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What is automation and is it replacing workers?

10/17/2022

What is automation and is it replacing workers?

Automation is a reality in nearly every field, and it's particularly prominent in the logistics and warehousing industries. As technology evolves, business leaders in this sector increasingly utilize smart applications and machines to streamline processes, enhance productivity and decrease overhead costs associated with employees and manual labor. In fact, Procurement Tactics reports that the global logistics automation market is growing at an annual compounded rate of almost 12.5%.

Despite a massive labor shortage and skills gap, many stakeholders — workers and employers alike — have voiced concerns about automation "replacing" people in warehouses, ports and on the road. While it's true that technological advancements have lessened the need for employees, right now, machines can't supplant people entirely (and most likely, never will). This article will examine what automation is, which technologies logistics and warehousing companies are employing and the possible implications for their human counterparts.

Automation explained

As Zhenhub explains, automation refers to digitization that's used to make manufacturing, inventory and distribution more effective and efficient. It consists of both machines (hardware) and programs (software). It also includes artificial intelligence (AI) and machine learning that help these machines and programs become more intelligent and productive. Digitization helps companies save critical resources, namely time and money.

What technologies are being used?

To explore and understand how automation is implemented, let's look through the lens of hardware and software, respectively:

Automation hardware

We're all familiar with machinery like forklifts, conveyor belts and reach trucks, all of which make moving and storing goods easier. Automation takes this ease and convenience a few steps further. Many companies in the logistics and warehousing spheres operate machines such as robotic arms, drones and automated storage and retrieval systems (AS/RS) to alleviate the burden on employees to do all the heavy lifting — literally.

Automation software

Businesses are turning to intelligent, data-driven applications to reduce the risk of human error and to speed up processes. Programs being developed and used include supply and demand forecasting models, content management systems (CMS), customer relationship management (CRM) software and online shopping (e-commerce) platforms, to name but a few. All of these technologies eliminate much of the need for manual pen and paper calculations, stocktake/inventory and correspondence.

These applications provide managers with accurate, infallible data in real time that allow them to make confident business decisions. They also allow companies to fulfill greater order volumes with no additional labor required. Further, they give all stakeholders greater visibility into and control of every step along the supply chain.

Are people becoming redundant?

The answer is, quite frustratingly, "yes" and "no." While automation is reducing the need for a lot of hand-operated labor, these machines and programs will always need people to run and monitor them. As Forbes reports, machines could replace up to 40% of the world's jobs within 15 to 25 years — but they'll also be generating them. Instead of viewing automation as rendering jobs obsolete, it would be more accurate to see it as creating jobs that require novel and unique skill sets.