By Daniel Theobald, CIO and co-founder of Vecna Robotics
This paper discusses the opportunities discovered through technological innovation, and how robots and humans working together create critical economic benefits. This is the conclusion of a four-part series focused on robotic integration in the material handling value stream.
A recent study by Baylor University found more than a third of people are afraid they will lose their job to a robot. While this fear is understandable, evidence indicates robotic integration will increase roles, worker safety, productivity, and satisfaction.
Humans are, and will always be, a crucial part of the value stream. Robots can handle repetitive functions, quality precision, and around-the-clock work, but they cannot handle strategic decision making.
Humans, on the other hand, use reasoning to work around the unforeseen and analyze situations to improve processes, but they should not work a 24-hour shift – it is not physically or mentally safe.
It is imperative to keep both humans and robots in the mix to create the flexible workflows needed to meet the everchanging demands of an ever-changing world.
Neither humans nor robots can do it alone; they must work as a team. Even with automation, the extreme labor shortage within the material handling industry is making it impossible for companies to meet staffing requirements.
Large organizations are turning to robots to remain competitive and not go out of business. In addition, history has proven innovation leads to job creation, not loss.
Integrating automation is not only good of the organization but good of the employee. It creates better, safer, more fulfilling roles that people want, not just need.
By combining innate human strengths with those of automation, a real sustained economic value is established.
The urge to turn the lights out, and the reason not to
The US jobless rate is at a 49-year low of 3.7 percent. Yet, the exponential growth of e-commerce demands an additional 452,000 material handling positions in 2019 that employers are struggling to fill. In order to make up for the shortage of full-time workers, companies often turn to temporary or seasonal staff.
This leads to increased recruiting, hiring, training, and turnover costs. To entice workers back into the warehouse, organizations have doubled the hourly rate in the last five years.
The annual wage increase for material handling workers is between 5.8 and 6.2 percent, far above the 2.7 percent national average.
After looking at these statistics, many operation managers are tempted to turn the lights out and run only with robots. But those who have tried – Tesla, for example – realized this does not work.
Tesla’s human-free “last-mile manufacturing” was intended to save the company money but led to Tesla missing every single one of their production goals and resulted in 100,000 recalls.
Tesla CEO Elon Musk’s intricate system of automation could not properly adapt to changes to stay on schedule or identify and correct faulty parts to deter costly mistakes.
Musk said, “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”
If companies want to deliver on customer expectations to grow revenue, not just save money, humans cannot be taken out of the value stream.
Attracting workers to the material handling industry
As previously mentioned, the availability of material handling workers is at an all-time low. The rural locations and tedious roles within the industry have deterred many millennials from pursuing jobs in the sector.
MHI 2017 Annual Industry report showed 62 percent of supply chain professionals indicated hiring and retaining skilled workers as their company’s largest obstacles.
Workplace studies reveal millennials want flexibility in their role, time, and location and increased engagement within their organization. They want to be part of companies that foster learning, development, and career growth. This type of culture benefits the employer as well.
A recent Gallup poll reported engaged employees lead to 20 percent higher sales, 41. 5 percent lower turnover, 70 percent fewer safety incidents, are 21 percent more productive, and 27 percent more likely to score highly on performance reviews.
Automation and advanced technologies are accelerating job growth and creating the flexible, rewarding, and engaging roles that are necessary for both the success of the organization and that of the individual employee.
Automation’s effect on the workforce
Jobs will be changed by automation, and will increase employees’ quality of life, productivity, and opportunities tenfold.
A study by Oracle found HR leaders believe AI (Artificial Intelligence) will positively impact learning and development by 27 percent, performance management by 26 percent, compensation/payroll by 18 percent, and recruiting and employee benefits by 13 percent.
A look back in history shows technology accelerates job creation. People were scared of losing their jobs when the assembly line was introduced, but the increase in Ford’s productivity allowed the car maker to lower the price of cars by over 50 percent, increasing demand which in turn, led to over a 1,000 percent increase in jobs.
Additionally, the introduction of the PC created approximately 15.8 million jobs since the early ’80s. Robots, are expected to affect 1.8 million jobs by 2020 but create 2.3 million roles.
The material handling industry will need employees to:
- choose, maintain, and manage automation strategies, implementation, and installation plans;
- coordinate diverse technologies within the organization (robots, drones, software);
- train counterparts on the implementation, management, and maintenance of automated technologies and their corresponding systems;
- analyze and evaluate data collected by automation in order to design new and more optimal uses; and
- provide customer service as increased production rates lead to rising demand.
Training and educating workforces to work with automation
McKinsey estimates 75 million people around the world will need to be retrained due to the increase in automation.
These new jobs will require workers with advanced mechanical competencies, computer training, data analytics, management expertise, and interpersonal skills.
However, the current workforce has not been able to hone these abilities, and the majority of the future workforce may not be given the opportunity to learn them.
The manufacturing, warehousing, distribution, logistics, and automation industries should support internal and external initiatives to educate and develop these skills within the current and future workforce.
This means working with local governments to update primary and secondary school curriculums and taking active roles to re-train and re-educate existing staff. Investing in training and development not only benefits the worker but the organization.
The Association for Talent Development reported, companies that invest in development have a 24 percent higher profit margin, decreased turnover rate, and overall outperform those who do not grow by 202 percent.
Forward-thinking organizations recognize automation will empower people in new roles, not replace them. They are ready to invest in the training, development, and social causes that will make it possible.
Robotics bring a higher quality of life
According to the Human Capital Institute, by 2020, 75 percent of organizations will implement AI projects, and these technologies will transform organizations. It is the material handling industry’s responsibility to decided what type of transformation this will be.
A collective workflow is where humans can explore, learn, grow, and partner with intelligent machines to meet new challenges; this is how the industry can find value and yield superior economic results.
And, above all else, it is how workers will receive a higher quality of life and more gratifying employment options.
About the author: Daniel Theobald co-founded Vecna Technologies in 1998, with the mission of empowering humanity through transformative technologies. He’s been at the forefront of robotics R&D for over 20 years, partnering with DARPA, DoD, NASA, NIH, USDA and many others.
Today, he is the Chief Innovation Officer of Vecna Robotics. Vecna Robotics supplies Automated Material Handling, Hybrid Fulfillment, and Workflow Optimization solutions featuring mobile robots powered by a unique learning autonomy stack and the world ’s first orchestration engine, Pivot.al.
Theobald is co-founder and President of MassRobotics and holds a bachelor’s and master’s degree in Mechanical Engineering from MIT. He has received the Henry Ford II Scholar Award, NSF Fellowships, and a Hertz Fellowship award.