QUESTION ON [Service Virtualization: Forklift Digital Drivers Who Can Work Remotely]

Carla is excited to take her new role as a Digital Fork-lift Driver, where she will drive a fork-lift remotely from home. Such instances of service virtualization are accelerating in workplaces. She used to drive fork-lifts earlier physically at production sites and distribution warehouses, which involved exposure to occupational hazards.

We define the virtualizability of a manufacturing/service process as its ability to perform operations without the need for the operator to be present physically at the point of production/service delivery. For example, GEODIS1 introduced remote controlled fork-lift truck. The concept of an in-person task is executed either by a machine or by a remote operator is called virtualization. Unlike automation, the focus is not limited to making machines execute tasks on their own. However, also on getting assistance from human (operator) who is not physically present when a product is manufactured, or a service is delivered.

1 Source: https://www.bloomberg.com/news/articles/2021-03-31/booming-e-commerce-spurs-geodis-to-add-remote-forklift-drivers

Figure 2 (a) Digital fork-lift driver (b) Remotely operated fork-lift

Pre-Service Virtualization Scenario: Assume only one driver is available in a shift. There are three drivers in total, who work in shifts from 8am to 4pm, 4pm to 12 midnight, and 12 midnight to 8am. The drivers physically drive the fork-lift truck to pick up an item and drop off the load at the unloading point. It used to take the driver an average of 10 minutes to complete the trip. The

orders for load pick up arrive at the rate of 5 per hour. Both order inter-arrival times and trip times are exponentially distributed. If the waiting cost of an order is $0.1/ minute, what is the customer order waiting costs per day? Here waiting time refers to the time from order arrival to order completion.

Post-Service Virtualization Scenario: Three drivers work from home in shifts from 8am to 4pm, 4pm to 12 midnight, and 12 midnight to 8am. The drivers virtually drive the fork-lift truck to pick up an item and drop off the load at the unloading point. It now takes a driver an average of 9 minutes to complete the trip. The orders arrive at the rate of 5 per hour. The order inter-arrival times are exponential but the virtual driving times have a coefficient of variation of 0.3. If the waiting cost of an order is $0.1 per minute, what is the customer order waiting costs per day?

Technology Justification: If the cost of a new remote-assisted forklift is $50,000 and the client wants a payback period of less than a year, does the annual waiting cost reduction alone justify the purchase of a forklift?

Discuss your workings. Assume the operations run 24/7 and 200 days a year and the old forklift truck has no salvage value.