Is Canada keeping up with automation?
Grocery giant Sobeys has bet on big tech with a massive new warehouse in Vaughan, Ont.
Its robotic, automated warehouse is the only one of its kind in Canada, and it’s the launching pad for automated online grocery home delivery across the greater Toronto area.
The robots manoeuvre their way around a giant warehouse, called “the hive,” moving at an astonishing speed of four metres per second.
“By centrally controlling everything in this automated warehouse, we have better control over the freshness and the quality. We know everything coming in and we know everything going out,” said Sarah Joyce, senior vice president of e-commerce at Sobeys.
“It takes two years to build a facility like the one I’m sitting in. It’s a $100-million investment.”
From an outside perspective, it’s easy to say Sobeys lucked out in its timing. After all, the pandemic forced millions of Canadians to stay home and work remotely.
Pre-COVID-19, shopping online for groceries represented just one per cent of all Canadian grocery sales. It just wasn’t something Canadians were used to doing. Sobeys is aiming to push that number up to five per cent, and eventually 10 per cent.
The company faced a choice two years ago. To distinguish itself from its competitors, it needed something big. So it invested $100 million in new technology and a platform created by Ocado, a British company known for automated warehouses and online grocery delivery.
“With the robots, they can pick a 50-item grocery order in five minutes. That compares to about 50 minutes that it would take someone walking around a store to pick an equivalent order,” Joyce told Global News.
Sobeys’ warehouse opened in the middle of the pandemic in June, just as e-commerce sales were soaring. Those sales grew 241 per cent in the second quarter of 2020 compared to the same period the year before.
The company is planning to open three new fulfilment centres — a second one in Montreal, and two others in Western Canada.
The automated warehouse uses aspects of artificial intelligence, robotics and big data in everything from the website and mobile app to the facility’s robots and finally the routing and logistics to get orders where they’re supposed to go.
Humans do the grocery packing, while the robots sort and restock.
The process is a prime example of the possibilities offered by automation and innovation. Sobeys’ automated warehouse is the “fourth” industrial revolution in action. Industry 4.0, as it’s known, is all about automation, machine learning, robotics and artificial intelligence.
Is Canada ready?
Canadian industry is lagging behind global leaders when it comes to automation, according to warehouse automation consultant Ben Angel.
Angel says companies, notably Amazon, along with other commercial and industrial players in the United States, Europe, China and Japan, are automating so fast that they risk leaving their Canadian competitors in the dust.
“Canadians are slow to innovate,” and in part, he says, that’s because of the luxury of being next to the world’s biggest economy.
“We typically have a ready-made market, the U.S., where we’re still going to be profitable, but we don’t necessarily have to spend money at the warehouse level (to automate).”
He says that, 20 years ago, the majority of robots in the country could be found in the auto sector. But even as Canadian industry modernized, its warehouses in large part have not kept up.
It takes a tremendous amount of technology and investment to transform a supply chain so that a product ordered online can get delivered to a customer’s house in one to two days, or in some cases, less than one day, compared to three or four days.
And yet, Angel says, “you go into most warehouses, it’s full of forklifts.” Replacing those forklifts with robots that can do the work more quickly and efficiently creates cost savings. That allows companies, like Sobeys, to scale their e-commerce in ways that would have been far more expensive otherwise.
The power of education
One area where Canada is innovating and keeping pace is education. Canadian colleges and universities produce some of the best students in the fields of artificial intelligence, robotics and engineering, attracting talent from around the world.
That emerging talent pool, says Shaun Ghafari, the associate dean of the faculty of applied sciences and technology at Humber College in Toronto, is needed to address the huge demand for highly skilled workers.
“The stakes are very, very high here because we’re talking about global competition, and a lot of companies, countries in the world, are ahead of us,” Ghafari says.
One of Ghafari’s recent graduates, Mauricio Toigo, came to Toronto from Brazil because of the opportunities he saw to work in the field of automation in Canada.
“I love the idea of thinking about or designing a machine, thinking about a concept and developing it,” Toigo told Global News’ The New Reality.
Now a lab technologist at Humber, Toigo points out that automation will eventually be in “every single process that we do.” He points out that if customers want one-day delivery on their online shopping products, “the only way to do that, really, is with automation.”
This shift to robotics and artificial intelligence has led to concerns about job losses. These concerns are hardly new, and date all the way back to the Industrial Revolution in England, when textile workers destroyed machines they feared would eliminate their jobs.
“The first Industrial Revolution could have happened a lot earlier if it wasn’t for the resistance to mechanization by craft guilds,” author and economic historian Carl Frey told Global News’ The New Reality.
There is little disagreement among experts that automation will transform labour — especially routine labour that can be easily replaced by machines. This includes both routine manual labour and, increasingly, routine labour of a “cognitive” nature, including many administrative jobs.
A Statistics Canada report published last year predicted that 35 per cent of back-office workers are susceptible to losing their jobs to automation. A fifth of specialized service sector jobs — bakers, butchers and cooks, for example — and jobs in the industrial, electrical and construction trades were also at high risk of automation-related transformation.
Frey says that the Industrial Revolution similarly resulted in the widespread elimination of middle-income jobs. “Even as the British economy took off, many people didn’t see the gains from growth trickle down for seven decades,” he says.
That “hollowing out” is, once again, repeating itself.
“If you look at routine jobs, there’s been a massive decrease over the last 30, 40 years, but it has come in spurts,” says Joel Blit, an associate professor of economics at the University of Waterloo.
But focusing just on potential job losses doesn’t paint the full picture of the impacts of automation, Blit says. Many non-routine jobs still can’t be replaced by machines, and have in fact been growing.
“The thing I’m most worried about,” he says, “is potentially increasing inequality, because even after the market settles down and people find new jobs, it’s not the case that their jobs are going to be as good as their old jobs.”
The need for speed
But none of this is an excuse not to push forward with automation — and fast.
All the experts whom Global News spoke with agreed that automation will make Canada better off, and that Canadian companies and governments have to pick up the pace to stay competitive with the rest of the world.
Sobeys says that far from resulting in a net loss of jobs, automation is creating new jobs to do tasks around the machines that have not been automated, including servicing them. “We hired over 450 people to complement the automation,” says Sarah Joyce at Sobeys.
It’s clear that automation is replacing many tasks. But many others are also being created for human workers. The unanswered question, therefore, isn’t simply whether jobs are lost. Instead, it’s whether there are good, stable, high-paying jobs being created around the robots, or simply a lot more low-skilled, low-paid, precarious employment?
“The end result is still not so clear,” says Joel Blit, the University of Waterloo economics professor.
The big challenge with automation is figuring out how to make sure wealth gets evenly distributed throughout the economy, and not just to the highly skilled, well-paid workers at the top.
One way to ensure fairness is to have a strong social safety system, so that people have access to things like health care, or a basic income, to support them if they face economic uncertainty.
“Change is going to happen,” Blit says.
“But we also have to make sure that we have the right policies and supports in place so that all Canadians benefit and not just some.”
See this and other original stories about our world on The New Reality airing Saturday nights on Global TV, and online.