Robotic labor: the future of manufacturing in China?
July 15, 2013
Yaskawa Electric Corporation, a Japanese manufacturer of industrial robots, recently announced its plans to build the world’s largest robot manufacturing plant in Changzhou located in the Jiansu Province of China.
Only a couple decades ago, robots existed only in sci-fi movies and our imaginations. Today, companies like Yaskawa manufacture thousands of robots every year with real, practical uses. It makes you wonder where robotic development is headed and how it will affect our everyday lives in the future.
Yaskawa Electric Corporation
Yaskawa Electric Corporation was established in 1915, but did not begin manufacturing robots until the 1970s. The company released the first all-electric robot in Japan in 1977 and although its sales did not boom from the get-go, its influence on the robotics and manufacturing industry is undeniable. The only function of Yaskawa’s first robot, the Motoman, was arc welding. Now the international leader in the industrial robot industry, Yaskawa produces over 1,000 units every month and its products’ applications cover a wide array of jobs in many different industrial fields.
Yaskawa’s factory in Changzhou will be the company’s first overseas robot factory with the total investment costing about RMB 300 million or $48 million. (China Knowledge) The company primarily plans to produce robots related to auto-manufacturing at the new plant (welding, painting, materials handling) and expects the factory’s monthly output capacity to reach 1000 robots by 2015, nearly doubling Yaskawa’s total output capacity. Yaskawa is not the first company in the robot manufacturing industry to set up shop in China. Japan-based Nachi-Fujikoshi Corporation began production in Zhangjiagang in February and German-based Kuka plans to open a plant in Shanghai. So why are all of these companies moving their facilities to China? The answer lies in the continually changing Chinese sourcing industry.
Effect of robotics on Chinese manufacturing industry
Due to rapidly growing labor costs and increasing demand for labor, China is expected to become the world’s largest industrial robots market. China currently holds the fastest growing demand in the world for industrial robots and Chinese migrant workers’ wages are projected to rise 10% or more a year. (The Asahi Shimbun) As a result, more and more automotive and electronic parts factories are replacing workers with industrial robots. Some estimates expect roughly 35,000 industrial robots to be installed in the country by 2015, more than any other country in the world. (The Asahi Shimbun)
Some may think that the increase in labor costs may make Chinese sourcing too expensive forcing many companies to remove their plants from the country, but robot labor may prevent this from happening anytime soon. Due to increasing domestic demand for products in China and continuing development of robot technology, sourcing in China should remain strong. Chinese domestic demand is growing at 8-10 percent a year as the Chinese economy continues to grow. (CNBC) Although labor costs in factories are increasing every year, this increased domestic demand will allow companies to sell their products within China and eliminate the transportation costs necessary to import it back to their respective countries. Rather than shutting factories down, companies are more likely to retool their plants to meet this domestic demand instead of those of Western consumers. Additionally, companies may think about moving their plants to inner or Western China where labor costs are much lower than major metropolitan areas such as Beijing and Shanghai.
So what is the role of robots in helping companies sustainably maintain their operations in China? Robot technology is constantly evolving and more companies are realizing that by implementing robotic labor instead of human labor, they can improve efficiency and product quality. Robot manufacturers are trying to improve robot motion technology while also reducing power consumption in order to produce a cheaper and more precise industrial robot. Robot motion control is becoming smoother and more flexible and manufacturers are developing sensors that control complex movement and apparatus at the micro and nano levels to increase the precision of the robots.
Although companies may worry about the constantly increasing cost of labor in China, the future for the Chinese manufacturing industry is bright with the introduction of more and more industrial robots. The days of quality control issues in the sourcing industry may soon become an afterthought as companies like Yaskawa improve their technology and implement their products into plants throughout China.