MMH    Topics     Blogs

Automation: Why we should care about the $15 an hour fast food worker

Rising wages in the services industry could drive materials handling automation


A few years ago, I attended a presentation by a Canadian restaurant chain at a logistics conference. The restaurant operator had built a semi-automated distribution center in Guelph, Ontario. The site was chosen for three reasons: With a number of automotive plants in the area, it had an industrial heritage; there was a solid transportation network; and with 120,000 residents, including a university, there was an apparent pool of available workers.

As things worked out, the company executive’s regret was that his company didn’t implement more automation, especially around case handling and palletizing. The reason: Turnover in the facility was horrendous. Experienced industrial workers preferred working for higher wages in the automotive plants than the relatively low wages in a food distribution center; meanwhile, college students could make nearly the same buck working in the mall as they could in the DC. To illustrate his point, the executive pulled up stats for that shift on his smart phone and learned that he had a 30% absentee rate in the manual case picking area. More automation would have made him less reliant on the local workforce.

I thought about that presentation this weekend reading news reports about fast food workers who are striking McDonald’s and its competitors for a $15 an hour wage. Those same protestors would also like to see WalMart, Target and their mall store competitors pay a living wage to retail clerks.

I have no idea whether the fast food or retail industries will buckle under pressure and raise their wage rates. However, it’s an issue that we in the manufacturing, warehousing and distribution industries should watch. We’re already struggling to staff our facilities, which often have a 50% or more annual turnover even though the pay is better than working at McDonald’s. If I’m a 20-something who can make $15 an hour in the mall, like those the kids in Guelph, I’m going to really think twice about busting my hump picking cases on the second shift.

At the same time, there’s a potential silver lining for materials handling automation: Wage demands could accelerate the adoption of automated solutions, especially the next generation of case and piece picking robots now coming to market that can work next to associates.

That brings me to the second story I was following this week. On the same day fast food workers were striking McDonald’s, the Times reported that Google is making a major investment in robotics. Those robots aren’t going to drive Google cars. Instead, they may very well be adapted to working in retail stock rooms and distribution centers. “A realistic case, according to several specialists, would be automating portions of an existing supply chain that stretches from a factory floor to the companies that ship and deliver goods to a consumer’s doorstep,” the Times reported, adding that the opportunities for robotic automation are massive. “’There are still people who walk around in factories and pick things up in distribution centers and work in the back rooms of grocery stores.’”

In fact, that day is already here, albeit in limited, niche applications. In the December issue of Modern, I wrote about how Genco is using a piece picking robot that works side by side with associates in a package sealing application in its distribution center in Ft. Worth, Texas. This isn’t a science project. Genco has moved from pilot to production. You can watch the robot at work by clicking here.

Now, by all accounts, the robot has limited capabilities at this stage of the game – the payload is about 5 lbs. and it’s a little slow. But in the right application, it works, it’s working and the new process has revealed other ways to take costs out of the process. At $35,000 – Genco’s estimated cost for the robot, tooling and warranty –the robot costs about the same as a $15 an hour associate for one year.

During my interviews with Genco for the December story, Pete Rector, executive VP of technology and lean solutions, said something similar to the experts in the New York Times. The real breakthroughs in robotics will come when we’re able to apply robots that can work side by side with associates in repeatable processes – like case and piece picking. “Think about a robot like Baxter and then you give it Siri,” he said. “You get a robot you can talk to you and it talks back to you. How far is that? It’s closer than you think.”

The $15 an hour fast food worker, if it comes to pass, could create an opportunity for our industry to take automation to the next level – from storage and conveyance to piece picking and handling.


Article Topics

Blogs
Automation
Genco
Google
McDonald's
Robotics
   All topics

Blogs News & Resources

Two voices of reason on pallet materials
60 Seconds with Bob Trebilcock, outgoing executive editor, Modern Materials Handling
Learn from lift truck service history
The reBound Podcast: How Pitney-Bowes is innovating with autonomous vehicles.
Packaging Corner: Be open to change
60 Seconds with Robert Martichenko of American Logistics Aid Network
The reBound Podcast: Looking for talent in all the right places: How Essendant is revolutionizing recruitment
More Blogs

Latest in Materials Handling

ASME Foundation wins grant for technical workforce development
The (Not So) Secret Weapons: How Key Cabinets and Asset Management Lockers Are Changing Supply Chain Operations
MODEX C-Suite Interview with Harold Vanasse: The perfect blend of automation and sustainability
Consultant and industry leader John M. Hill passes on at age 86
Registration open for Pack Expo International 2024
Walmart chooses Swisslog AS/RS and software for third milk processing facility
NetLogistik partners with Vuzix subsidiary Moviynt to offer mobility solutions for warehouses
More Materials Handling

About the Author

Bob Trebilcock's avatar
Bob Trebilcock
Bob Trebilcock is the executive editor for Modern Materials Handling and an editorial advisor to Supply Chain Management Review. He has covered materials handling, technology, logistics, and supply chain topics for nearly 30 years. He is a graduate of Bowling Green State University. He lives in Chicago and can be reached at 603-852-8976.
Follow Modern Materials Handling on FaceBook

Subscribe to Materials Handling Magazine

Subscribe today!
Not a subscriber? Sign up today!
Subscribe today. It's FREE.
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today.

Latest Resources

Materials Handling Robotics: The new world of heterogeneous robotic integration
In this Special Digital Edition, the editorial staff of Modern curates the best robotics coverage over the past year to help track the evolution of this piping hot market.
Case study: Optimizing warehouse space, performance and sustainability
Optimize Parcel Packing to Reduce Costs
More resources

Latest Resources

2023 Automation Study: Usage & Implementation of Warehouse/DC Automation Solutions
2023 Automation Study: Usage & Implementation of Warehouse/DC Automation Solutions
This research was conducted by Peerless Research Group on behalf of Modern Materials Handling to assess usage and purchase intentions forautomation systems...
How Your Storage Practices Can Affect Your Pest Control Program
How Your Storage Practices Can Affect Your Pest Control Program
Discover how your storage practices could be affecting your pest control program and how to prevent pest infestations in your business. Join...

Warehousing Outlook 2023
Warehousing Outlook 2023
2023 is here, and so are new warehousing trends.
Extend the Life of Brownfield Warehouses
Extend the Life of Brownfield Warehouses
Today’s robotic and data-driven automation systems can minimize disruptions and improve the life and productivity of warehouse operations.
Power Supply in Overhead Cranes: Energy Chains vs. Festoons
Power Supply in Overhead Cranes: Energy Chains vs. Festoons
Download this white paper to learn more about how both systems compare.