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Versatile automation - mark my words!

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Recently, I had the possibility to familiarize myself with the blossoming Polish logistics market. Guided through enlightening tours of some of Poland's large logistics players and service providers, it is a startling discovery find that the automation boom which is taking place in Germany, the Nordic countries and the USA is not visible in Poland at all. My immediate suspicion is that the threshold between profitable automation investment and manual work is suspended somewhere between German and Polish salary costs.

An even more worrisome discovery is that in Poland your investment can be subsidized by the EU so, it's not the depreciation of the investment that makes the difference, it's the costs of running automation (maintenance, upkeep, etc.).

The big question is this: "Is the threshold large enough to justify investment by countries with notoriously expensive labor costs?" What I'm after with this question is the fact that depreciation is a fixed cost; labor is not. Right now Poland is playing very moderately with its currency exchange rate and has been weakening just enough to keep investments flowing in. In the future, however, their currency could be used more aggressively.

From an EU standpoint, Poland is the model example of things done right: repairing the infrastructure, being competitive, attracting investment and creating jobs. Poland boasts multiple examples of investments in manufacturing, which have been transferred into Poland from Asia simply due to the fact that Poland maintained a focal point on Asian trade.

In conclusion, it is my firm belief that logistics automation is currently headed in the wrong direction and, that logistics companies building highly sophisticated and very effective material handling devices, which can do only one thing at a time should, instead, invest in versatile automation, which can do multiple things at an average speed. By so doing, maintenance costs could be cut, lifetime costs could be cut and modifications to investment would meet the current market trends, much like the human does.

Aki Jumppanen

Aki is HUB logistics´s Managing Director