Achieving profitability via automation

Businesses across the board turned to technology last year to keep their operations going amid social distancing requirements and contagion fears. The trend toward automation that was already underway has been accelerated to reduce employee overhead, improve productivity, and increase profitability through digitalization, robotics and artificial intelligence.

Investments in technology that were made during the crisis are already contributing to the post-pandemic productivity boom. The recent rise in wages is also providing the momentum for businesses to invest in automation to offset the growing demands for salary increases.

Raising salaries causes businesses to raise prices and consequently lose sales. Automation is the obvious alternative.

In a recent survey of nearly 300 global companies by the World Economic Forum, 43% of the businesses said they expected to reduce their work forces through new uses of technology.

Some recent and relatively easy to accomplish examples of automation are:

  • Implementing voice recognition algorithms for automated order taking for drive-through restaurants. This can allow for a restaurant that used to require 10 employees a shift to operate with eight or nine.
  • Automated grilling of burgers has been accomplished by a new grill that can grill burgers on both sides with little more than the press of a button. With this and more advanced kitchen equipment, software allows online orders to flow directly to the kitchen to be processed automatically, thus further reducing the need for physical intervention by employees.
  • Self-checkout lanes and electronic shopping carts in super markets is another example of ways to reduce the number of cashiers and other employees in the grocery business.
  • Robots are being utilized to check inventory and patrol aisles for spills by large food retailers.
  • Kroger just opened a 375,000-square-foot warehouse with more than 1,000 robots that bag groceries for delivery customers. The company and others are experimenting with delivering groceries by drone.
  • Apple and other retailers have employed iPads for their sales teams to take orders and bill customers individually, thus simplifying the shopping experience, and eliminating the need for other employees and long check-out lines.

So as you can see – from more powerful ovens that speed up processing rotisserie chickens to iPads at tableside, to Amazon’s “everything store – technologies are increasing productivity, lowering costs and increasing profitability. In the process, businesses are eliminating employees.

Kroger customers in Cincinnati can shop for their groceries online that are picked by a robot in a nearby warehouse – not their local supermarket. Gamers at Dave & Buster’s in Dallas who want pretzel dogs can order and pay for them on their phones – no need to flag down a waiter.

What’s the next thing to surprise you when you go shopping? No cashier to check you out, just a machine talking you through the automated scanning and payment process for whatever you bought. You will be interacting with more and more robots and fewer and fewer people for the future.

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Robert Donnelly

Robert M. Donnelly is an author, educator and brand builder for businesses and individuals. His consultancy business is called DoctorBusiness.com. His corporate life was spent in executive positions with IBM, Pfizer and EXXON and then as the CEO for several U.S. subsidiaries of foreign multinational firms. Professor Donnelly is on the faculty of Saint Peters University as well as Rushmore University, a global online university. His latest book is Personal Brand Planning for Life, available on Amazon. He also functions as an interim executive. You can contact him at rmdonnelly@aol.com or visit his website at DoctorBusiness.com.

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