Implications And Points / Counterpoints Of Autonomous Guided Vehicles For Georgia-Pacific

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Positive Implications

For Georgia-Pacific, AGVs will have many positive implications starting with safety. The safety implications behind switching to AGVs are huge, because forklifts have always been a main source of injury in the workplace. According to OSHA’s website, forklifts account for 61, 800 non-serious accidents, 34, 900 serious accidents, and 85 fatal accidents per year. AGVs will significantly drive down the number of injuries, because they are programmed for the intention of safety, with sensors and lasers built in to ensure they can operate around people and objects. Reducing the amount of injuries is the main goal, but it also comes with positive financial implications as well.

Using OSHA’s Safety Pays Program as a benchmark, the average forklift injury can cost up to $59, 292 in direct costs and $65, 221 in indirect costs. That means that one injury can cost GP up to $124, 513 (24). The extent to which GP would pay the direct costs depends on their insurance policy, but GP is fully responsible to pay the indirect costs. To put this into perspective, sales to cover the indirect costs alone would be around $2, 174, 040 (24). Implementing AGVs will have a direct correlation to driving down these injury costs. GP can also bring into account the cost savings of not having to employ as many people. With an AGV, GP pays one single expense to purchase it, then occasionally pays for repairs. With human workers, GP is responsible of paying a salary with lots of ongoing costs such as health insurance, taxes, PTO, raises, etc. Furthermore, humans make mistakes. Replacing humans with AGVs, will inevitably drive up productivity and reduce wasted time. Factors that can decrease their productivity, such as fatigue and distraction, will be obviously eliminated with AGVs. Human personnel are also limited with their working hours, only being able to work a certain number of hours a day. AGVs, on the other hand, can virtually be operating 24/7 with the exception of changing out batteries.

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Lastly, productivity can be driven up even more once GP streamlines the entire process by integrating the AGVs with the management system for the warehouse. The final positive implication of AGVs is that they will increase employee satisfaction. History has proven that robots have not replaced work, they have just changed it. In a 2018 study about robots at work, it was deemed that there is no significant relationship between the increased use of industrial robots and overall employment, with the one exception that low-skilled workers could lose jobs. That being said, there are positive implications of GP’s low-skilled jobs going away. GP can roll out programs to train their low-skilled workers to enabling them to work more fulfilling jobs. GP can also decrease the number of hours employees have to work, giving them more time for leisure. This will allow GP’s employees to be happier in the workplace, which is proven to be beneficial for the overall culture of atheir company.

Negative Implications

Despite all the positive implications that arise with AGVs, there will likely be many negative consequences with this technology. One of the largest concerns for Georgia Pacific is the cost of development and adoption of AGV systems. Currently, the purchase of an AGV is very cost effective compared to the offset of the wage that is no longer associated with the job the automation replaces. However, as this technology advances and incorporates an interconnected system of artificial intelligence, it will become costly for manufacturing and warehousing companies, like GP, to develop their own platform. For this reason, another likely consequence is the reliance on other companies for the outsourcing of the AI-connected AGV platform. On the surface this does not seem too negative, but over time manufacturers will be faced with the challenge of trusting these companies to manage their platform with all of their data. Manufacturers will want to use these AGV platforms to maximize their logistic efficacy and maintain their inventory data, so over time this will become a great issue.

Another obvious consequence of the progression of AGV technology will be the industry-wide job deletion. It is currently debated how many jobs this automation will actually destroy, but the one thing that is certain is the replacement of low-skilled manual jobs such as forklift operators due to the adoption of AGVs. As shown by the prediction of the smart warehouse standard, it is possible that all warehouse floor jobs will be replaced by automation. GP and other manufacturers would save a lot of money from this innovation, but the cost of losing these jobs for the economy may force labor union retaliations or government-instituted robot tax policies. It is possible that jobs are created from this technology to oversee the operation of AGVs, but in general this job shift will not outweigh the amount of jobs lost.

One last possible unintended consequence is the increased cost from manufacturing disruption. Currently, the largest cause of disruption in the production line is human error, which will be diminished over time as AGVs and other automation replaces the role of humans in operations. However, even though the change of error may decrease with the adoption of AGVs, the scope of error will greatly increase. This is due to the perfection standard that automation requires. With humans operating warehouse jobs, their ability to adapt is often overlooked when weighing the benefits of automation. Human error may account for the most disruption, but it can be typically fixed quickly, whereas an error in AGVs may not be as common but will cause a much greater disruption in operation. The cost of this large disruption will likely be greater than the current cost of frequent human error disruption. As AGV technology advances, these negative consequences must be considered when projecting the future of this technology for Georgia Pacific.


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