Automation is once again in the spotlight, this time being identified as one of the technologies expected to have the most influence in the business world over the next decade.
According to management consultants, McKinsey, twelve emerging technologies—including the mobile Internet, autonomous vehicles, and advanced genomics—have the potential to truly reshape the world in which we live and work.
Cutting through the hype to identify the technologies that will really matter the “Disruptive Technologies“ report aims to assess the impact they will have on life, business and the global economy by the year 2025.
Justifying the inclusion of what it calls ‘advanced robotics’ the report cites a 170% growth in sales of industrial robots between 2009 and 2011.
It’s certainly not a surprise to anyone looking at the fast moving consumer goods (FMCG) sector, such as food, beverage and paper.
Many of the new developments in Europe and the Middle East involve the highest levels of distribution center automation, an exciting insight into what the near future holds.
Sitting alongside manipulated genes, energy storage and 3-D printing, automation is highlighted for its increasing capabilities to take on tasks once thought too delicate or uneconomical to automate. Whilst the idea of robots with enhanced “senses,” dexterity, and intelligence will grab the headlines, the report authors look to the 320 million manufacturing workers worldwide (12% of the global workforce) and the potential savings to be made from automating their jobs: “Advances could make it practical to substitute robots for human labor in more manufacturing tasks, as well as in a growing number of service jobs, such as cleaning and maintenance.”
Naturally, automation and employment factors are closely linked, which means businesses have to tread carefully. Respect for employees is just as vital to a brand’s reputation in today’s interconnected world, and it’s not just about reducing the head count as other factors and regional variations that are just as influential. Marc Wulfraat, Founder and President of supply chain experts, MWPVL, points out that the market dynamics are different from country to country and wage rates for middle class labor, population density, fuel costs, and land availability all have an impact on the uptake rates of automation technology.
And yet, the population profile could prove to be an unavoidable issue: “We are facing a declining work force population resulting from the forthcoming wave of baby boomer retirement,” says Marc “Over the next two decades it will become increasingly difficult to attract and retain warehouse labor, especially when it comes to 7x24x365 environments where physical labor requirements are demanding.”
“There is no doubt in my mind that we in North America are on the cusp of a major increase in automation investment for logistics operations in the manufacturing sector. We are simply not getting any younger as a population.”
Marc’s worms-eye viewpoint is an interesting counterpoint to McKinsey’s ambitious claims to provide policy makers with new metrics that ‘capture more than GDP effects’ and ‘abandon assumptions about where competition and risk come from’.
In reality, warehouse facilities are already capable of shipping 7 000 to 10 000 pallets daily with only a handful of people, and food production factories are already in existence that use only laser-guided vehicles to perform all pallet movement in pairs, including truck loading.
Large manufacturing companies that operate in economies where labor and benefits are expensive simply cannot be profitable if they design logistics operations that are predicated on the use of extensive manpower.
Order fulfillment and the challenges of e-commerce are also presenting new pressures for logistics, and with unprecedented rates of innovation, there is no shortage of companies interested in acquiring automation technology.
Adds Marc: “The speed and reliability of shuttle technologies, robotics, and mini-load machines have advanced so dramatically that these solutions are now accessible to the middle market. The intelligent design of these systems is enabling nearly perfect order accuracy at throughput rates that reduce labor requirements by as much as 70%… it really is the most exciting time to be in the logistics industry!”
Perhaps the most we can predict about the next decade is that businesses will continue to make the most efficient operations possible in tough economic conditions, whilst struggling to attract and retain labor. Meanwhile, Governments will exploit the revenue that those technological advances generate, advances perhaps inspired by the social welfare and austerity measures the policy makers themselves initiated.
If the report is to believed, businesses need to act quick to stay ahead. The potential benefits of the “new” technologies are tremendous, it says, but so too are the challenges of preparing for their impact. As the report concludes: “If business and government leaders wait until these technologies are exerting their full influence on the economy, it will be too late to capture the benefits or react to the consequences.”