Change is coming to the Industrial Refrigeration world…

I have seen the future and it is going to mean some very large changes for the Industrial Refrigeration industry. As always, I want to talk about something else, before I get to my point…

I want to talk about Cold Storage / Distribution Warehouses. My first refrigeration job was in an Ice Cream plant that had the traditional, old-school distribution model. People placed packages on pallets manually, picked up the pallets with lifts, put them in racks, and recorded it on a log. Later, when the product was needed, they pulled the pallets down with a lift, took off the packages they needed and placed them on a separate pallet. Forklift drivers took the finished pallets and put them on trucks. It was very labor intensive, required the people to work in brutal environments (-20f at the warmest) and was a little hit-and-miss when it came to inventory tracking. Still, it worked and many people had been doing it their whole careers.

A few years down the road I was at a grocery distribution warehouse. They had added some fancy computer tracking system that told them through a headset what rack to go to. All the packages were scanned when they were put on a pallet or taken off. Still, it was very labor intensive and still awfully cold for the employees.

A few years ago I was at a restaurant supply distribution warehouse that was nearly fully automated. Pallets came off the trucks, were moved to racks by robots. When the pallet was needed for an order, it was removed from the racks by a robot and then put on the floor so people could pick the package they needed. It removed a lot of the labor and nearly all of the rack damage.

A few weeks ago I was in a distribution warehouse for a major retailer. Thousands of SKU’s. Robots did it all. People took the pallets off the trucks and scanned them – from there the robots stored them, picked packages from them, even created the pallets for shipping. Hell, the thing arranged the packages on the pallet so that the employee at the store could pick from the top down and only have to travel one way at the store to re-stock the shelves. The only people left in the operation were the people who unloaded the original pallets from the trucks, loaded the finished picked pallets on the trucks, and the people who maintain the robots.

Check out this video from EDNA International to see how this sort of system works:

Amazing isn’t it? Now think about how many people aren’t needed in these distribution warehouses due to these robots. About 95% of the people that used to work in this warehouse aren’t needed anymore. The few jobs that remain are extremely low-skilled (janitorial, pallet jack operator) and extremely high-skilled such as PLC programmer, electrician, maintenance. All the middle-skill jobs are gone. The sorters, pickers, supervisors, lift operators – They’ve all been replaced by automation.

Ok, now let’s get back to Ammonia refrigeration. I was talking with a colleague about a month ago that was struggling with operating his refrigeration systems. Not because they were problem systems, but because he didn’t have the people he needed to operate them the way they had traditionally operated them. They weren’t available at the wage his employer was willing to pay. He thought that something was happening with wage growth for refrigeration operators.

Traditionally, the refrigeration system was operated by skilled technicians – usually the best the maintenance department had to offer. You trained these already good people in the art & science of refrigeration and they were the caretakers of the system. Then something interesting happened as the equipment and the system design became more complex. The job got harder in some ways and easier in others. Refrigeration system automation made running the systems easy, and fixing them really tough. There were completely new skills needed and those skills were in very high demand.

It reminded me of what happened to the car industry. It used to be that anyone with a bit of sense could maintain a vehicle. With a little trial and error and a Chilton’s manual, you could learn to fix it. As those cars got more complex, the job got beyond the skill and training that the normal person has. The job market for auto mechanics lost the middle. There are jobs to drain oil and they don’t pay enough to make ends meet. At the other end of the spectrum there are jobs that require computer skills, electrical troubleshooting, advanced diagnostics, etc. and those jobs pay very well because there aren’t many people that possess all those skills.

While I was standing in this amazing automated warehouse, watching the robots whir around me at unbelievable speed, I had a moment when some things clicked in my head. I think the days of the blue collar refrigeration mechanic are almost over. It pains me to say this, because I’ve come to love and admire this workforce over the past decade, but I think the writing is on the walls. Like in auto mechanics, and distribution warehouses, the middle in the refrigeration industry is being hollowed out. I’m not particularly happy about it, but I don’t think it’s avoidable.

So, what does the future look like? Here’s my guess:

  • Very automated computer-controlled refrigeration systems with redundant capacity and safeties.
  • Low-skill (and sadly, low-wage) employees that monitor that system and perform walk-through’s to observe its operation.
  • A small, very high-skill, very high-wage group of employees (or contractors) that troubleshoot and maintain the system.

I’ve actually talked to a couple people that already run their systems this way. Normal, everyday tasks such as system monitoring is done by low-skill, low-pay employees. They receive enough training to not be a danger to themselves and others, but once they get to an issue they call a regional engineer or an outside contractor. Routine maintenance (draining oil pots, cleaning condensers, calibrating sensors, etc.) is all outsourced to highly skilled contractors.

If you are currently in the middle of the refrigeration workforce, this doesn’t come as good news. You may want to consider up-skilling to grab those high-skill high-pay regional / contractor jobs. I could be wrong, but I think if you discuss this at your next RETA meeting or maintenance get-together, you’ll find out that it’s already happening.

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Interesting link at NPR – Will your job be done by a machine?

About Brian Chapin

PSM / RMP Compliance Consultant
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