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It’s the end of the week. Yes. And I’m really happy to have you sitting next to me, Stefan. Thank you. I’m not even sure what inspired this, but something in your head. I mean, I know you’re dealing with a lot of companies who are looking at some large scale automation projects. And I don’t know, you just started chatting about thinking about… We spend too much time thinking about the before automation. Why How are we going to design it? The implementation? And then you brought up with us this idea of, well, let’s think about what happens after. And in particular, the impact on a labor force that undergoes a massive automation project or transformation of their operations.
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The so-called human capital.
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Human capital, which every annual report, the letter from every president of every publicly traded company, what is their number one asset? The human. Absolutely. So how are humans affected when they now find themselves working in an automated environment?
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Well, I think they got to be brought in the project as soon as possible. I think they’re part of the project. And that’s why… I think that’s the reason why we’re not using robots so much anymore. The term we’re using cobot? Because they work together.
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It’s a collaboration.
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Absolutely. So it’s a teamwork. It’s a team effort. Well, we know the end result. But if you look at it in a broader, in a bigger picture, it’s a team effort. It’s a company effort. It’s going to change. It’s going to change who you are, the way you do things, how you’re going to grow, everything within the company. So forget about the automation by itself. It’s going to touch every single human in your company.
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When implementing automation, it’s a massive change management project, and it’s something that without good open communication, can inspire enormous fear and anxiety on the part of a workforce. Yes. Because, and that’s where your cobot comment is so interesting, you will send people into fear that automation means removing of a workforce, which really isn’t true. Well, it’s true.
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Yes. But at the same time, it creates opportunity for others. So others that are in that human force that you have today, because some are going to see it as an opportunity to become a technician, to become an automation expert, to become more of a manager that does multitasking, because it’s not so much about doing in action anymore. It’s about looking at the whole system. So some jobs are just going to change. They’re not going to be there anymore. So you’re going to be able to reskill your people. And some of them are going to see it as a major improvement in their quality.
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Right. So there’s… I guess the first thing I want to say before we go down that road just yet, because what is interesting is, of course, no company is making massive investments investments like this with a zero or negative growth rate projected into the future. So it really isn’t about… Yes, you are justifying these investments on a certain amount of labor savings, certain amount of space savings, and a certain amount of throughput per hour improvement.
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Productivity, yeah.
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But there’s still an enormous workforce that’s left. And then, as you’re just saying, that workforce, the nature of their job changes.
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So whether you keep the same workers or you get new ones, but the skillset needs to change, right? So it’s very different. So your lift truck operators are now going to be co-bots. Operators, and they’re going to be station operators. So they’re going to operate a palletizer, an automatic… Because an automatic palletizer doesn’t run by itself.
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Right.
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I mean, one, yes. Well, I mean, Now, one worker can now operate many palletizer. So here you go. So he’s now a palettizer operator. While before that, he was a palettizer. Right.
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Because there’s a couple of things there. First, the idea that every input into an automated system is perfect, not true. Absolutely not. So there’s a lot of troubleshooting to keep the system moving along. And then there’s just managing. There’s all sorts of exceptions and things to deal with to keep it running. So there’s that. So now, like you just said, I was a reach truck driver, putting pallets away, grabbing pallets and that. Now I’m suddenly, I got a lot of screens I got monitors. And so the nature of my job has just become more sophisticated. Yeah, absolutely. With a higher responsibility over the system’s throughput.
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Well, we, the young guys of distribution, went through the changes of working with paper and moving from paper to computer systems. To computer. And there was a change, and it brought in productivity. It brought in… And has anybody lost their job?
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No. In fact, here’s an interesting statistic, at least both in Canada and United States. Warehouse work as a % of all work across across the economy has grown. Now, part of that’s e-commerce. But then think about that. That e-commerce is enabled by a technology that is also derived from what you just talked about, that transformation. And it’s always the case. These transformations create whole new worlds of opportunity, including for, as we said, those forklift drivers and the folks doing one job now transform into another job.
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Well, the capacity of growing. When you put an automation system in, you always forecast the next seven years, the next 10 years, but hoping you’re going to outgrow those forecasts. You can because now you have a system that supports it, that can work 24/7. Now you They need the people to support that system. And that’s where the human comes into play.
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So it’s not just… So let’s say there’s… What did we just say? We’ve said, look, you got to engage everybody early on so that it reduce anxiety. But also you’re doing that to start orienting them to their new job. Having said that, there is a new injection of a new type of laborer that is coming in or worker, of course, which is a very technical type of worker, right? Who’s doing maintenance, and that maintenance is both on the physical aspects of the electrical, mechanical aspects, and the computer systems that are now required to run these things. Yeah.
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But you’d be surprised how many of the people you have today will be willing to learn. And you know what? The largest all of If you talk to any equipment provider, they’ll tell you, Bring people in when we start doing the proof of concept, and we’ll teach them. We’ll teach them, and you know what? They’ll be interested in moving from a picking position to even the maintenance, which they never thought of before. But suddenly it’s a new opportunity to really give themselves skills that also will be transportable in their careers.
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It’s so interesting what you just said because it reminds me back to the moving from paper to paperless. And towards the end of that era of moving to paperless, and I know there are people who are still on paper there, but you guys are real dinosaurs. But at the end of that process, the thing that would be compelling to everybody when they think their workforce can’t adapt to this, I’d be like, have you watched them on their iPhone, on their smartphones? They can do lizard-like things. My daughter, when she was eight, could run my phone better than I could. Probably still today. Definitely still today. But I take your point in the sense that these folks can actually take on these new technical skills that are required, especially bring them in early, and then you invest in retraining.
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I think you have to bring your human resources department in as part of the team in an automation project because they’ll be as involved as operations are because you’re going to need new people. And not only that is that you have to factor it in. We always see we look at the payback and we look at labor against automation, and then But how are you going to get those employees in two years, three years, four years from now is also part of that calculation. And they’re just harder to get. So when you have factor all that in, it changes the projects.
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Interesting. So what is your… I mean, your number one advice to anyone going down this would be engage the workforce early. Absolutely. When you’re dealing with a unionized environment, do you have any additional advice?
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You have to bring them in as well. You have to bring them in as soon as you have a concept, as soon as you have a concept. I won’t say when you start thinking about it, but when you have a concept, something concrete, you start getting numbers. And well, that’s when you have to bring them in because it shows transparency. And And I mean, again, they will see opportunity for the best.
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You’ve got to make that workforce a partner to you in this project. They have to understand, you have to eliminate that anxiety and let them embrace what this next generation of warehousing looks like. Absolutely. A hundred %. I mean, I don’t know. Is there anything else you want to say?
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Hey, enjoy your projects and keep on talking. It’s an open discussion, and you got to bring as many players in the discussion as you can.
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And as soon as it makes sense.
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And as soon as you can.
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The longer you wait, the harder it’s going to get. Absolutely. Which is true of every aspect of an automation project.
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Pretty much. Yes.
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All right. Well, Stefan, thank you for this. This is great.
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Yeah, thanks to you. All right. Okay.
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Have a good weekend. You, too.
