ARTIFICIAL INTELLIGENCE [310253]

CASE STUDY
UNIT I (INTRODUCTION)

Title:-
Kroger: How this U.S. Retail Giant Is using AI and Robot to prepare for The 4th Industrial
Revolution

Objectives:-
We consider that the brief presentation of the industrial revolutions behind The Fourth Industrial
Revolution it is necessary and requires understanding the perspective on how way this last one is different
from them. Making this summary presentation from an evolutionary point of view, we tried to highlight
their role and impact for the society during the periods to which they belonged. Regarding the predecessors
Industrial Revolutions that are ended, it can be said that they represented an important aspect of the
development of modern society on the grounds that they contributed to the radical change of the society,
to the quality of life, of the economy and of states policies. The importance of industrial revolutions for
the global economy, for states, companies and citizens, consists in the fact that they change the hierarchies
and open the perspectives for a better future as well as they satisfy their needs in new ways and change
radically the quality of life. At the Davos Conference in 2016, the theme of a new industrial revolution
became official and the foundations of the Fourth Industrial Revolution were laid. That revolution marks
an essential moment in the evolution of humanity

Outcome:-
Identify and apply suitable intelligent agent for various AI applications
Apply the suitable algorithms to solve AI Problems

Theory:-
Kroger, one of America's largest grocery chains, has decided to embrace technology to help it
survive and thrive in the 4th industrial revolution. With 2,782 grocery stores under nearly two dozen
names in 35 states, Kroger plans to leverage its data, shopper insights and scale to help it remain a leader
in the marketplace of the future. According to a study by the Food Marketing Institute, online grocery is
expected to account for 20% of all grocery retail by 2022 and reach $100 billion in consumer sales, so
Kroger and its competitors are smart to figure out ways to use technology to their advantage.
Restock Kroger Initiative
In the fall of 2017, Kroger unveiled an audacious three-year $9 billion plan called Restock Kroger with
the goal to build out its e-commerce, digital and omnichannel businesses and redefine the customer
experience. The grocer already delivers 3 billion personalised recommendations each year, but they will
enhance the personalization efforts to "create different experiences for customers." Not only will shoppers
receive useful content digitally, but also "inspiration" through product-related content and recipes. The

expansion of Kroger's Scan, Bag, Go pilot programme that allows shoppers to scan products as they shop
with their smartphone is also part of the Restock Kroger initiative. After being tested in 20 stores, it should
be unveiled to 400 stores by the end of 2018. Additional investment in Internet of Things (IoT) sensors,
machine learning, and artificial intelligence will be made to increase the efficiency of Kroger's operations.

Delivery by autonomous vehicles

Today, we can get groceries delivered, but Kroger is testing the delivery of the future—grocery delivery
by an autonomous vehicle. Kroger partnered with Nuro, a Silicon Valley company that specialises in
autonomous vehicles for delivery, on its pilot programme. Customers can use Kroger's ClickList ordering
system and Nuro's.

Automated warehouses
A partnership between Kroger and British online-only grocer Ocado is expected to help Kroger automate
its warehouses and use artificial intelligence to bolster its bottom line. Ocado claims to have the world's
most sophisticated automated grocery warehouses and has worked with Uber and Instacart to test delivery
options, and it's this know-how that Kroger aims to leverage with its investment. The companies
announced they would open three new warehouses that Ocado will operate followed by another 17 in the
next three years. Ocado's warehouses are run by robots that are powered by machine learning algorithms
to navigate around the warehouse and pick products for orders. With this investment and access to Ocado's
technology, Kroger will get products to stores more efficiently.

Marketing gets a boost from analytics

Kroger's in-house analytics firm 84.51 deployed Kroger Precision Marketing that uses customer purchase
data from Kroger's 60 million shopper households to launch marketing campaigns across a digital
spectrum. This helps enhance personalization for customers, but also allows product manufacturers
excellent opportunities to market to their ideal customers on Kroger

Machine learning
84.51 has made it a priority to enable and embed machine learning into Kroger's operations where a
"machine learning machine" can build and deploy a lot of models with very little human intervention in a
project called Embedded Machine Learning. With a mission to "enable, empower and engage" machine
learning within the organisation, this was a sophisticated approach to machine learning with Solution
Engineering

Smart shelves
When a Kroger customer walks down the aisle with the Kroger app open, sensors identify the shopper
and provide personal pricing and highlight products the customer might be interested in via smart shelves
technology.
With this commitment to artificial intelligence, machine learning, and smart technology, Kroger seems
on the right track to staying competitive for the 4th industrial revolution
The 4th Industrial Revolution System
The Fourth Industrial Revolution is the current and developing environment in which disruptive
technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial
intelligence (AI) are changing the way modern people live and work. The integration of these technologies
into manufacturing practices is known as Industry 4.0.
The Fourth Industrial Revolution heralds a series of social, political, cultural, and economic
upheavals that will unfold over the 21st century. Building on the widespread availability of digital
technologies that were the result of the Third Industrial, or Digital, Revolution, the Fourth Industrial
Revolution will be driven largely by the convergence of digital, biological, and physical innovations. Like
the First Industrial Revolution’s steam-powered factories, the Second Industrial Revolution’s application
of science to mass production and manufacturing, and the Third Industrial Revolution’s start into
digitization, the Fourth Industrial Revolution’s technologies, such as artificial intelligence, genome
editing, augmented reality, robotics, and 3-D printing, are rapidly changing the way humans create,
exchange, and distribute value. As occurred in the previous revolutions, this will profoundly transform
institutions, industries, and individuals. More importantly, this revolution will be guided by the choices
that people make today: the world in 50 to 100 years from now will owe a lot of its character to how we
think about, invest in, and deploy these powerful new technologies
• FIRST INDUSTRIAL REVOLUTION
o The First Industrial Revolution was marked by a transition from hand production methods
to machines through the use of steam power and water power. The implementation of new
technologies took a long time, so the period which this refers to was between 1760 and
1820, or 1840 in Europe and the United States. Its effects had consequences on textile
manufacturing, which was first to adopt such changes, as well as iron industry, agriculture,
and mining although it also had societal effects with an ever stronger middle class
• SECOND INDUSTRIAL REVOLUTION
o The Second Industrial Revolution, also known as the Technological Revolution, is the
period between 1871 and 1914 that resulted from installations of extensive railroad and
telegraph networks, which allowed for faster transfer of people and ideas, as well as
electricity. Increasing electrification allowed for factories to develop the
modern production line. It was a period of great economic growth, with an increase in
productivity, which also caused a surge in unemployment since many factory workers were
replaced by machines
• THIRD INDUSTRIAL REVOLUTION
o The Third Industrial Revolution, also known as the Digital Revolution, occurred in the late
20th century, after the end of the two world wars, resulting from a slowdown of
industrialisation and technological advancement compared to previous periods. The
production of the Z1 computer, which used binary floating-point numbers and Boolean
logic, a decade later, was the beginning of more advanced digital developments. The next
significant development in communication technologies was the supercomputer.
History Of Fourth Industrial Revolution System
The phrase Fourth Industrial Revolution was first introduced by a team of scientists developing a
high-tech strategy for the German government. Klaus Schwab, executive chairman of the World
Economic Forum (WEF), introduced the phrase to a wider audience in a 2015 article published by Foreign
Affairs. "Mastering the Fourth Industrial Revolution" was the 2016 theme of the World Economic Forum
Annual Meeting, in Davos-Klosters, Switzerland. On 10 October 2016, the Forum announced the opening
of its Centre for the Fourth Industrial Revolution in San Francisco. This was also subject and title of
Schwab's 2016 book. Schwab includes in this fourth era technologies that combine hardware, software,
and biology (cyberphysical systems), and emphasises advances in communication and connectivity.
Schwab expects this era to be marked by breakthroughs in emerging technologies in fields such as
robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the internet of
things, the industrial internet of things, decentralised consensus, fifth-generation wireless technologies,
3D printing, and fully autonomous vehicles. In The Great Reset proposal by the WEF, The Fourth
Industrial Revolution is included as a strategic intelligence in the solution to rebuild the economy
sustainably following the COVID-19 pandemic.

Applications Of Fourth Industrial Revolution

In this section, we introduce an overview of some applications of the Fourth Industrial Revolution.
Also, we provide a case study for these applications by KUKA Group in many fields. KUKA is an
international automation corporation based in Augsburg, Germany. As a world-class provider of
intelligent automation solutions. In areas such as automotive, electronics, metal & plastic, consumer
products, e-commerce/retail, and healthcare, KUKA provides everything from a single source: from
robots and cells to completely automated systems and their networking .
The “Smart Factories” are automation solutions from KUKA, which is able to transport aircraft
components around the production hangar with millimeter precision. The employees at the Airbus
production plant move enormous A380 fuselage sections, weighing 90 tons and measuring 15 meters in
length around a
building the size of a football stadium. This is made possible by the KUKA omni Move mobile transport
platform, a transport vehicle for heavy loads that is equipped with omnidirectional Mecanum wheels
Similarly, using techniques such as Machine-to-Machine (M-2-M) and intelligent robots as
applications from the KUKA company. Robot-based KUKA system technology for machine tool
automation is used, among other things, for the loading and unloading of machines and supports elements
of Industries 4.0 . In the KUKA’s site in Augsburg, work 7 robots, which is a typical production
environment at an international machine manufacturer .
Another application of industry 4.0 in the medical sector, automation solutions for greater
efficiency in hospitals, in areas of diagnosis and surgery to therapy, KUKA robots meet the stringent
requirements of the medical sector and are well-suited to a wide range of medical technology applications.
For this, KUKA offers a wide range of medical high-tech products, ranging from robot-based help systems
for surgery to assistive components for diagnosis or rehabilitation.
There are several applications for industry 4.0, for example, the KUKA corporation which works
in the areas, for instance, smart factories, M-2-M, computing cloud, intelligent robots, e-commerce, and
so on.
Advantages:-
1. COMPETITIVE ADVANTAGES: Industry 4.0 smart solutions and services offer a wide range of
competitive advantages for organizations that are able to successfully launch these new strategies
and technologies.

2. INCREASE IN OPERATIONAL EFFICIENCY: The hope for Industry 4.0 is that the next
generation of industrial revolution will drive even greater profitability for organizations, as they
are able to squeeze greater output from the same resource input.

3. BETTER PRODUCTS AND SERVICES: Whether it be product quality, safety, or customer

experiences, Industry 4.0 will drive greater visibility and throughput for operations, allowing them
to continue driving value for customers to retain business.

4. GROWTH OF MARKETS AND NEW MARKETS: With any technological revolution, new
services, products, and software will be needed to support the transformation of organizations.
This will create entirely new product categories, new jobs, and more.

5. IMPROVING LIVES OVERALL: With new technologies, higher profitability, and growth in
economies, peoples' lives as a whole generally get better, with income rising, better health
solutions, and overall a higher quality of life.

Disadvantages:-
1. HIGH COSTS: Not only is technology a major cost to consider, but the expertise in enabling the
technology to be implemented. Having the know-how in newer fields like IoT, Augmented
Reality, and AI can lead to major budget constraints, not to mention a lack of understanding among
all parties involved

2. HIGH RATE OF FAILURE: The difficulty in launching Industry 4.0 initiatives is that there is
often a lack of direction when it comes to establishing objectives. They are often cross-functional
projects with many stakeholders, which can mean projects can become mired in conflicting goals,
and may simply sputter out.

3. CYBERSECURITY: People, products, and equipment is, and will increasingly be, connected to
the internet. Although this gives us greater access to data via the cloud, it opens up opportunities
for hackers to access networks.

4. NEED FOR HIGHLY SKILLED LABOR: Manufacturing, and industry as a whole, continues to
rely on humans to enable production. However, with the move to digitally connected systems,
there is a greater need for highly skilled labor, which may unintentionally reduce the need for low-
skill labor..
Challenges:
Challenges in implementation of Industry 4.0

Economic

• High economic costs

• Business model adaptation
• Unclear economic benefits/excessive investment

Social

• Privacy concerns
• Surveillance and distrust
• General reluctance to change by stakeholders
• Threat of redundancy of the corporate IT department
• Increased risk of gender inequalities in professions with job roles most susceptible to
replacement with AI

Political

• Lack of regulation, standards and forms of certifications

• Unclear legal issues and data security

Organizational

• IT security issues, which are greatly aggravated by the inherent need to open up previously
closed production shops
• Reliability and stability needed for critical machine-to-machine communication (M2M),
including very short and stable latency times
• Need to maintain the integrity of production processes
• Need to avoid any IT snags, as those would cause expensive production outages
• Need to protect industrial know-how (contained also in the control files for the industrial
automation gear)
• Lack of adequate skill-sets to expedite the transition towards a fourth industrial revolution
• Low top management commitment
• Insufficient qualification of employees
Reference:
1) K. Schwab, The Fourth Industrial Revolution. New York: Crown Business, 2016.

2) S. Makridakis, “The forthcoming Artificial Intelligence (AI) revolution: Its impact on society
and firms,” Futures, vol. 90, pp. 46–60, 2017.

3) J. Goodfellow, Y. Bengio, and A. Courville, Deep Learning. London, England: MIT Press, 2016.

4) Arel, D. C. Rose, and T. P. Karnowski , “Deep Machine Learning - A New Frontier in

Artificial Intelligence Research [Research Frontier],” IEEE Computational Intelligence
Magazine, vol. 5, no. 4, pp. 13–18, Nov 2010.

5) D. Silver, J. Schrittwieser, K. Simonyan, I. Antonoglou, A. Huang, A. Guez, T. Hubert, L.

Baker, M. Lai, A. Bolton et al., “Mastering the game of Go without human knowledge,” Nature,
vol. 550, no. 7676, p.

6) N. J. Nilsson, The Quest for Artificial Intelligence: A History of Ideas and Achievements. New
York, USA: Cambridge University Press, 2010

7) A.Agrawal, J. Gans, and A. Goldfarb, Prediction Machines: The Simple Economics of Artificial
Intelligence. Boston, Massachusetts: Business School Publishing, 2018.

Conclusion
Through this case study we learn about using AI and Robot to prepare for The 4th Industrial
Revolution System

Prepared by: Mithun Pralhad Adhe

Class: Third Year (Computer Engineering)
Roll No: 01 Sign of Subject Teacher