These days, almost everyone is on a quest for the perfect balance between manual labor and automation. "How much does automation improve a farm's bottom line?" "What is the optimum mix of automation and manual labor?" are some of the most recurring questions.

"The short version of my response to these questions and others like them is never a surprise, but it's almost always a disappointment: There's not a right answer to these questions," says Joe Swartz from AmHydro.

With that disclaimer out of the way, there's some valuable information that can set you up for success.

A Question of Workflow
When discussing automatic technology vs. old-fashioned manual labor in CEA, what we're really talking about is our workflow. Anytime a plant needs to be moved, or a flow needs to be adjusted, the effort needed to make that happen is a part of your overall workflow. Optimizing your workflow is crucial and something that needs to be planned from beginning to end in advance.

"So, from the very start, your decisions should not be made simply on the basis of desiring a manual farm or a tech-driven farm. There are degrees to this. What's more, a farm is full of moving parts, and decisions about manual vs. automation will need to be made on a case-by-case basis," he points out.

Tricky Tradeoffs
When making these decisions, there are always pros and cons. It's important to be clear-eyed about both.

In general, automation can reduce your labor/operating costs. But manual work can greatly reduce your capital and startup costs.

"It's not entirely that simple, though," he adds. "Having workers manually carry channels around a farm is extremely tried-and-true. There are predictable labor costs. There is also potential for workplace injury from repetitive motion and tripping while carrying large objects. There are also food safety concerns – every time a plant is touched, there is a small risk of contamination or damage. Manually carrying plants and channels also becomes more logistically challenging at larger scales."

On the other hand, machine or automatic transportation can cost much more upfront, while improving efficiency and speed, and keeping costs lower over time. "There is also the potential for machines to break, which can cause unforeseen costs and a loss of productivity. And if you have machines moving through areas where people are working, this can also cause safety concerns of a different nature. There are tradeoffs. Cost-benefit analysis is needed."

As a case study: AmHydro "Crop Turn Technology" utilizes a unique 3-stage growing process that adds our proprietary "Nursery Channel." An easy criticism of our 3 stage process is that it increases time and labor demands by adding an additional transplanting step.

"We calculate that the additional step, in a 30' by 96' greenhouse, adds an additional 1.5-2 hours of labor per week, which costs operators anywhere from $40-$60 per week. But that investment results in substantial productivity increases. Spending $60 in labor to utilize Crop Turn Technology can increase weekly revenue by $1,500," he remarks. "I think the benefits in that example lead to an obvious choice. But that's not going to be the case all the time. Your own goals and resources can impact your choices too."

He further elaborates on that with a couple of examples:

  • An operator with low initial funding will be limited in the amount of tech they can afford. This doesn't necessarily consign them to failure, but it creates a parameter they'll need to work within.
  • An operator who feels strongly about bringing good jobs to their community may develop a business model with low levels of automation, even if the resulting business model is not as technologically advanced as it could be.

The takeaway according to Joe is that the important thing is to perform a full analysis, not just decide based on any single factor.

Where is all the data?
If analysis matters so much to this industry, then it's legit to ask where the data is. "How can we make decisions for a new operation if we don't have any visibility on industry standards?"

Every operation is pursuing a competitive advantage – the thing that will allow them to grow better quality, faster, etc. That advantage is developed with internal data; proven to stakeholders via returns. Because of the competitiveness of the marketplace, there's no incentive to share. "Even when data is shared, there's often a lack of credulity."

"There are people speaking up and trying to change this dynamic of our industry, but in the meantime, it's important for every operator to know how to do their own analysis."

How does one do this, asks Joe. "You start with the information you have available. How much capital can you access? What are labor costs in your area? How much are you going to be able to sell your products for, and how many will you grow per week?"

"Ultimately, what I encourage is research and experimentation. Continuously test things on a small scale and measure your results.
So you don't have access to swathes or reliable industry data. That's okay, no one else does either. You can still succeed."

"In one sense, there's not a universal answer to the question of automatic optimization, but in another sense, there is. The right answer is the one you decide on only after deep analysis. What's more, the skills you develop by learning to perform that type of analysis will become a part of your own competitive edge that ultimately allows you to succeed."

For more information:
Joe Schwartz, Vice President
AmHydro
joe@AmHydro.com
www.amhydro.com