The people who run companies that supply all kinds of products gathered in Philadelphia last week to see through the lessons of the chaos that besieged the global supply chain. Central to many proposed solutions: robots and other forms of automation.
Robot manufacturers demonstrated their latest models on the showroom floor and offered them as efficiency-enhancing additions to warehouse workers. Self-driving trucks and drones commanded the display space, advertising an unfolding era where machines will take center stage in bringing products to our homes.
The companies envisioned their technology as a way to save money on employees and optimize scheduling, while removing resistance to a future focused on evolving forms of automation.
“It’s hard to get people motivated to do this work,” said Kary Zate, senior director of marketing communications at Locus Robotics, a leading manufacturer of autonomous mobile robots — carts that roll through warehouses and accompany people selecting goods from the shelves. “People don’t want to do those jobs.”
More than two years after the pandemic, ongoing economic shocks have exacerbated traditional conflicts between employers and workers around the world. Higher prices for energy, food and other goods – partly due to ongoing confusion in the supply chain – have pushed workers to demand higher wages, along with the right to continue working from home. Employers cite high costs for parts, raw materials and transportation in holding on to paychecks, sparking a spate of strikes in countries like Britain.
The stakes are especially high for companies that transport goods. Their executives argue that the Great Supply Chain Disruption is largely the result of labor shortages. Ports are overwhelmed and store shelves are short of goods because the supply chain has run out of people willing to drive trucks and move goods through warehouses, the argument goes.
Some labor experts dispute such claims, reformulating the labor shortage as an unwillingness on the part of employers to pay enough to attract the required number of people.
“This deficit story is rhetoric about industry lobbying,” said Steve Viscelli, an economic sociologist at the University of Pennsylvania and author of “The Big Rig: Trucking and the Decline of the American Dream.” “There is no shortage of truck drivers. These are just really bad jobs.”
A day spent wandering the Home Delivery World trade show at the Pennsylvania Convention Center revealed how companies in the supply chain are pursuing automation and flexible workforces as an antidote to rising wages. They are eager to embrace robots as an alternative to human workers. Robots never get sick, even during a pandemic. They never stay at home to take care of their children.
A large truck, painted purple and white, took pride of place on the showroom floor. It was a driverless van produced by Gatik, a Silicon Valley company that operates 30 between distribution centers and Walmart stores in Texas, Louisiana and Arkansas.
This solved the truck companies’ difficulties in attracting and retaining drivers, said Richard Steiner, head of policy and communications at Gatik.
“It’s not as attractive a profession as it once was,” he said. “We can offer a solution for that problem.”
Nearby, an Israeli start-up company, SafeMode, praised a means of curbing the notoriously high turnover plaguing the trucking industry. The company has developed an app that tracks drivers’ actions – their speed, the abruptness of their brakes, their fuel consumption – while rewarding those who outperform their peers.
The company’s founder and chief executive, Ido Levy, showed data captured the previous day from a driver in Houston. The driver’s steady hand at the wheel had earned him an extra $8 – a cash bonus on top of the $250 he normally earns in a day.
“We really convey a sense of success every day,” said Mr. Levy, 31. “That’s a huge boost to retention. We try to make them feel like they belong.”
Levy conceived the company with a professor at the MIT Media Lab who was researching behavioral psychology and gamification (the use of game elements to encourage participation).
So far, the SafeMode system has delivered a 4 percent savings on fuel, while increasing retention by a quarter, Mr Levy said.
Another company, V-Track, based in Charlotte, NC, is also using technology similar to SafeMode’s in an effort to deter truck drivers from changing jobs. The company places cameras in truck cabs to monitor drivers and alerts them when they’re looking at their phones, speeding or not wearing their seat belts.
September 9, 2022, 4:10 PM ET
Jim Becker, the company’s product manager, said many drivers have come to appreciate the cameras as a means of protecting themselves from unwarranted crime charges.
But what is the impact on retention if drivers are annoyed by supervision?
“Frustrations over increased surveillance, especially around in-cab cameras,” are a major source of driver lament, said Max Farrell, co-founder and chief executive of WorkHound, which collects real-time feedback.
Several companies on the show floor catered to transportation companies that were experiencing difficulties in hiring people to staff their shipping centers. Their solution was to move such positions to countries where wages are lower.
Lean Solutions, based in Fort Lauderdale, Florida, is setting up call centers in Colombia and Guatemala — an answer to “the labor challenge in the US,” said Hunter Bell, a sales agent for the company.
A Kentucky start-up, NS Talent Solutions, is setting up freight forwarding operations in Mexico, saving up to 40 percent compared to the United States.
“The pandemic has helped,” said Michael Bartlett, sales director. “The world is now comfortable with remote personnel.”
Numerous companies promoted services that recruit and vet part-time and temporary workers, giving companies the ability to ramp up as needed without committing to full-time employees.
Pruuvn, an Atlanta-based startup, sells a service that allows companies to eliminate employees who hire and conduct background checks.
“It allows you to fire or replace multiple individuals,” the company’s CEO Bryan Hobbs said during a presentation.
Another staffing agency, Dallas-based Veryable, provided a platform to match workers such as retirees and college students seeking part-time, temporary stints with supply chain companies.
Jonathan Katz, the company’s regional partnership manager for the Southeast, described temporary staffing as the way for smaller warehouses and distribution operations that don’t have the money to install robots to increase their ability to adapt to fluctuations in demand.
A drone company, Zipline, showed a video of its equipment taking off behind a Walmart in Pea Ridge, Ark., dropping items like mayonnaise and even a birthday cake into the backyards of customers’ homes. Another company, DroneUp, announced plans to roll out similar services at 30 Walmart stores in Arkansas, Texas and Florida by the end of the year.
But the largest companies are most focused on deploying robots.
Locus, the manufacturer, has already equipped 200 warehouses worldwide with its robots and has recently expanded to Europe and Australia.
Locus says its machines aren’t meant to replace workers, but to supplement them — a way to squeeze more productivity out of the same warehouse by relieving people of the need to push the carts.
But the company also presents its robots as the solution to staff shortages. Unlike employees, robots can be easily scaled up and down, eliminating the need to hire and train temporary workers, Melissa Valentine, director of global retail accounts at Locus, said during a panel discussion.
Locus even rents out its robots so customers can add and remove them as needed. Locus takes care of the maintenance.
Robots can “solve labor problems,” said Nathan Ray, director of distribution center operations at Albertsons, the supermarket chain, who previously held executive positions at Amazon and Target. “You can find a solution that fits your budget. There are just so many options.”
like mr. Ray acknowledged, a major barrier to speeding up automation implementation is employee fear that robots are a threat to their jobs. Once they realize the robots aren’t there to replace them, but just to relieve them of physically taxing tasks like pushing carts, “it gets really fun,” Mr. Ray said. “They realize it’s pretty cool.”
Workers even give robots cute nicknames, he added.
But another panelist, Bruce Dzinski, director of transportation at Party City, a party supply store chain, presented robots as an alternative for higher wages.
“You couldn’t get a job, so you increased your pay to get people,” he said. “And then everyone raised wages.”
Robots never ask for a raise.