, you know, buy two, get one free. That's a wedged wood idea. Really? And he was selling pottery to the masses, um, uh, that made them feel like aristocrats. Um, because if the queen was buying, which was where then I could buy some too, or maybe I feel a little bit closer to the queen. So a lot of what we think of as the linkage between mass marketing and mass production, um, originated which would. So, uh, so if, if you would compare, um, the, the, the, the, the new ways in, uh, in which they approach, uh, production and supply chain for that matter, I mean. they went further than production if you as a company producing something start digging a canal, then then you're really looking at your at your whole supply chain. So you know, what things can we can we learn from? And what year was this? This is the 16 1700. So they met from the sort of 1760s up and through the about 1800. And so you know, right through the American Revolution, through the French Revolution was it was a time of great turmoil. It was a time of serious disease. It was a time of political instability and many many other uncertainties. And these folks chose, you know, not to agitate politically so much as to set their minds and put their nose to the grindstone and start building and build things, build infrastructure that would create the society that they had in mind. And so the book is a little bit of a polemic about certainly in the United States. We've lost a lot of that mindset of building as a way to contribute to the world. And even the idea that industry before it's something with belching smoke stacks or long supply chains, industry is a human virtue. It's the capacity to work toward a particular goal in a regular and applied way. And the industry us revolution actually preceded the industrial revolution. And I'm trying to kind of revive the word industry as something that we want to take, want to be proud of and want to encourage people to both work in and also display when they were. And there's been a movement over the last 30 or 40 years somehow that somehow by de-industrializing the United States will solve all of our climate and environmental problems. But it's also become very, very clear that if those are your top priorities, not to mention many other priorities, we'll need to re-industrialize. We will not decarbonize the economy without making a whole lot of new stuff. And we have to learn how to make that stuff better and more efficiently and get it to where it needs to be. And so those are all sort of lessons that we can draw from these folks 250 years ago. So industry used to be 100% connected to smoke stacks and black smoke and things that were, well, what we would look at today as completely killing the environment. But I'm guessing that now with the technology that we have available today, we could re-industrialize in a much more sustainable way. Exactly. And we have to start with the imperative to do that. And then you say, how can we do that? And again, one of the things we learn from these folks when they invented, I don't really like the industry, 1.0, 2.0, 3.0, 5.0, 6.0. But these guys were doing the zero to one. And they had to create new logistics networks. They had to create new ways of working, new work forces, new forms of management and information technology. And those are many of the things we live with today, including a kind of slavishness to a clock that coordinates everybody on the same time. Obviously, computers in the pandemic in the last five years, if not the last 50, have taught us that we don't need the clock anymore to coordinate. Digital systems are very good in coordinating in other ways. And we have to reinvent work. We have been reinventing work. We're still reinventing work. And what are the new ways of work that we want to have as we move forward? What is a different way to think about industrial work, industrial life, industrial systems? And I think in writing the book, that's really the phrase that to me captures all of these things is industrial systems, manufacturing, logistics, electric power, food supply. These are the systems that run our modern industrial life. We have to maintain them. We have to improve them. There's no better way to learn how to improve them than by maintaining them, which we've generally undervalued. And there's knowledge, human knowledge at every point in where we work with those systems. And the more we can value and recognize and build on that knowledge, the better off we'll be. At a place where I work here at MIT, we weigh over emphasized design and novelty and new products. And all the stuff that's coming in 10 or 20 years, meanwhile, the sidewalks that we're walking to work on are crumbling beneath our feet. You know, the transportation systems are falling apart. And as a consequence, none of our smart young people want to go into working in those systems yet. We desperately need people to recognize the dignity of maintaining and running those systems and how important it is to all of our lives. So we're looking too much for the next shiny object. It's what you're saying, I guess. So what should we be doing? So what are the main areas we should focus on? So as I said, we should be focusing on maintenance. And the way I describe it in the book is process innovation versus product innovation. We always need product innovation. We're very good at it in the United States. And yet the phrase with every Apple product, if you've ever bought one, first thing you see when you unlock the box is designed by Apple in California. And so the implication behind that phrase is the important cool work is done in California, who knows and who really cares where the things are actually made and how they get here, right? So that hides a whole crucial part of the production process to get these things to our door. I think people should be more conscious of that for one thing. It's also not true that Apple really throws it over the wall to China. It gets made there. Many hundreds of Apple engineers spend many, many, many months with every new phone, understanding the production process and on the production lines and helping improve and understanding where the next things go. And we need to recognize that process innovation is as important as product innovation. And process innovation often comes either from manufacturing or direct involvement in supply chain, because that's how you see what's wrong, what can be done better, where we're not taking advantage of the latest technologies and so on. Instead, we have far too many notes about around the advanced design and the new products and far too deep of valley of death that those products don't make it into users' hands, partly because they're not always built with the process in my. And so, and now, and there's a new, well, I don't know if it's a shiny object, but I'm curious what your opinion is. There seems to be a new potentially shiny object, which is called AI. And that's going to solve everything and replace anything and everybody. I already took from your book that you're probably not agreeing with that statement. I don't agree with that statement. And I'm not yet convinced that AI is really all that different from other forms of mechanization and automation and new technology. It is an embodiment of human knowledge. It gathers what humans have done and learned before. It puts it in one place in a very convenient way that's very useful and helpful for people to work with. I actually wrote a book 10 years ago called The Myths of Autonomy, which is about all the ways that systems that people think are autonomous are really deeply embedded in human knowledge. None of that is to say AI is not important and useful and won't and shouldn't change the work that all of us are doing. But as a panacea to do something that's never been done before is a long way from there. Plus, it often takes 10 or 30 years for these industrial systems to transform. And AI, there's a lot of hyper and physical AI, what I've worked in for 40 years, which is called robotics, and very difficult challenging world. And a lot of the startups are, you know, they're run by very smart, exciting, inexperienced, 20-somethings. And as with the driverless car world, they run into the complexity of the real world, physical world, the world of work, the human world of interaction with systems. Not to say that those things aren't all desperately in need of technological aids they are. It's a slower, longer process than people are realizing. We're very good at that replicating web pages and, and, you know, put the text based on what we can get from the internet. (laughing) Even something as simple as driving a truck down a straight highway is not a self problem for AI, right? - No. So we're definitely not being replaced. And what I took from your book is that in your opinion, humans play a very, very, very important role in whatever process we have. Whether it's getting products from A to B or producing products or improving processes. So why is that role of the human so important and how are we not being replaced by automated systems? - Yeah, so I used an anecdote in the book where I was speaking with a man who led a major, actually European manufacturer. He owned 350 factories in his organization. And they were making a product that is highly regulated, highly standardized, and they have a backlog of 20 years. And it's more or less the same product they've been making for the last 30 years. And actually, the iPhone is not that different in the sense of a very highly standardized product and very large volume. And I asked this guy, you know, what keeps you up at night? And he said, organizational learning, well, that's interesting. You think that, you know, the product that you're making it hasn't changed, it doesn't change very much. Why do your organization need to be learning all the time? And he said, well, you know, Brexit and Ukraine and economic changes, you change one gasket on our product and you have to teach a person how to put it around the seal in a different way. So manufacturing is a very dynamic process. Even when you're building a very standardized product, technology changes, the products themselves change. And people are incredibly good at those adaptations. And anything that doesn't require adaptation has likely been automated already in some way. It's drilling a hole in a square pattern or something that we don't have people do too much anymore. And so technologies are very good at doing those things that we understand well, that are relatively repeatable. And we should have machines doing as much of that as we can. And at the same time, we should have people thinking about how to do things better, what's different, how can we change overseeing the machines, you know, and if one person with 10 machines can do the job of 10 people, that's a good thing. That's called productivity. That's actually the definition of productivity is doing more work with less labor hours, right? You want that? - Yeah. - You want to take care of the people who, the nine people who aren't doing that work and make sure that they find an interesting place to go. Right now in the United States, we have a labor shortage and we've had one for a long time. In fact, the whole history of the US has been characterized by a shortage of labor with the exception of a few periods. And so actually one hopes that in logistics and automation we'll have an advantage over China in the coming years because China doesn't have a labor problem. They don't have a labor shortage. And in some ways, it's less incentive to automate their processes than we have here. And the scarcity of labor has always been a good thing in American industry because people have chosen to, again, process innovation in interchangeable parts, mechanized manufacturing, later automated manufacturing. These are all responses to challenges with the supply of labor. And so I mentioned the book I did part of this is called, the work of the future, and it was part of a larger MIT project. But in 2018, people were coming to MIT and saying, "I need MIT to tell us if a robot is going to take my job." Yeah. And we didn't look that hard at it. So we decided it concluded, actually the problem is going to be not too many robots. It's going to be not enough robots. Then the pandemic happened and that put that problem into very stark relief. And if you look at the jobs that people do today, as compared to 1940, 75% of them were an invented in 1940. So it is crucial to create new industries, which create new jobs for people. Yeah, chances are most of the jobs that you and your friends do, your grandmother, your great-grandmother, never heard of. Web developer, podcaster, aircraft designer, cybersecurity specialist. That's true. Network administrator, these jobs, they didn't even exist in my parents' time. And so it is crucial that to offset these productivity improvements, we are constantly doing new things and creating those new jobs for people. So when will we arrive at that intersection where the, and I'm generalizing here, the increase of productivity will intersect with the labor shortage. So when are we going to, well, hopefully say to everybody in the world, we're going to move to a three-day weekend because we're just too productive. Well, we've already moved to a 95 sort of day. That didn't happen in the first century of industrialization. Or any weekend for that matter, right? Yeah, that's true. And so, again, I do think the crucial question is actually not do you improve productivity, which you have to? It's who gets to reap the benefits of that improvement? And how are those benefits shared between workers and owners? And there are definitely ways to do that well. There are definitely ways to do that poorly. And we need more people doing it well. So more people have a chance to reap those benefits. So are you seeing a good or positive examples now of companies that are approaching this in the right way? Yeah, for sure there are. And I say this in the book that there are companies all over that are doing a good job, where they're competing with China in manufacturing. They have employees who are motivated and well-bought in and supporting middle-class lifestyles. And it's not even that hard to find them. But there aren't enough of them. And we need many more of them. And we need the bigger companies to-- which, again, some of the big companies also do a good job at that, some of them don't. And we need those general best practices to be much more broadly distributed. And that includes technology adoption, right? There are many companies, especially in manufacturing logistics, doing things the way they've always done it. And it's very hard to change when you've got to get those deliveries on time and you're under the gun on a regular basis. And that's understandable resistance to change. And at the same time, we have a lot more technology available than it's really used at a large scale. And we need to do a better job of deploying that out into the world. And we had a huge crisis around the port of L.A. during the COVID crisis, where there were hundreds of ships sitting outside waiting to unload goods. And the solutions were not automated robots or driverless trucks. The solutions were things like, hey, maybe keep the port open till midnight instead of closing at 6 o'clock every night. And or the truckers would need six different web pages, just to figure out where to pick up their load. Just take a-- I sometimes jokingly refer to this as, it's '90s IT, right? Is what people need in that case. And some of those simple fixes went a really long way toward unplugging those ports. And there's more of that needed than people recognize before we're even ready for something like quantum computing and logistics, right? Yeah. Yeah, sometimes in cases like that, it's people that are both the problem and the solution. So I mean, there's so much to talk about, but I'm going to ask you to take out your crystal ball if you have one. And well, I'll let you prompt it and look into the future. And then tell us what you see about the, well, I guess, the next industrial revolution. Right. So I'm actually very clear in the book. And I'm going to look this up. where I don't try to predict the future right no there's plenty of people who do that they're all wrong and I'll get into that game. What I am trying to do is help people think about how to talk about the future in a way that is not utopian right it's not like AI is gonna fix everything and we're all gonna be sit back and be wired to our screen but realistic and optimistic right and and really provide guidelines that the subtitle of the book is an enlightenment guide to the next industrial revolution for people to to talk about the future of industry in a more realistic way that I think is a better chance of actually happening and being beneficial and those guidelines are things like marry process innovation to product innovation value knowledge at every level of the organization and you know think about actually should probably yeah marry product improvement to process improvement avoid utopian innovation speak think in terms of systems emphasize adoption designed for resilience and flexibility get excited about maintenance and repair value knowledge at every level at work see the human intelligence involved embodied in every product and system and then finally especially for young people form your own lunar societies to collaborate and explore and you know those guys guidelines I can stand behind and I can argue them and I really think they're deeply important I'm gonna leave it to really a new generation of young industrial entrepreneurs founders engineers builders operators to make the future the way they see fit and but I think if they do that with some of those guidelines in mind that'll be a more productive future than the sort of Silicon Valley give me all your data and I'll you know I'll I'll shape the way you see the world kind of view that we get stuck with all too often which is not really how industrial systems work it's not how industrial systems change and it's not the world we need I couldn't think of a better ending to this podcast David thank you so much it's I it was I had really enjoyed reading your book so so thank you very much for for writing it you pick my interest in some of your other books as well thank you for sharing this this story with us thank you I'm just great topic and logistics is a super important part this podcast was powered by David Mendel David Mendel is Professor of Aerospace Engineering and Dippner Professor of the History of Engineering and Manufacturing at MIT he has led all participated in more than 25 oceanographic expeditions written seven books and he holds 34 patents in RF navigation autonomous systems and AI assisted piloting he's also found an executive chair of Umatics a navigation technology company and co-founder of unless an investment firm that is catalyzing the next industrial revolution his latest book is called the new lunar society an enlightenment guide to the next industrial revolution thank you for listening to does logistics matter for more on trend and innovation in supply chain and logistics a visit our blog at logisticsmatter.com if you want to be a guest on this podcast please send an email to podcast@ logisticsmatter.com this podcast was produced by Demetri Flughle the music is based on the sample by Ruggerman and produced by Michael Spengler follow the podcast in your favorite podcast apps so you don't miss new episodes