Is Intralogistics Really That Evil? Part 1: Does Automation Kill Jobs?

unemployed_peopleWe enjoy working in the intralogistics industry. Sometimes, we explain to others what kind of projects and products we’re working on day-to-day. Unfortunately, it then doesn’t take long, before we get to listen to the same statements over and over again. Actually, they are not so much statements as they are accusations. So that’s the reason we would like to discuss them in a small series.

Probably the number one accusation is that our partially and fully automated facilities would replace human workers, rendering them obsolete. So we would be at least to a certain extent responsible when people lose their jobs. But is this really the case?

This view on the world of intralogistics is of course overly simplified and doesn’t do justice to the real-world circumstances. Every company decides on its own to which degree it is going to automate processes in its warehouse. These decisions are backed by business-management considerations, which are made when the company is struggling.

In such a situation it would be a big mistake to wait for the situation to improve by itself. That would only play into the hands of the competition and jeopardize the existence of the company. Once the calculations tell them that automation would save money, they have to do something.

What is behind all the automation?

Critics might interpret this as yet another example of greedy behaviour to the detriment of others. These people see the world only as black and white, good and evil, rich and poor. But that’s not the way the world works.

Is it greedy, to offer the customers cheaper products? Is it greedy to resist the competition, when customers are going over to them? Is it greedy to ensure the survival of one’s company (which has a workforce as well)?

The truth is: if a company makes the decision to automate under the pressure of the market, it is actually saving jobs. However, not the ones inside the warehouse, because these are lost either way, but those attached to other tasks within the company.

The explanation for this is almost too simple. If a business is suffering from high costs, it has to offer its products and services at a higher price, to cover these costs. If the customers are unwilling to pay these prices, they go elsewhere and the company loses money, until it’s insolvent and gets broken up. This doesn’t just put the jobs of the warehouse staff in jeopardy, but of all employees in the company.

automatisches-lagerhausBut when a business is able to recognize the market’s signals and reduces its costs – for instance through an automatic distribution centre – it can escape this fate. So, in essence, a small number of jobs in the warehouse need to be sacrificed in order to make the other peoples’ jobs more secure. Is this fair?

Clearly, it’s not. But it would be even less fair to drag the rest of the company into insolvency, just to preserve the warehouse jobs for a little bit longer. It’s therefore rational to automate in good time. Whether this is done in a just way, is the responsibility of the managers in charge.

Planning personnel for the long term

Companies are well advised to plan their personnel requirements for the long run. This helps to cushion some of the extreme fluctuation that might arise from automating the warehouse. It is still the case though that most tasks in distribution centres are done by low-skilled workers. That’s just a result of the kind of work that needs to be done there.

But that certainly doesn’t mean that these people wouldn’t qualify for other tasks within the company. A man called Joe Girard for instance, a school drop-out without professional education, was underestimated for quite a while. But that didn’t stop him from selling more than 13,000 cars over the course of 15 years and becoming the best car salesman of all times. Maybe you’ve got someone like him among your staff without even knowing.

I daresay that many of those people employed in warehouses could upgrade their skills, if they would get notified and motivated early enough. If then comes the time when jobs in the warehouse (need to) get cut, it is possible to move people who know the company and have already proven their motivation and their commitment to its goals, to new assignments.

It is never the objective of automation, to get rid of reliable and committed employees. But automation is necessary to save the company’s future and prevent it from being displaced by the competition. If automation makes economic sense, holding it off would only move the organization in the wrong direction.

Making intralogistics providers responsible for the loss of jobs in distribution centres misses the heart of the matter completely. We, as those people working in this industry, are thus hoping for a more thorough understanding of causal economic relationships in our society, so that we don’t have to deal with such accusations anymore.

In the second part of this series, we are looking into the assertion that we would speed-up global warming.

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