Materials Handling Automation - Is it destroying job opportunities?
Although a valid concern for many, and a question you often hear asked when you say that you work for a Robotics company, unfortunately the myth is built on a lack of understanding of what the alternatives are.
Before answering the question it is important to understanding the environment that leads to a company investing in automation and robotics.
Competitive Advantage
Competitive advantage can be gained in several ways. Innovation is one, another is taking market share by driving down costs and consequently undercutting competitor’s prices. And in a competitive consumer based society, you don’t hear many people complaining when they have to pay less.
However, for most businesses across all sectors of manufacturing, competitive advantage is more often focussed around maintaining market share, fending off the competition, and retaining a ‘loyal’ customer base.
By nature, as a society we continually innovate. The last 100 years has seen innovation increase exponentially – and in manufacturing that equates to product design: functionality, aesthetics, quality … and price.
When you are involved in retail, and most products are directly or indirectly connected through to the consumer at some point, it only takes one to drive innovation, forcing everyone else to follow.
When a competitive product drops in price, the choice is to either meet their price, offer more benefits and features, or both. Staying still is no choice.
Product loyalty is also no longer something that brands can rely on. Consumers are driven by many variables with price being a key one.
If price is key to remaining competitive, then we must look at the factors enabling price to be driven down, which is key to this discussion.
Price is based on
Raw Materials * Manufacturing Costs * Distribution * Retail Margin
Larger volumes and higher market share enables better prices to be negotiated for raw materials, lower manufacturing costs achieved due to longer runs, further investment in automation and robotics further driving costs down, lower costs to markets, and lower prices at retail due to volume and competition. The result – the consumer changes their purchasing behaviour, pays less, and the competitors go into a spin.
Global manufacturing also enables companies to build manufacturing plants in lower cost locations where labour is also cheaper and more willing to undertake repetitive work practices, and improved tax benefits can also be gained. Transportation to foreign markets is a small cost in comparison.
Therefore the choices facing Australian Manufacturers if they wish to remain competitive is to either automate or relocate. Alternatively the option is to close down or sell out to global companies.
Added to this in western societies, staff are less willing to be involved in repetitive, mundane processes 8 hours a day 5 or 6 days a week. OH&S issues are paramount, assuming that staff is willing to turn up regularly.
Therefore the question is not about whether Materials Handling Systems put people out of work, but rather one of how Materials Handling Systems enable manufacturing companies to survive in locations like Australia.
Machinery Automation & Robotics
1/101 Derby Street
Silverwater NSW 2128
Phone: (61) 2 9748 7001
http://www.machineryautomation.com.au