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Why we should welcome automation in the logistics industry

Logistics and automation have gone hand in hand since the beginning of the first industrial revolution; from the steam engine, the forklift and now robotic pickers and packers. Drone delivery, automated self-driving trucks and fully automated AI controlled warehousing are all already in the prototype stage and will most likely become common place in the next 10 years.

There are more products being produced for more people than ever before. There is increased demand from the retail sector and the explosion of e-commerce which in the United States alone has shown an average annual growth of 15 percent over the last decade is placing an immense strain on the logistics industry making it one of the fastest growing sectors and resulting in a severe shortage of skilled labour and management worldwide. This problem is even greater in developing economies where there is accelerated industrial expansion and limited opportunities for skills development.

The Problem

The shear growth in volume of products that need to be moved and managed has resulted in the demand for skilled supply chain talent to be at an all-time high. The challenge is that the number of people earning relevant degrees and certifications are not enough to meet this demand. There are a number of reasons for this:

  • Demographics – there is a trend particularly in developed countries where skilled baby boomers are retiring but the “Millennial” generation which are currently entering the workforce are not yet skilled enough to fill many of the middle management positions that are going vacant.
  • Changing Skill set – The increased importance of technology means that even relatively low-level skilled employees such as forklift drivers need to have more technical and analytical skills. Similarly, as logistics managers are taking on more strategic roles on their companies there is a greater need for them to develop more “soft skills” including project management, leadership, communications, and relationship management capabilities.
  • Cost Cutting Measures – The recent economic downturn has resulted in many companies cutting back or eliminating their skills development programmes.
  • Lack of training programs – In developing countries, there are not enough colleges, universities and other institutions offering courses in logistics and supply chain management.

Furthermore, a more demanding consumer who expects shorter delivery times and more complex requirements such as customisation and omnichannel distribution networks is forcing logistics companies to look for faster more efficient methods of managing their operations.

The advantages of automation

The biggest and most obvious advantage of automation is increased productivity. Machines don’t need to sleep or eat and can work 24/7. While they do occasionally break, if properly maintained they will give you a much higher production rate than their human counterpart.

Machines can also work much faster than we can, and they can do things we can’t, drones can fly, and they can be designed to fit into spaces humans will not

A robot will repeat the same task over and over with the same level of accuracy, they do not get bored or need motivation and do not suffer from “human error”. They can also compute faster than the average human, do not forget and have capacity to store and access a lot more information than the average human. A computer for example with be able to track the position of every item in a warehouse and instantly retrieve it from storage.

Finally, automation can be cost effective, apart from the increased productivity and eliminating all the inherently human costs such as salaries etc. They can result in other savings such as reduced warehouse sizes, less shrinkage and they are easily scalable to accommodate an increase or drop in demand.

Are there drawbacks?

A few. automation usually requires a large upfront investment. This can be very costly and even disastrous if demand suddenly reduces or technology changes and your automation machines become obsolete.

AI is still a long way from being able to create an intuitive machine. We will still need humans to make judgment calls when not all the variables can be captured as data.

Machines cannot adapt to new situations. Most machines are designed to do one or at the most a few limited tasks while the same human could perform numerous tasks depending on where they are most needed.

Be prepared

While it is predicted that in the transport, storage and manufacturing industries by 2037, 50% of jobs will be automated, there will simultaneously be an increase in demand for people who can build, programme and maintain robotic workers.

The challenge will be upskilling the current workforce to work side by side with robotic machines. Companies are aware of this but as this technology is all relatively new there is uncertainty as to exactly what training to provide.

Governments need to promote and support the development of accessible skills training for both those in the existing workforce whose jobs are currently under threat and those looking to enter the field of logistics.

Finally learning institutions need to insure they are providing relevant education so that those completing their studies are equipped to deal with an industry that is increasingly automated.

The IMM has numerous opportunities for those looking to upskill themselves. We have short courses in Logistics, Transport and Export Administration. You can now also specialise in Supply Chain Management when doing our BCom in Marketing and Management. To find out more visit https://imm.ac.za/