Is manufacturing’s race to the bottom now coming to an end?
08 August 2011
Foxconn plans to vastly increase the number of robots in the company’s plants to reduce labour costs. The company currently has around 10,000 robots in its manufacturing plants, and intends to increase this number to 300,000 by next year and over a million by 2014. It has been a bad news year for Foxconn. Firstly the company were forced to raise workers’ salaries 20% across the board, as well as invite independent experts to advise on working practises in response to several worker suicides.
Then an explosion in one plant caused a delay in the delivery of iPads in the critical launch period. Replacing workers with robots can obviously alleviate the problem of working conditions, and with rises in wages could prove economical in the long run.
The latest generation of robots such as FRIDA are safe, small enough to be portable, comparatively inexpensive and agile. These benefits open up the use of robots into many more possible applications than previously possible.
Foxconn’s spin on the move is that it wants to move workers higher up the value chain from routine tasks to value added positions such as R&D and innovation. How Foxconn plans to turn the people doing the most repetitive manual jobs into scientists and technicians it didn’t explain in the statement.
It looks like Foxconn is admitting it is no longer economical to scour the world looking for politically stable countries with even cheaper labour to take its production facilities. In the short and medium term Foxconn should be comfortable remaining in China with its current facilities. But with the bulk of its labour costs taken out the equation, combined with high fuel costs throughout the world, maybe in the long term it would make sense to move manufacturing facilities closer to the end user? A move like this would also remove the cost of import duties, further reducing costs.
Maybe it is just wishful thinking, but it would be great to see some high volume manufacturing coming back from the Far East. Could it make a real long-term difference to the industry? Will the cheaper, more flexible robots that will be used in manufacturing create an opportunity for the original design companies to restart manufacturing instead of contracting? Let me know what you think on Twitter (@EMTEditorial), or email: alistair.winning@imlgroup.co.uk.
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