4 ms·

It's a cool machine, and I'd buy a burger from it for the novelty factor, but I'm not sure the economics of it stack up. For each burger sold, the staffing cost

by beejiu 12y ago

It's a cool machine, and I'd buy a burger from it for the novelty factor, but I'm not sure the economics of it stack up. For each burger sold, the staffing cost is probably no more than 10 cents. This machine would have to be sold rather cheaply to be able to replace those staff. I've never had a problem with service time in most fast food restaurants, so I'm not sure this will improve experience for the customer. It'd be cool to see something like this applied to busy bars, where it could make any drink you wanted.

ams6110 12y ago
Labor is typically about 25% of sales, a very high volume restaurant might do a little better.
DanBlake 12y ago
It is pretty well understood that 25-30% percent of costs of operating a restaurant was the labor. Dont forget that things like payroll tax, health insurance, overtime, etc.. goes into that. Food is 25-40% and the rest is rent/profit.
- fred_durst 12y ago
  The machine still has an equivalent annual cost to compare to the workers salaries. Some things that you now have to pay for with machine labor compared to human labor below: 1. Up front payments: Parents and schools subsidized the manufacturing cost of human workers. With machine labor that cost is passed on to the buyer. 2. Energy: Employees feed themselves via their salary, or is often the case with subsidized food stamps. With machine labor the cost of energy falls entirely with the owner. 3. Replacement: If employees die or are otherwise unable to work do to catastrophic events, they can be replaced immediately with little on-boarding cost. If machines fail catastrophically the investment is lost(or needs to be backed up with insurance). Also, on-boarding the new machine requires specialized higher wage human labor. 4. Repair and modernization: As machines age they incure greater upkeep costs. They also become obsolete by newer machines. As employees age and become less capable of performing their duties, they can be let go, free of charge, for poor performance and replaced with a younger worker. Much like was discovered with slavery and indentured servitude, ownership of labor and free labor can be fairly close in cost if you know how to really exploit workers effectively. Harvesting in agriculture is an interesting place to look at how competitive exploited human labor can be compared to machine automation.
  - eru 12y ago
    > Harvesting in agriculture is an interesting place to look at how competitive exploited human labor can be compared to machine automation. Any business were machines having taking over, yet, is an example of that.
    - fred_durst 12y ago
      Agriculture is unique in that farmers will vary their choice season to season based on what is cheaper. It shows that low skilled labor is still very competitive, simply because of how incredibly cheap it is. There is much more incentive to turn an $80K a year programming position into a $30K a year lower skilled position using point and click tools to achieve the same task as the margin differences are much much higher. EDIT: You must remember that machine automation is not infinitely and immediately scalable the way software automation is. With agriculture, automation providers can only manufacture enough to meet current demand and cannot simply lower prices increase volume and market share because they have real raw material floors to their costs.
joshfraser 12y ago
A common rule of thumb in the food business is that 90% of your costs will be equally split between staff, rent and ingredients.
wmeredith 12y ago
I've managed a quick service restaurant and I can tell you this is the stuff of dreams for someone trying to manage that staff, Your estimate of the staffing costs is way too low. Hands down the biggest challenge was turnover. It took us about two weeks to train and employee and about a month after that for them to be really good in the kitchen (if they were ever going to be). The day crew were stoners and slackers, the night crew was high school kids. In other words, no one cared much about the job. Our turnover rate was probably 90% in a year and we offered a pretty nice food service job compared to something like fast food. (It was a McAlister's Deli. On par with a Panera.) Anyway, not having to train part-time staff, deal with their ongoing drama, substance abuse, constant scheduling conflicts, etc... would be worth a lot.
- moron4hire 12y ago
  This can't be overstated. Eliminating the minimum wage food worker is going to be have a huge impact on society. Both for the company and for the people who work there. I'm not sure what it means for the people. In one way, fast food is the only obvious work available for them. That's the only reason they do it, nobody likes it otherwise. But on the other hand, perhaps it's only the most obvious choice available. Perhaps more drastic choices, perhaps involving moving to new cities, would become more attractive and hopefully get them out of wage slavery. I'm grasping at straws. This is probably going to be bad for them.
  - afafsd 12y ago
    I think in the long term we're going to need a major demographic shift. High-capability people to rich countries and low-capability people to poor countries. If someone lives in the United States and isn't capable of any job beyond manual labour, they should probably look at moving to a country where manual labour is still in demand.
    - fred_durst 12y ago
      There are others, including myself, that believe low skill work is too cheap to be replaced in the near term. The exact opposite can be said for many currently "High-capability" people. That's why it's "software is eating the world" not "robots are eating the world". Mental process replacement is much, much more scalable than physical process replacement do to the raw material costs. We're much more likely to see things like doctors, lawyers and plumbers replaced with low skill workers that simply act out the last physical mile dictated by either fully automated decision making or software provided decision efficiency that allows for example, only one doctor to diagnose every patient at a hospital. The last physical mile is much more expensive than high level decision making to replace at scale.
deleted 12y ago
[deleted]
oh_sigh 12y ago
I don't think it makes sense to talk about average staffing costs per burger. Instead, you should just look at total cost of staffing without robots vs total cost of staffing + total cost of robotics with robotics.
ObviousScience 12y ago
If you look at a $30,000 robot for flipping burgers, and imagine it replaces one person working for a cost to the company of $8 per hour around the clock, you'd pay for it within a year. Assume that it's not perfect, and you have about 2 weeks of downtime a year, plus 2 additional days of down time a week, just for service, small issues, etc. So you'd have to buy a few to make it work, so their downtime didn't too significantly overlap, but that's $8/hr40hrs/wk50wk/yr*3shifts = $48000 per year. So if it essentially does the work of 3 people (120 hours per week), then you can come out ahead on replacing one station with a robot (assuming you have 3-4, so downtime doesn't totally kill production). Edit: I was thinking of something like this - http://en.wikipedia.org/wiki/Baxter_(robot) http://en.wikipedia.org/wiki/Baxter_(robot)
- fred_durst 12y ago
  You are leaving out a lot of the total cost of ownership. $30K is the sticker price. You should be calculating the EAC(Equivalent Annual Cost) of the robot. Things like, insurance, energy, maintenance, eventually upgrade/replacement. Remember the labor to fix a robot is much more expensive(probably around 10x with tools and other overhead) than the labor the robot is replacing. I wouldn't say it's definitely cheaper with human labor, but it's far from an obvious difference.
  - Turing_Machine 12y ago
    Don't forget to add the cost for Obamacare on the human side.
  - ObviousScience 12y ago
    I was including that in my calculations: I based the robot price at $30k, but that leaves room to include another $18k in yearly expenses ($1500 a month or $50 a day). This may of course be on the low side, but I also figured in only working 250 days of the year. It's likely that uptime of a commercial product would be somewhat better than this. My main point was that we're surprisingly close to the point where it's cheaper (in just a wage-versus-cost-of-ownership sense) to have robots replace more general purpose workers.
- 12y ago

by beejiu 12y ago

ams6110 12y ago

Labor is typically about 25% of sales, a very high volume restaurant might do a little better.

DanBlake 12y ago

It is pretty well understood that 25-30% percent of costs of operating a restaurant was the labor. Dont forget that things like payroll tax, health insurance, overtime, etc.. goes into that. Food is 25-40% and the rest is rent/profit.

fred_durst 12y ago
The machine still has an equivalent annual cost to compare to the workers salaries. Some things that you now have to pay for with machine labor compared to human labor below: 1. Up front payments: Parents and schools subsidized the manufacturing cost of human workers. With machine labor that cost is passed on to the buyer. 2. Energy: Employees feed themselves via their salary, or is often the case with subsidized food stamps. With machine labor the cost of energy falls entirely with the owner. 3. Replacement: If employees die or are otherwise unable to work do to catastrophic events, they can be replaced immediately with little on-boarding cost. If machines fail catastrophically the investment is lost(or needs to be backed up with insurance). Also, on-boarding the new machine requires specialized higher wage human labor. 4. Repair and modernization: As machines age they incure greater upkeep costs. They also become obsolete by newer machines. As employees age and become less capable of performing their duties, they can be let go, free of charge, for poor performance and replaced with a younger worker. Much like was discovered with slavery and indentured servitude, ownership of labor and free labor can be fairly close in cost if you know how to really exploit workers effectively. Harvesting in agriculture is an interesting place to look at how competitive exploited human labor can be compared to machine automation.
- eru 12y ago
  > Harvesting in agriculture is an interesting place to look at how competitive exploited human labor can be compared to machine automation. Any business were machines having taking over, yet, is an example of that.
  - fred_durst 12y ago
    Agriculture is unique in that farmers will vary their choice season to season based on what is cheaper. It shows that low skilled labor is still very competitive, simply because of how incredibly cheap it is. There is much more incentive to turn an $80K a year programming position into a $30K a year lower skilled position using point and click tools to achieve the same task as the margin differences are much much higher. EDIT: You must remember that machine automation is not infinitely and immediately scalable the way software automation is. With agriculture, automation providers can only manufacture enough to meet current demand and cannot simply lower prices increase volume and market share because they have real raw material floors to their costs.

joshfraser 12y ago

A common rule of thumb in the food business is that 90% of your costs will be equally split between staff, rent and ingredients.

wmeredith 12y ago

I've managed a quick service restaurant and I can tell you this is the stuff of dreams for someone trying to manage that staff, Your estimate of the staffing costs is way too low. Hands down the biggest challenge was turnover. It took us about two weeks to train and employee and about a month after that for them to be really good in the kitchen (if they were ever going to be). The day crew were stoners and slackers, the night crew was high school kids. In other words, no one cared much about the job. Our turnover rate was probably 90% in a year and we offered a pretty nice food service job compared to something like fast food. (It was a McAlister's Deli. On par with a Panera.) Anyway, not having to train part-time staff, deal with their ongoing drama, substance abuse, constant scheduling conflicts, etc... would be worth a lot.

moron4hire 12y ago
This can't be overstated. Eliminating the minimum wage food worker is going to be have a huge impact on society. Both for the company and for the people who work there. I'm not sure what it means for the people. In one way, fast food is the only obvious work available for them. That's the only reason they do it, nobody likes it otherwise. But on the other hand, perhaps it's only the most obvious choice available. Perhaps more drastic choices, perhaps involving moving to new cities, would become more attractive and hopefully get them out of wage slavery. I'm grasping at straws. This is probably going to be bad for them.
- afafsd 12y ago
  I think in the long term we're going to need a major demographic shift. High-capability people to rich countries and low-capability people to poor countries. If someone lives in the United States and isn't capable of any job beyond manual labour, they should probably look at moving to a country where manual labour is still in demand.
  - fred_durst 12y ago
    There are others, including myself, that believe low skill work is too cheap to be replaced in the near term. The exact opposite can be said for many currently "High-capability" people. That's why it's "software is eating the world" not "robots are eating the world". Mental process replacement is much, much more scalable than physical process replacement do to the raw material costs. We're much more likely to see things like doctors, lawyers and plumbers replaced with low skill workers that simply act out the last physical mile dictated by either fully automated decision making or software provided decision efficiency that allows for example, only one doctor to diagnose every patient at a hospital. The last physical mile is much more expensive than high level decision making to replace at scale.

deleted 12y ago

[deleted]

oh_sigh 12y ago

I don't think it makes sense to talk about average staffing costs per burger. Instead, you should just look at total cost of staffing without robots vs total cost of staffing + total cost of robotics with robotics.

ObviousScience 12y ago

If you look at a $30,000 robot for flipping burgers, and imagine it replaces one person working for a cost to the company of $8 per hour around the clock, you'd pay for it within a year. Assume that it's not perfect, and you have about 2 weeks of downtime a year, plus 2 additional days of down time a week, just for service, small issues, etc. So you'd have to buy a few to make it work, so their downtime didn't too significantly overlap, but that's $8/hr40hrs/wk50wk/yr*3shifts = $48000 per year. So if it essentially does the work of 3 people (120 hours per week), then you can come out ahead on replacing one station with a robot (assuming you have 3-4, so downtime doesn't totally kill production). Edit: I was thinking of something like this - http://en.wikipedia.org/wiki/Baxter_(robot) http://en.wikipedia.org/wiki/Baxter_(robot)

fred_durst 12y ago
You are leaving out a lot of the total cost of ownership. $30K is the sticker price. You should be calculating the EAC(Equivalent Annual Cost) of the robot. Things like, insurance, energy, maintenance, eventually upgrade/replacement. Remember the labor to fix a robot is much more expensive(probably around 10x with tools and other overhead) than the labor the robot is replacing. I wouldn't say it's definitely cheaper with human labor, but it's far from an obvious difference.
- Turing_Machine 12y ago
  Don't forget to add the cost for Obamacare on the human side.
- ObviousScience 12y ago
  I was including that in my calculations: I based the robot price at $30k, but that leaves room to include another $18k in yearly expenses ($1500 a month or $50 a day). This may of course be on the low side, but I also figured in only working 250 days of the year. It's likely that uptime of a commercial product would be somewhat better than this. My main point was that we're surprisingly close to the point where it's cheaper (in just a wage-versus-cost-of-ownership sense) to have robots replace more general purpose workers.
12y ago