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Jobs are automated only and only if: If it increases yield by magnitudes while also improving quality by magnitudes. Example from the Pickle factory: You hav

Jobs are automated only and only if: If it increases yield by magnitudes while also improving quality by magnitudes. Example from the Pickle factory: You have 4 people putting and screwing lids on pickle jars. 4 people. 2000 Lids a day. With around 40 faulty lids. Lets say you pay those 4 20k a year: total 80k. An automation solution would cost you at least 400-500k. So unless this automation can do 20 000 lids a day and with only 10 faulty lids per day. Then Maybe it will be worth it. But most of the time it would not be automated.

altvali 5y ago
That's implying that automation costs that much every year, or that you must get an ROI of 100%. Almost in all cases, automation has a high setup cost but a low maintenance cost.
- thendrill 5y ago
  No no. What I meant was that, the automation usually costs around 15x-20x annual salaries of the workers, one time cost maintenance comes after . So unless you get MORE THAN 20x - 30x yield per year, no one is gonna care about automating the process.
onion2k 5y ago
This is one reason why "knowledge worker" jobs like accounting and legal were the first to be disrupted by automation and AI. It's a heck of a lot cheaper and easier to automate manipulating a spreadsheet than it is to automate manipulating a pickle jar.
- marcus_holmes 5y ago
  The Industrial Revolution begs to differ
tarr11 5y ago
Capital investments occur when the cost of labor is greater than the cost of automation. The rate at which these investments occur is complex. Here is a short example from the agricultural industry. https://ecommons.cornell.edu/bitstream/handle/1813/44561/Manager%20July%202016%2010%2C11.pdf?sequence=2&isAllowed=y https://ecommons.cornell.edu/bitstream/handle/1813/44561/Man...
jjk166 5y ago
As a manufacturing automation engineer, I can say that this is an incorrect view. First, employees are way more expensive than their takehome pay. You have benefits, liability, managerial overhead, training, turnover, and facilities costs for every employee. Someone making 20k/yr might easily cost a company 50k/yr to employ. Second, automation is rarely done to simply replace people. You automate tasks, not jobs. Most customers are looking for improved consistency, not increased yield or quality. That improved consistency means they can better predict their supply chains which leads to savings which dwarf the costs of labor. The other major reason for automation is reducing skill requirement - this frees up skilled employees for more valuable tasks, and removes a major impediment to scaling production. Finally, most companies have no problem investing in automation. Interest rates are low so its easy to get cheap financing, and robots are in vogue so many companies will invest in automation even where it makes no sense to portray themselves as efficient. Indeed, most companies are more concerned with their valuation than their profits, and the more automated a company is, the more valuable it is in a sale. It's actually really hard to convince customers that they'ed be better served by a cheaper, simpler solution.
- thendrill 5y ago
  Yes. Everything you said is exactly on point. I was just trying to make a very simplified example that automation is never done to save human labour.

altvali 5y ago

That's implying that automation costs that much every year, or that you must get an ROI of 100%. Almost in all cases, automation has a high setup cost but a low maintenance cost.

thendrill 5y ago
No no. What I meant was that, the automation usually costs around 15x-20x annual salaries of the workers, one time cost maintenance comes after . So unless you get MORE THAN 20x - 30x yield per year, no one is gonna care about automating the process.

onion2k 5y ago

This is one reason why "knowledge worker" jobs like accounting and legal were the first to be disrupted by automation and AI. It's a heck of a lot cheaper and easier to automate manipulating a spreadsheet than it is to automate manipulating a pickle jar.

marcus_holmes 5y ago
The Industrial Revolution begs to differ

tarr11 5y ago

Capital investments occur when the cost of labor is greater than the cost of automation. The rate at which these investments occur is complex. Here is a short example from the agricultural industry. https://ecommons.cornell.edu/bitstream/handle/1813/44561/Manager%20July%202016%2010%2C11.pdf?sequence=2&isAllowed=y https://ecommons.cornell.edu/bitstream/handle/1813/44561/Man...

jjk166 5y ago

As a manufacturing automation engineer, I can say that this is an incorrect view. First, employees are way more expensive than their takehome pay. You have benefits, liability, managerial overhead, training, turnover, and facilities costs for every employee. Someone making 20k/yr might easily cost a company 50k/yr to employ. Second, automation is rarely done to simply replace people. You automate tasks, not jobs. Most customers are looking for improved consistency, not increased yield or quality. That improved consistency means they can better predict their supply chains which leads to savings which dwarf the costs of labor. The other major reason for automation is reducing skill requirement - this frees up skilled employees for more valuable tasks, and removes a major impediment to scaling production. Finally, most companies have no problem investing in automation. Interest rates are low so its easy to get cheap financing, and robots are in vogue so many companies will invest in automation even where it makes no sense to portray themselves as efficient. Indeed, most companies are more concerned with their valuation than their profits, and the more automated a company is, the more valuable it is in a sale. It's actually really hard to convince customers that they'ed be better served by a cheaper, simpler solution.

thendrill 5y ago
Yes. Everything you said is exactly on point. I was just trying to make a very simplified example that automation is never done to save human labour.