Reports on the impact automation will have on jobs have proliferated in recent years, as have stories on big causes of lost worker productivity and studies of potential productivity solutions, like working from home.

But predictive reports pale in comparison to the real thing. And the real thing is here.

It takes the form of near science-fiction, a seven football field-sized warehouse in Shanghai, one of the most automated in the world, owned by Chinese e-commerce giant, JD.com.

The warehouses' tenants include 200,000 packages a day shipped across China, hundreds of robots--and only four human beings. As The Washington Post reported, analysts believe it's a glimpse of the future of labor around the world, places where a very few attend to complex machines. And offer, as in this case, 24 hours from click to delivery with nary a human in sight.

See for yourself--watch for the motorized squares nicknamed "little red men", inspired by the feisty creatures in Minions films. And it's coming to the US.

Through an astounding strategic partnership between Google and JD.com announced this summer, Google will invest over half a billion dollars into the venture. Google's Chief Business Officer Philipp Schindler said this about the groundbreaking partnership:

"We're excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalized and frictionless shopping experiences that give consumers the power to shop wherever and however they want."

In other words, automation nets an even faster, smoother delivery experience after the consumer clicks and tackles complexity to enable more personalized shopping experiences--all of which Google wants a part of. 

As I pondered buying my next Swiffer Wet-Jet in Jetson's style, it got me thinking about the pro's and cons of automating entire warehouses.

Solving Labor Issues

It's hard to argue with the revolution in labor costs this will bring. Chief Executive Officer of JD.com, Richard Liu, dreams of having his company 100 percent automated someday, with zero human labor. 

While that may sound like a general pipe dream, this goal isn't: Liu specifically wants to reduce 160,000 workers in Asia down to 8,000 over the next decade, a stunning 95 percent decrease in employees.

I don't know of a lot of other options for companies to reduce labor costs in such a dramatic way.  

Along with that, Liu says the jobs that remain will be better paid with shorter shifts required. In line with this, McKinsey has predicted that even with robots potentially replacing as much as one-third of the American workforce by 2030, a new crop of highly skilled, highly paid, more exciting jobs will emerge.  

Still, though, the math isn't adding up for me. The Shanghai warehouse has a ratio of several hundred robots to four humans. Will that many "replacement" jobs really be created with that kind of disparity possible? I'm not so sure.

Heavily automated warehouses can also solve labor shortage crises. In China, the one-child policy (that ended in 2016) has produced a shortage of available talent for Chinese companies. Automation has stepped in. For almost any economy experiencing labor shortages for whatever reason, automation can play a role in the solution.

Extensive Training Required

As with all astonishing technology, this super-warehouse has its limits. Amazon has plenty of warehouses with robots, of course, each of which handles a much broader array of goods than JD.com. The Shanghai warehouse mostly handles square shaped electronics like cell phones and cameras. 

Only time will tell if the technology advances to accommodate a much broader array of inventory. As for the humans that remain working in such high-tech warehouses, they must be trained. Often.

For example, the workers at the Shanghai warehouse have to complete a new training course every two months because the technology evolves that quickly.

Whatever view you take on this, one thing is for sure. Google continues to make bold moves to better compete and provide better consumer experiences. 

They're like a machine in that way.

Published on: Sep 25, 2018
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