It’s all about labor

Last week, I wrote a column on the prospects for materials handling automation over the next four or five years.

In part, I believe our opportunities lie in labor-related issues. Wages in China and other emerging economies are rising, which makes moving manufacturing back to the United States more attractive if other costs make sense. At the same time, American manufacturers and distributors are grappling with their own set of labor issues, including the silver tsunami, a shortage of skilled labor for manufacturing and a shortage of labor willing to work in a distribution center.

Then, there’s the cost of labor. This was driven home to me by a conversation I had last week with two systems engineers from a leading 3PL. They contacted me in response to a column I’d written about lift truck manufacturers getting into the AGV business. They had a lot of very detailed questions about which lift truck manufacturers were offering hybrid trucks and what kind of processes and applications they were targeting in distribution centers.

As it turns out, these guys weren’t just picking my brain. One of their customers was willing to fund a pilot study on the feasibility of using lift truck/AGVs in a distribution environment.

But AGVs are just the starting point. The customer, as it turns out, has recently completed labor negotiations with its unions and has asked the 3PL to review all of its distribution processes and look for areas where there is an economic justification to apply automation.

Based on things I heard at MHIA two weeks ago, I think variations of these conversations are going on at companies across North America. How and whether we can tap into them will say a lot about how our industry grows in the future.