Leaders from companies that supply all manner of products gathered in Philadelphia last week to sift through the lessons of the chaos plaguing the global supply chain. At the heart of many proposed solutions: robots and other forms of automation.
In the exhibition area, robot manufacturers displayed their latest models and offered them to warehouse workers as efficiency-enhancing additions. Driverless trucks and drones ruled the show floor, heralding an unfolding era in which machines will play a central role in bringing products to our homes.
Companies presented their technology as a way to save money on employees and streamline scheduling while reducing resistance to a future centered on evolving forms of automation.
“It’s hard to motivate people to do this work,” said Kary Zate, senior director of marketing communications at Locus Robotics, a leading manufacturer of autonomous mobile robots — carts that roll through warehouses and escort people to select goods from shelves . “People don’t want to do these jobs.”
More than two years into the pandemic, ongoing economic shocks have exacerbated traditional conflicts between employers and workers around the world. Higher prices for energy, food and other commodities – partly the result of ongoing supply chain entanglements – have prompted workers to demand higher wages, along with the right to continue working from home. Employers cite increased costs for parts, raw materials and transport to keep up pay, prompting a wave of strikes in countries like the UK.
The stakes are particularly high for companies involved in the transport of goods. Their executives claim that the Great Supply Chain Disruption is largely due to labor shortages. Ports are congested and retail store shelves are running low because the supply chain is running out of people willing to drive trucks and move goods through warehouses, the argument goes.
Some labor experts question such claims while reframing labor shortages as employers’ unwillingness to pay enough to recruit the required number of people.
“This scarcity narrative is industry lobbying rhetoric,” said Steve Viscelli, an economic sociologist at the University of Pennsylvania and author of “The Big Rig: Trucking and the Decline of the American Dream.” “There is no shortage of truck drivers. Those are just really bad jobs.”
A day at the Home Delivery World show at the Pennsylvania Convention Center showed how supply chain companies are embracing automation and flexible staffing as an antidote to rising wages. They are eager to embrace robots as an alternative to human workers. Robots never get sick, even in a pandemic. They never stay at home to take care of their children.
A large truck painted purple and white occupied a prime spot in the showroom. It was a driverless delivery vehicle from Gatik, a Silicon Valley company that operates 30 of them between distribution centers and Walmart stores in Texas, Louisiana and Arkansas.
Here was the solution to trucking companies’ difficulties in attracting and retaining drivers, said Richard Steiner, Gatik’s head of policy and communications.
“The profession isn’t as attractive as it used to be,” he said. “We can offer a solution to this problem.”
Nearby, an Israeli start-up, SafeMode, has touted a means of curbing the notoriously high sales plaguing the trucking industry. The company has developed an app that monitors drivers’ actions – their speed, hard braking, fuel efficiency – while rewarding those who outperform their peers.
The company’s founder and CEO, Ido Levy, showed data collected by a driver in Houston the previous day. The driver’s steady hand at the wheel had earned him an additional $8 — a cash bonus on top of the $250 he normally makes in a day.
“We really convey a sense of accomplishment every day,” says Mr. Levy, 31. “It really encourages loyalty. We try to make them feel like they are part of something.”
Mr. Levy co-founded the company with a professor at the MIT Media Lab who leveraged research on behavioral psychology and gamification (using game elements to encourage participation).
To date, the SafeMode system has delivered 4 percent savings in fuel while increasing storage by a quarter, Mr. Levy said.
Another company, V-Track, based in Charlotte, NC, also uses technology similar to SafeMode to discourage truck drivers from changing jobs. The company places cameras in truck cabs to monitor drivers and alert them if they’re looking at their phones, speeding or not wearing their seat belts.
Sept. 6, 2022 2:27 PM ET
Jim Becker, the company’s product manager, said many drivers have come to appreciate the cameras to protect themselves from false accusations of wrongdoing.
But how does it affect customer loyalty when drivers get angry about surveillance?
“Frustrations with increased surveillance, particularly around in-cab cameras,” are a significant source of driver complaints, said Max Farrell, co-founder and chief executive officer of WorkHound, which collects real-time feedback.
Several companies on the show floor targeted trucking companies that were struggling to hire staff for their shipping centers. Their solution was to move such functions to countries with lower wages.
Lean Solutions, based in Fort Lauderdale, Fla., is establishing call centers in Colombia and Guatemala in response to “the labor challenge in the US,” said Hunter Bell, a sales representative for the company.
A Kentucky startup, NS Talent Solutions, is setting up mail order operations in Mexico, saving up to 40 percent compared to the United States.
“The pandemic has helped,” said sales manager Michael Bartlett. “The world is now comfortable with remote workers.”
Numerous companies have advertised services that hire and screen part-time and temporary workers, offering companies a way to top up as needed without committing to full-time employees.
Pruuvn, an Atlanta startup, is selling a service that allows companies to eliminate employees who conduct background checks and recruit.
“It allows you to get rid of or replace several people,” the company’s chief executive officer, Bryan Hobbs, said during a presentation.
Another staffing company, Dallas-based Veryable, provided a platform to bring together workers, such as retirees and students, who are looking for temporary, part-time employment with supply chain companies.
Jonathan Katz, the company’s manager of regional partnerships for the Southeast, described temping as the way forward for smaller warehouses and distribution operations that lack the money to install robots to improve their ability to adapt to fluctuations in demand.
One drone company, Zipline, shared video of its equipment taking off behind a Walmart in Pea Ridge, Ark., dropping items like mayonnaise and even a birthday cake into the backyards of customers’ homes. Another company, DroneUp, said it would roll out similar services in 30 Walmart stores in Arkansas, Texas and Florida by the end of the year.
But the largest companies are most focused on the use of robots.
The manufacturer Locus has already equipped 200 department stores worldwide with its robots and recently expanded to Europe and Australia.
Locus says its machines aren’t designed to replace workers, but to complement them — a way to get more productivity out of the same warehouse by freeing people from the need to push the carts.
But the company also presents its robots as a solution to the labor shortage. Unlike workers, robots can easily grow and shrink, eliminating the need to hire and train temporary workers, said Melissa Valentine, director of global retail accounts at Locus, during a panel discussion.
Locus even rents out its robots, so customers can add and remove them as needed. Locus takes care of the maintenance.
Robots can “solve labor problems,” said Nathan Ray, director of distribution center operations at Albertsons, the grocery chain that previously held executive positions at Amazon and Target. “You will find a solution that fits your budget. There are just so many options out there.”
As Mr. Ray acknowledged, a key obstacle to more rapid deployment of automation is workers’ fears that robots pose a threat to their jobs. Once they realize that the robots aren’t there to replace them, just do physically demanding tasks like pushing carts for them, “it gets really fun,” Mr. Ray said. “They realize it’s kind of cool.”
Workers even give robots cute nicknames, he added.
But another panelist, Bruce Dzinski, transportation director at Party City, a chain of party supply stores, pitched robots as an alternative to higher wages.
“You couldn’t get workers, so you raised your wages to try and get people,” he said. “And then everyone else raised wages.”
Robots never ask for a raise.