Daily Archives: March 2, 2017

Wendy's Co., home of the old-fashioned burger, is serving up something cutting-edge: self-service ordering kiosks.

The Dublin, Ohio-based fast-food company is adding machines to at least 1,000 restaurants, or about 15% of its stores, by the end of the year. Wendy's began installing these kiosks last year, enabling diners to order without help from behind-the-counter workers.

Wendys is joining other eateries that are marching toward automation for at least someof the dining experience.

Panera Bread has said it plans to add touch-screen kiosks to all its restaurants within a few years. McDonald's also aims to roll out kiosks where diners can customize their burgers at all its U.S. locations. One cafe in San Francisco serves coffee brewed up by a robotic barista.

These kinds of self-serve machines and related technology could drastically change the way the $230-billion fast-food industry operates, analysts said. With minimum wages rising to $15 in some parts of the country, including California many chains are looking at ways to slash labor costs.

Lots of restaurants, not just fast-food chains, are really trying to mitigate the costs of higher wages, said Lauren Hallow, concepts analyst at Technomic, a restaurant market research firm.

Some eateries, for instance, are offering incentives to encourage mobile ordering so that lines are shorter with apps with special discounts and the chance to jump the line when picking up orders.

At Wendy's, Chief Information Officer David Trimm said that customers and franchisees have taken a liking to the kiosks.

You will see customers deliberately going to those kiosks

directly, bypassing lines," Trimm said during the companys investor day Feb. 16. Some customers clearly prefer to use the kiosks.

Theres a huge amount of demand among franchisees, who will shell out about $15,000 for three kiosks, Trimm said. Wendys has estimated that the cost will be recouped in less than two years, he said.

These kinds of kiosks are not new but are gaining traction in restaurants becausediners have finally been groomed by the rise of online and mobile ordering to embrace the technology.

Young diners, especially, find interacting with a machine often easier than dealing with human workers. More than40% of millennials said they would use kiosks in a restaurant, compared with nearly 30% of all customers, a recent Technomic survey found.

Young customers like to control the whole ordering process," Hallow said. They have the chance to go quickly if they want to, or they can linger and see what the choices are without a cashier waiting.

In the long term, many chains are looking toward kiosks as a way to reduce their employee headcount, especially as wages rise.

Worker advocates have long been skeptical of automation in the fast-food industry.

If fast-food companies could replace us with machines, they would have done it already, Anggie Godoy, a leader in the Fight for $15 movement in Los Angeles, said in a statement last November. The fact is, we are in the service business and fast-food restaurants are always going to need good workers.

But not every restaurantis looking to replace theworkforce with machines at least not immediately.

Panera Bread, for example, has increased hours for employees at some locations to service the higher number of orders that come in through self-serve kiosks, said Nick Setyan, senior vice president of restaurants equity research at Wedbush Securities.

They just had too many people in line and they felt they were losing transactions because they just didn't have enough room to process orders in a reasonable amount of time, Setyan said. With the uptick in orders after the kiosks were installed, Panera Bread upped man hours in the kitchen to deal with the backlog.

For Wendys, kiosks are part of an overall move into automation that could cut labor costs, said Robert Wright, chief operations officer. He called 2016 a tough" year, with wages rising 5% compared with 2015.

Supervisors could use automation to take food temperatures and do other duties, Wright said.

There are repetitive production tasks that are in Wendy's restaurants that aren't core to the things that customer loves the most, he said.

That would give a boost to Wendy's, which has proved more adept than many fast-food rivals at navigating changing consumer tastes.

In mid-February, the chain reported its 16th straight quarter of increasing sales for restaurants open at least 15 months. It reported falling sales and profit overall, but that was mostly due to a strategic decision to sell off the vast majority of its company-owned stores a plan Wendy's completed in the fourth quarter.

The companys stock is up nearly 46% in the last year, and it recently announced the shareholder-pleasing moves of boosting its quarterly dividend to 7 cents a share, up half a penny, and authorizing a $150-million stock buyback.

shan.li@latimes.com

Follow Shan on Twitter @ByShanLi

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Wendy's adds automation to the fast-food menu - Chicago Tribune

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Sikorsky Moves to Phase 3 of DARPA Cockpit Automation Program - Aviation International News

In Brief

Experts have predicted that machines will take over a good number of jobs in the next five to ten years, but for a Dublin-based Wendys the automation began last year with their self-ordering kiosks. The demand for the technology has been rather high, coming from both costumers and franchise owners.

There is a huge amount of pull from (franchisees) in order to get them, according to the Wendys chief information officer David Trimm, speaking during the companys investors day. With the demand we are seeing we can absolutely see our way to having 1,000 or more restaurants live with kiosks by the end of the year.

Obviously, these kiosks would cut labor costs: They are looking to improve their automation and their labor costs, and this is a good way to do it, said Darren Tristano, VP at food-service research and consulting firm Technomic. They are also trying to enhance the customer experience. Younger customers prefer to use a kiosk.

They always are courteous. They always show up for work on time, Bob Welcher, president of Restaurant Consultants Inc., jokedabout the kiosks last year.

As automation reaches the food industry, Wendys is taking the lead. It helps that the kiosks are made in-house, at the companys 90 Degrees lab on North High Street in the University District. So we know that the things we build work, Trimm said.

Wendys is the third largest burger chainin the world, afterMcDonalds and Burger King. In the United States, around 49 million consumersgo to Wendys each month, and self-serve kiosks could definitely help those numbers climb higher.

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One Fast Food Chain Is Adding Automated Kiosks to 1000 of Its Restaurants in 2017 - Futurism

Oilfield automation may slow job growth but it doesn't have to

Last week, I wrote about the race to create a digital platform to help drillers deploy and track trucks and other equipment to service their wells in the most efficient possible way, with shorter trips and seamless billing an Uber for the oilfield, if you will.

Efficiency, of course, means making things cost less. Cost comes in two varieties: Capital and labor. So which one is being cut?

In the case of software programs for running oilfield operations, the answer is theoretically both. Service providers will need fewer trucks to do more jobs, which could mean fewer truck drivers, not to mention fewer administrative staff shuffling paper tickets. A few weeks ago, the New York Times looked at how technology was muting oilfield job growth even as drilling returned, which my colleague Jordan Blum had done back in December.

As always, however, the correlation between automation and payroll isn't perfect. A company that lowers its cost of doing business may be better positioned to expand faster than its competitors, and ultimately hire more people than it would have with its old labor-intensive methods.

That's what Dee Atkin, CEO of a digital dispatching platform called OmniSolutions, thinks many of his customers have done after cutting back on paper.

"For the back office process, it reduces personnel requirements significantly," says Atkin, who is based in Utah and has been most active in the Bakken shale of North Dakota. He says one company he worked with had 11 people doing dispatching and invoicing, and was able to redeploy most of them to other functions, like customer service.

"I haven't seen anybody actually laid off," Atkin says. "Our goal with Omni Dispatch is to remove the mundane and release the human to do the creative."

Increasingly, companies are being founded with technology already baked into their operations. One of Omnisolutions' customers, Purity Oilfield Services, started up in 2012. The company never had a huge paper-shuffling operation, having digitized its record-keeping from the beginning. That efficiency allowed Purity to avoid layoffs through the downturn, and it has since focused on diversifying into new business lines which is easier to do with the help of a software program that knits them all together.

That's the optimistic vision of how automation can actually help employment: Robotics and artificial intelligence amplify human efforts, allowing newly competitive businesses to hire more people in new roles. For example, manufacturers have been able to build incredibly advanced factories in America that compete on a cost basis with Chinese production. They employ a fraction of the workers they used to, but still more than they would if the factory didn't exist.

More broadly, some research has found that automation often glibly referred to as "robots" has little impact on aggregate employment, while decreasing slightly the share of low and middle-skilled jobs.

Of course, the decision of whether to reinvest the earnings from higher productivity into new job opportunities is up to each company's leadership. They might just decide to put their profits into a bigger house, or bigger investor dividends.

And today's technological advances may pale in comparison to the ones coming down the road, like trucks that drive themselves. When that happens, businesses may not be able to expand fast enough to replace jobs that are lost.

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Oilfield automation may slow job growth but it doesn't have to ... - Chron.com

A senior director for Virgin Australia has warned business leaders that the current rush to automate labour with robots and artificial intelligence is likely to engender pushback from an increasingly alienated and disregarded services sector workforce.

Virgin Australia chairwoman Elizabeth Bryan, speaking at the Australian Institute of Company Directors governance summit in Melbourne, acknowledged that service sector jobs representing the biggest employment demographic in Australia are now losing their immunity from globalisation and automation, but that companies embracing the prospect have hard political and social roadblocks ahead.

[Dont] think for a moment, Bryan commented. that boards will be able to drive waves of mass reduction in employment without very serious pushback.

Bryan additionally warned that the race towards automation is threatening university-educated workers in white collar positions, commenting This means that education will not necessarily offer effective protection against job automation in the future,

The comments appear to be elliptically aimed at higher political bodies than the business community, and its a topic that has engaged governments increasingly over the past year

In February Dallas Mavericks owner Mark Cuban questioned the validity of Donald Trumps isolationist economics in the face of employment threats which are not coming from overseas, but from research and manufacturing at home and abroad.

Mavericks told CNBC Im willing to bet that these companies building new plantsthis will lead to fewer people being employed, and predicted that people arent going to have jobs.

Tesla CEO Elon Musk, one of a small handful of world leaders in the development of autonomous vehicles, also acknowledged that month the potential societal and economic disruption of his own field of research: [There] are many people whose jobs are to drive. In fact I think it might be the single largest employer of peopleDriving in various forms. So we need to figure out new roles for what do those people do, but it will be very disruptive and very quick.

Former Microsoft CEO and owner Bill Gates suggested in February that robots be taxed in the same way as humans, opining If a human worker does $50,000 of work in a factory, that income is taxed,

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Virgin boss warns industry of pending automation backlash - The Stack

P.K. Agarwals oped (Opinion, Feb. 28) on the disruption of jobs with new technology (e.g. self-driving vehicles) is likely well-meaning and informative, but shows a core problem that has now dramatically become front and center. The election showed that large numbers of Americans are worried about their futures. Automation eliminates jobs, disrupts careers, and can ruin lives for those who are unprepared for it. It also improves quality, reduces costs, improves safety, uses less resources, and many other benefits.

If there is one thing Silicon Valley can learn from the last few years, simply treating technology and automation as unicorns and rainbows and ignoring its social disruptions has stoked a backlash that will only grow as automation spreads. It will not dissipate until the social costs are addressed on an equal level, and not just by suggesting online classes, as Agarwal writes offhandedly, but by specific programs that reach the millions of displaced workers. It is in Silicon Valleys deepest interest to address these issues proactively.

Michael Klein Palo Alto

Republicans say they want to reduce health insurance costs by allowing insurance companies to sell across state lines. There is not a state in the country that bars an insurance company from selling within it if the company is in good standing, has a presence in the state and thus falls under the consumer protection laws of that state. By allowing companies to sell across state lines Republicans want to allow insurance companies to locate their headquarters where consumer protections are lax. There is evidence this may already be happening. If you have a problem with an insurance company denying a claim or refusing to pay, you have to go to the state where the headquarters is located rather than your states Insurance Commissioner. Ask a Republican if they will require the insurance company who sells across state lines to be under the consumer protection laws of the state where the policy holder resides. I have and was greeted with silence.

HarveyJohnson San Jose

President Trumps speech and the Democratic response, thanks to the advent of television and social media, is nothing more than pure theater, a stage for meaningless political rhetoric. Nothing was said that he hasnt said before. Goals were set that wont be reached, and promises were made that will not be kept. It makes no difference who or which political party is in power, very little happens for the greater good. Our polarized dysfunctional political system wont allow any meaningful accomplishments.

Joseph Rizzuto Los Gatos

So, what if Hillary Clinton had also won the Electoral College vote and, in the first week of her administration, before all of her team was in place, she green lighted a risky raid on Yemen over a dinner table, not in the Situation Room, did not observe the raid from the Situation Room, apparently tweeted about a TV program during a raid that resulted in Yemeni civilian deaths, the loss of an MV-22 Osprey aircraft and the death of a Navy Seal, whose father, Bill Owens, did not want to meet with the president while at Dover Base to receive the body of his son. Would the Republicans be shouting lock her up? And would the Republican Congress be convening a committee to investigate Benghazi II?

Bob Davis San Jose

Commander-in Chief Donald Trump wants to spend more than half (54 percent) of our budget on the military (Page 1A, Feb. 28). He must have forgot that the United States already spends more money on defense than the next 10 nations combined. With Russia as a friendly ally, we would have hoped the defense budget might have gone down not up. Unfortunately, Trump missed some early training when he resisted military service five times as a young man. One hopes his bellicose attitude doesnt lead us into an unnecessary war.

Stan Fitzgerald San Jose

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March 2 Letters: Silicon Valley must address automation issues - The Mercury News