Robotics systems are thus becoming an economically viable alternative to human labor in more and more industries. A human welder today earns around $25 per hour (including benefits), while the equivalent operating cost per hour for a robot is around $8 when installation, maintenance, and the operating costs of all hardware, software, and peripherals are amortized over a five-year depreciation period. In 15 years, that gap will widen even more dramatically. The operating cost per hour for a robot doing similar welding tasks could plunge to as little as $2 when improvements in its performance are factored in.
Source: bcg.perspectives – How Robots Will Redefine Competitiveness
Emphasis added by me.
Source: Retailers looking to save on labor costs turn to automation
$15 per hour minimum wage, $4 to 5$ hour in benefits adds up while the costs of automation fall dramatically. The former is a variable cost while automation is mostly a one time fixed cost. Labor intensive service businesses have advanced beyond experiments with automation and are now rolling out various solutions. The “featured image” attached to this article is a pair of self order kiosks in a McDonald’s in St George, Utah (photo by me). Starbucks offers a mobile app that let’s patrons order products in advance for pickup when the customer enters the store. If widely adopted, this could reduce the labor needed to take orders. To the extent these steps free up labor that may then be applied to higher value services, this will be good for all. But in some situations, this may simply free up labor – reducing the number of jobs. Plus, some of the people whose jobs become automated may lack the ability to learn new higher-value skills.
Spotted by me, recently:
As labor and benefits costs rise – and tech costs fall – we will see much more of this.
McDonald’s is adding self order kiosks and mobile order apps – which will reduce the number of staff needed to process orders at the front. See story at Money.CNN.com.
Source: ‘Industry 4.0’ comes to B.C.: Smart machines and Internet of Things change the workplace
IOT changes everything for service and industrial businesses. As described at the link, IOT enables smarter machines/automation. But it also means deploying sensors throughout a “work environment” to monitor and detect safety issues, to identify productivity issues, to detect quality problems, to optimize production and much more.
“You will see completely lights out factories for manufacturing,” said Rowan Trollope, senior vice president and general manager of Cisco Systems’ IoT and Collaboration Technology Group. “You’re going to see manufacturing technologies that are even easier to automate … that are really going to transform manufacturing.”
Source: 8 Internet Of Things And UC Technologies You’ll See In 10 Years – Page: 1 | CRN
This is also somewhat true for the service industry. A combination of automation and self service will reduce labor requirements. Long ago, the ATM machine did indeed reduce the need for bank tellers. Service service check outs at stores (grocery, hardware, department stores) has reduced staff needs. Some restaurants are using apps for self order/data entry by customers, and others are using a combination of self order kiosks and customer self service (Think of filling your own soft drink cup at a fast food restaurant.)
Minimum wage laws, the new requirement in some locales to pre-schedule workers two weeks in advance, and the expense of health insurance will cause a rush to replacing labor with automation. These changes were going to happen eventually but new costs associated with labor will accelerate this change.
To the extent this frees up labor to purse other, higher valued added functions, this can be a net positive with improved economic efficiency. However many will not be in a position to migrate upwards to provide higher value – this will cause disruption and hardship that will lead to government legislation that requires economic inefficiency.
A good example of the latter is Oregon’s law that prohibits individuals from pumping their own gas into their own car. Oregon is the only state in the U.S. that outlaws self service fueling of your own vehicle. This is a “make work” law – and consumers pay for it in the form of higher prices and longer waits for service and refueiling. Yet that is how government responds to this sort of problem. Next: A ban on using apps to self order at restaurants? Who knows.
The key take away is that “additive manufacturing” is moving from the rapid prototyping of parts stage into a new kind of manufacturing.
Source: The Additive Manufacturing/3D World: Vast And Valuable (Part 1) | Seeking Alpha
Ultimately, it means P&G’s signature products, such as Tide detergent and Pampers diapers, will be made in fewer, but larger manufacturing plants, and ones with more robots and automation that reduce personnel.
Source: Procter & Gamble consolidates plants, adds automation
Automation systems such as packaging and labeling systems, medication dispensing system, storage and retrieval systems, table-top counters and compounding systems are employed in order improve the efficacy of regular jobs within pharmacies. The market is expected to grow owing to features including system integration that increases productivity and time to clinicians for patient care, thereby lowering medication errors.
Source: Pharmacy Automation Devices Market Worth $8.99 Billion By 2020
With high tech readily available “off the shelf” and probably from an outsourced cloud service, what is the role of the CIO in 10 or 15 years?
A world where IT is perceived as essential but not strategic is an ugly place to be.
Source: The CIO is becoming the HVAC guy | Computerworld
The author suggests the role of the future CIO is to provide a smorgasbord of IT options from which others can select, and to gracefully manage the end of life and shutdown of legacy systems. Plus, as technology advances, much of it has also been simplified to the point that end users make their own decisions (for better or worse). But think: Once upon a time, we hired a group to develop, say, a manufacturing cost analysis software project. Then users began to develop practically the same thing in Excel using VBA – all by themselves. Today, they just buy something from the cloud.