By Kevin Meyer
Another day, another company forgetting that there's a value-adding brain attached to the pair of hands that supposedly costs so much. The difference this time is that the company is in China.
Taiwanese technology giant Foxconn will replace some of its workers with 1 million robots in three years to cut rising labor expenses and improve efficiency, said Terry Gou, founder and chairman of the company, late Friday.
Foxconn, the world's largest maker of computer components which assembles products for Apple, Sony and Nokia, is in the spotlight after a string of suicides of workers at its massive Chinese plants, which some blamed on tough working conditions.
The company currently employs 1.2 million people, with about 1 million of them based on the Chinese mainland.
Now perhaps you can understand but not forgive this particular company for not understanding the power of creativity and experience generating improvement ideas. That would require some minimal level of respect for people, the second pillar of lean, in the first place. When company employees have a habit of jumping off of tall buildings that respect probably doesn't exist.
Over the past several years we've told you about many companies in supposedly "high cost" areas like the U.S. and Japan that can out-compete "low labor cost" rivals not with robotics but with ideas.
When was the last time you saw a robot submit an improvement idea?
Andrej says
well, rest will be able to come with improvement ideas :)
Jim Fernandez says
It may be the “rising labor expenses” that the company is trying to reduce are not simply wage related. They may be related to other things including the cost of suicides and union issues. And in fact this press release could be directly related to labor negotiations.
By the way, how many robots do Toyota manufacturing plants have?
Kevin says
Toyota uses very few robots – often only in dangerous or human-impossible tasks. Here’s one description of their Kyushu operations:
http://www.leanceo.com/articles/toyota-kyushu-manufacturing-ballet
George says
Heck the company I work for doesn’t have any robots and improvement ideas are only submitted by about 3% of the 150 people workforce. Maybe we could get away with a few robots. Kinda hard to do that in a construction company, though. :-)
Louis Renault says
Back in the early part of the last decade I was involved in the decision by my then-employer to transform a major business unit’s final assembly process from manual to automated. We employed 22 people over 2 shifts in this department which produced about 6,000 units per 16 hour day. After automating the processes we employed 15 people over 3 shifts and produced 15,000 units per 24 hour day,(And yes, we had the demand for the 15K/day, which is why we made the transition in the first place). The 7 people taken out of this process were moved into other positions in the company, including another product assembly process that we were able to take on because of our available skilled manpower. So, tell me again why automation is bad?
Dave says
Anyone have any more info on this story? Sounds implausible – I think total annual production of industrial robots is less than 100K/yr
Perhaps every pneumatic slide will be called a robot?
Bill Waddell says
I’m with you Dave. The story says they have 1.2 million employees. Even if they were all replaced that is almost a one for one swap of a Chinese wage rate person for a robot – where’s the sense in that?
Maybe Terry Gau lied. Maybe the reporter screwed up the story. Given that Gau and reporters have virtually zero credibility, neither would surprise me.
Mark Graban says
An excerpt from Bob Lutz’s new book that shows the folly of GM’s old push for automation and robotics:
“The scheme was to overwhelm the U.S. (and Japanese) competition with unprecedented capital expenditures that financially constrained Ford and Chrysler couldn’t match. The vision was for workerless plants, operating in the dark, three shifts daily, reproducing parts and subassemblies at ultralow labor cost and with high repeatability and, thus, quality.
It didn’t turn out that way. The robotics were far from perfect, and most people recall the embarrassment of GM’s paint-shop robots playfully painting each other.
Most disappointing of all was the reality that, after all this, labor costs actually went up. Sure, the so-called direct labor (people actually making parts or assemblies) went down, and that’s what all the measurements focused on. But indirect labor—the highly skilled, specially trained repair and maintenance crews—expanded exponentially.
The result was a huge rise in GM’s manufacturing cost: Paying for the displaced labor and more hours for the costly indirect labor, coupled with the depreciation and amortization of all that new equipment, made GM the high-cost producer, showing once again that having too much money can result in amazing folly.”
Louis Renault says
Mark–but isn’t most automotive painting and welding performed by robots now at GM and everywhere else? Back in “the day” new employees got stuck on the paint line, which was the definition of Dirty, Dangerous, and Demanding. Now this has been pretty much fully automated. Should we go back to the way it was “just because?”