Tech Provides Small Productivity Boosts with Big Effects - Modern Distribution Management

Tech Provides Small Productivity Boosts with Big Effects

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How much of a productivity boost should a technology offer before you consider investing in it? Four percent? Ten percent? If history is any measure, you may want to set your sights a little lower. Tech can be expensive to implement, but even small boosts to productivity can have a broad impact on your bottom line.

The steam engine, for example, is often highlighted as one of the great innovations of the industrial revolution. But, according to a recent report from the McKinsey Global Institute, it only boosted productivity 0.3 percent between 1850 and 1910.

Compare that to the estimated impact of automation: McKinsey estimates automation will boost productivity between 0.8 percent and 1.4 percent by 2065. "Adoption of robotics, artificial intelligence and machine learning could give a bounce to the global economy, at a time of lackluster productivity growth and aging in many countries," the report notes.

Automation isn't just about replacing human workers with machines. Automation and robotics can help augment human capabilities and create new jobs. Workers at a shipyard in South Korea started testing powered exoskeletons (robotic suits) in 2013 to allow them to lift larger objects – and also to make the lifting motion more uniform, efficient and safer.

A 2011 study by McKinsey’s Paris office found that the internet "destroyed 500,000 jobs in France in the previous 15 years," but it also created 1.2 million others.

Although McKinsey estimates that about 60 percent of all occupations have at least 30 percent of their work that can currently be automated, don't expect an overnight shift for every position. We're still in the early stages of the steam engine, when many of the applications are still costly and fraught with technical issues. But we're already seeing adoption in the supply chain.

Lawson Products is using automation to improve logistics management. Carrier last fall announced that it would be investing millions in automation applications in its Indiana factory.

The first step in effective adoption is evaluating your current operations to see where technology implementations may make sense. Invest time and resources in understanding which tasks can be done without specialized skill or knowledge and see if tools already exist to help get you there.

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