We read a lot about the “typical” small business owner. The store owner on Main Street. The talented restaurateur. The plucky entrepreneur selling products online. Those make good stories. But what doesn’t make the news very often is the typical small business owner. That’s the 50-plus-year-old who’s running a family business out of a dilapidated warehouse near the city airport, making and distributing boring and unsexy products that actually make the world turn and in turn are used by other businesses in their boring and unsexy production facilities. Those are generally my clients.
Faced with tight margins and unattractive environments, they struggle to find and compensate their people competitively, let alone comply with local and federal regulations to operate safely. These are the business owners that would jump at the opportunity to reduce their headcount if they could do so while still meeting customer demand. Like Amazon, Toyota, FedEx and Coca-Cola, they are always thinking of technologies to help them accomplish these goals. But unlike those companies, few have been able to afford these tools. But that’s changing.
Just this week, Boston Dynamics, an engineering and robotics design company, launched a new product it calls the “Stretch” robot. And for any small business owner running a warehouse or production facility, it looks tempting indeed.
According to the company’s website, the robot comes designed to handle many different types of pallets. It can gauge diameters with a “perception mast” of cameras and sensors and then is able to pick up packages and materials weighing up to 50 pounds using a suction pad “hand” that’s attached to a multi-jointed robotic arm.
But that’s not all. The robot is designed to handle a “large variety of boxes and shrink-wrapped cases” and has special technology that can recognize different kinds of packages. It alone can move up to 800 cases an hour which is “equivalent to a human employee”. And the cost? The company hasn’t disclosed it but some report a price tag of about $75,000.
“Stretch is a versatile mobile robot for case handling, designed for easy deployment in existing warehouses,” the company says. “Unload trucks and build pallets faster by sending the robot to the work, eliminating the need for new fixed infrastructure.”
Anyone want to guess what they mean by eliminating “fixed infrastructure”? People.
I did the math, and the cost for a small business owner to license a $75,000 Stretch robot would be about $18,000 a year. Even allowing for maintenance and a few hours of labor required to operate, that’s a whopping savings over an employee making even a $15 per hour minimum wage (most warehouse and production workers make significantly more than that), particularly when you also add in taxes, benefits and the intangible cost of dealing with a human and all the rules required to employ that human.
Companies such as Boston Dynamics will bend over backwards to say that their products are not designed to replace people. But that’s a load of baloney. The Stretch robot does and considering the investment required I’m betting it – and the many similar and affordable robotic products that are emerging – will be a very attractive consideration for a wide swathe of small business owners in the not-too-distant future.
Many of my clients – particularly older business owners – have resisted these types of technologies. But as labor costs, regulations and employee demands continue to increase and the robots get cheaper and better, those same owners – feeling the pressure – will replace people with robots like Stretch. The robots are coming.