Rise of the robots increases in labour intensive areas

ROBERT GOTTLIEBSEN
July 25, 2017
The Australian

Opposition leader Bill Shorten can see that shift allowances and penalty rates are an election winner but the timing of his push makes it incredibly dangerous.

In my reading while overseas I saw clearly that the decades long talk about robots is being replaced with action —the world is in the brink of an incredible rise in the use of robots in the labour intensive areas of food preparation, warehousing and retailing. Robots will focus in the areas where labour is expensive.

Some 300,000 Australia are currently employed on penalty rates that are substantially below the award thanks to employer/ union deals. Fair Work Australia is aiming to cement in the discounts via lower official penalty rates but Bill Shorten wants to end the discounts so sending the penalty rate cost burden through the roof. The higher costs will bring the robotic revolution to Australia with great speed. . 

I would like to share with you reports I have picked up around the world which show just where robotics is moving.

MIT Sloan’s Andrew McAfee and Erik Brynjolfsson say the standard view is that robots are best suited for work that is dull, dirty, and dangerous. They now add one more “D” — work that is “dear,” or expensive. It’s a chilling conclusion for high cost Australian employees. 

Lets start with food preparation. McAfee and Brynjolfsson say that the most advanced robot cook they have seen is the hamburger maker developed by start up Momentum Machines. 

It takes in raw meat, buns, condiments, sauces, and seasonings, and converts these into finished, bagged burgers at rates as high as 400 per hour. The machine does much of its own food preparation, and to preserve freshness it does not start grinding, mixing, and cooking until each order is placed. It also allows diners to greatly customise their burgers, specifying not only how they’d like them cooked, but also the mix of meats in the patty. It works. 

Traditionally avocados, tomatoes, eggplants, which are irregularly shaped and not rigid, are difficult for robots because robots’ senses of vision and touch have historically been quite primitive — far inferior to humans. But they are catching up fast. 

From food preparation we move to retail.

The FT reports that just as China’s rising labour costs — now higher than Latin America — pushed manufacturers to add robots to their production lines, so in retail China is becoming more automated.

For example shelves of a Bingo Box outlet in Shanghai are lined with instant noodles, beer, and bags of traditional snacks but there is no staff. The FT says that the Chinese retailer has taken pole position in a race to build unmanned shops, with more than a dozen in operation and hundreds more planned. The BingoBox store entrance is unlocked by the use of mobile phone app. Customers scan items for payment, with theft prevented by the use of real-name registration and video monitoring. Chinese eCommerce giant Alibaba has trialled a convenience store that does away with check-outs — purchases are automatically made when a customer leaves with an item. Wahaha, one of China’s largest beverage companies, last month signed an agreement with a technology company to buy 100,000 checkout systems for staff-less stores.

From retail to warehousing and the Wall Street Journal’s Brian Baskin says that robot developers are close to a breakthrough — getting a machine to pick up a toy and put it in a box.

It is a simple task for a child, but for warehouses it has been a big hurdle to automating one of the most labour-intensive aspects of e-commerce: grabbing items off shelves and packing them for shipping.

Baskin says several companies, including Saks Fifth Avenue owner Hudson’s Bay Co and Chinese online-retail giant JD. Com Inc has recently begun testing robotic “pickers” in their distribution centres. Some robotics companies say their machines can move gadgets, toys and consumer products 50% faster than human workers.

Baskin says retailers and logistics companies are counting on the new advances to help them keep pace with explosive growth in online sales and pressure to ship faster.

U.S. e-commerce revenues hit $390 billion last year, nearly twice as much as in 2011 and they are rising even faster in China, India and other developing countries.

That is propelling a global hiring spree to find people to process those orders.

U.S. warehouses added 262,000 jobs over the past five years, with nearly 950,000 people now working in the sector. Labor shortages are becoming more common, particularly during the holiday rush, and wages are climbing. 

That’s exactly what is ahead for Australia but robots look like “coming to the rescue” — but in the process employment will change.