From SCDigest's On-Target E-Magazine
- June 23, 2015 -
Supply Chain News: Will China be Ground Zero for Social Tension over Growing Use of Factory Robots?
Chinese Manufacturers Rush to Automate, with One Factory Replacing 90% of 1800 Workers with Robots
SCDigest Editorial Staff
When thinking of China, the perception is often of vast waves of low cost factory workers, churning our Apple iPhones or pairs of blue jeans by the tens of millions.
While that may have been true for the past couple of decades, the landscape is changing rapidly, as Chinese factories race to install robots to maintain competitiveness in the face of rising labor rates and a strategy to move to higher levels of quality in other product sectors.
SCDigest Says: |
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"China could well turn out to be ground zero for the economic and social disruption brought on by the rise of the robots," Martin writes. |
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The days of 200,000 workers toiling away at a Foxconn factory making products for Apple may soon be long gone - and the impact of this rapid evolution on China's social fabric a big unknown.
Factory wages in China have quintupled in the past decade, to about $500 per year - yet workers are often still hard to find.
Chinese businesses and the government are responding by designing and installing large numbers of robots, with the goal of keeping factories running and expanding without necessarily causing a drop in overall employment - though this last point remains a wild card.
There is actually an official government project called "replacing humans with robots." We're not sure how well that initiative would go over in the US or most of Europe, even if it's happening at a similar pace without the official government backing.
In 2014, Chinese factories accounted for about a quarter of the global ranks of industrial robots - a 54% increase over 2013. According to the International Federation of Robotics, China will have more installed manufacturing robots than any other country by 2017.
There are lots of anecdotal stories to support that view that China is transitioning to robots.
Chinese appliance maker Midea, for example, plans to replace 6,000 workers in its residential air-conditioning division - nearly 20% fifth of its work force - with automation by the end of the year. The aforementioned contract manufacturing giant Foxconn plans to automate about 70% of factory work within three years, and already has a nearly fully robotic factory in Chengdu.
In May, Shenzhen Evenwin Precision Technology Company started work on a new factory that will be run almost entirely with use of about 1000 robots. Those robots will replace 90% of the 1800 workers currently at a nearby factory, reducing employment there to just 200 needed to operate the new automated plant.
This, it appears, is simply the future of manufacturing, for better or worse, and the new reality may surprisingly be first achieved in still relatively low labor cost China.
The South China Morning Post reports that since September, a total of 505 factories across Dongguan - the city where the new automated Shenzhen Evenwin is being built - have invested 4.2 billion yuan in robots, aiming to replace more than 30,000 workers, according to the Dongguan Economy and Information Technology Bureau.
(Manufacturing Article Continued Below)
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