Brent Barcey, executive director of global sales with Fanuc, discusses the trends that are driving change in supply-chain management, including the skills gap and efforts to boost warehouse productivity.

SCB: What are the big trends in supply-chain management that are driving change today?

Barcey: Right now, the trend is that 80% of warehousing and e-commerce logistics sites don't have any sort of automation at all. You've got a lot of people who are kicking the tires on how to get started, looking for low-hanging fruit —palletizers and other simple things of that nature.

SCB: That's amazing to hear, given all the attention that’s being paid to automation. What’s stopping companies from pulling the trigger on the necessary investments?

Barcey: They're not quite certain how to figure the ROI. They're looking at things from a financial perspective. You have 300 people on a shift and only 240 show up — that's a problem. What are you missing in throughput and quality? People are looking at the ROI differently, when it comes to putting this technology into their plants and manufacturing facilities.

SCB: How is the skills gap in warehousing, logistics, and distribution driving change, and how is it being addressed by technology?

Barcey: It's huge. Most of these companies are running three shifts, and 15% don't show up every shift. How do you plan for that? We’re working with about a thousand CERT schools that are training the next generation of workers. There are a lot of technical programs for high schoolers now as well. At the college level, instead of a four-year degree, people are toying with the idea of getting a technical degree, so they can come on to a job at 19 with full benefits.

SCB: What new and different qualities do those workers need to possess?

Barcey: Most of the younger people working today grew up with an iPad or iPhone in their hands. The industry has to change from a gamification standpoint. We need to tell people that there’s an easier and softer way of working in this business.

SCB: When unemployment was at 3%, that made it hard, didn’t it?

Barcey: It did make it tough, but you can take somebody and give them the opportunity to better themselves, and now they're working with robots as opposed to schlepping boxes back and forth. With automation and robots, jobs aren’t being lost. They’re moving people to somewhere else in the plant, where they're using their brains instead of their backs. Humans and robots are co-existing more than ever before.

SCB: Collaborative robots, or cobots, require the presence of a human being.

Barcey: Absolutely. The collaborative technology has taken off as well. But even with non-collaborative applications, 10 people that were replaced by two robots are being put elsewhere. They're not losing their jobs. Human resources are very valuable right now.

SCB: On the human side, what are companies doing to increase productivity in a meaningful way?

Barcey: At the end of the day, it’s about throughput. If you're not making your orders, if you have 50 trailers a day that are supposed to go to your end user and you're only hitting 45 of them, that's five trailers a day. So management needs to get engaged with the people on the floor who are working with robots. Humans have to interface with them with regard to programming and maintenance. So it's really changed the way warehouses are working.

SCB: What are some other popular applications of technology that are driving these improvements?

Barcey: The vision and software companies. They're the ones that are changing the game about how things are going to be done in the future.

SCB: Where do you see all this is going? The companies that are sitting on the fence about making the ROI decision are going to have to jump over it at some point, aren’t they?

Barcey: It's an arms race. If you're not doing it, your competitors are, but you have to be smart about it. You have to dip your toe in the water. I wouldn't do a cannonball for the first application. I would do something simple to get the people acclimated on the floor and on the management side, see how much throughput you can get from one little application. Then eyes start opening, and ideas start coming from your people on the floor. For the warehouse and e-commerce business, it’s like 1982 in the automotive industry. So we're excited.