Mar 16, 2018

The Cost of NOT

If I had a dollar for every conversation I’ve had, in the last 18 months, that revolved around ROI on capital investment and, in particular, the payback in replacing unreliable labour… I’d have enough for a quite a few coffees. All upsized to Large.

These discussions are hugely important for both parties. How can any company, be they supplier / retailer / packhouse or other, even consider investing in thousands, or even millions, of dollars in capital equipment without having even a vague idea of what the payback looks like? And, in order to do this, what other costs associated with labour must we consider, and what efficiencies in minimising loss can we expect to gain, along the way? Every calculation has its own parameters and every company has its own view on what pieces of this puzzle cost monetary-wise.

But, as I’ve been driving around growing regions and see reddening apples on trees and fuzzy brown “gold” hanging from vines, I wonder what the cost of NOT getting this fruit to market is. What is the cost of not picking it because no one wants to perform the hard labour when required? What’s the cost of not packing apples into cartons ready for export palletising, simply because there’s no one to do so? This is a different prospect altogether to one of simply replacing labour.

And we’re not alone. Labour shortage for unskilled work or basic, more repetitive business functions is something other countries are dealing with too.

I’m not saying “rush out and buy a robot” and I’m not saying sit back and wait for the inevitable. The reality is labour is going to get more expensive, supply of labour will stiffen as developing nations modernise and economies improve AND the technology available is getting better, more robust and more affordable. Don’t ignore the signs.

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