Automation is the buzz word in several of our articles and its trending across manufacturing industries. For instance China taking several measures to cope with increasing labor issues, they are modernizing their factories and inching towards complete automation.
Midea plans to invest 800 million-1 billion yuan (US$129-$161 million) in automation projects this year, to be followed by investment of 5 billion yuan (US$806 million) over the next five years, a far cry from the 1 billion yuan (US$161 million) put towards automation investment from 2012-2014, said Wu Shoubao, vice president in charge of the company’s air-conditioner department, according to Shanghai’s China Business News.
Wu added that Midea will install 600 six-axis robots in 2015, joining the 800 which were put into operation at the end of 2014.
Galanz, following its investment of 3 billion yuan (US$484 million) towards the automation of its microwave factory in Zhongshan last year, will install automated production lines at its washing machine factory. Homa will bring its new highly automated refrigerator factory online in July. Haier already has four internet-based automated factories in operation and TCL plans to automate its manufacturing of televisions and mobile phones.
Thanks to the robotic help, the workforce at Midea’s air conditioner factory in Foshan will drop to 900 this year, down from last year’s 1,500. This number will be halved again over the next three years, factory manager Chen Jiansheng told China Business News. The jobs cuts, however, will pose a major challenge to the company’s internal control, according to Wu.
Midea’s air conditioner department has formulated a roadmap for the automation of its production, and plans to cut the number of workers at peak season to from this year’s 26,000, to 24,000 by 2016, 22,000 by 2017, and less than 20,000 by 2018, when the company’s output value for air conditioners will top 100 billion yuan, compared with 2014’s 70 billion yuan (US$11.3 billion), according to the report.
Fang Hong, Midea chairman, reported that the company aims to boost its revenue to 200 billion yuan (US$32 billion) over the next several years, up from 140 billion (US$22.5 billion) in 2014, while at the same time reducing its workforce to less than 100,000, from 2014’s 120,000, via automating its workforce.
Wu attributed the mad rush to mechanize China’s labor force to a maturity in robotics technology, which lead to the birth of robots capable of sophisticated operations, and a reduction in prices. A robotic arm now costs anywhere from 130,000-150,000 yuan (US$21,000-$24,000) after adding the maintenance costs. Assuming the robot can be used for 10 years, it amounts to 15,000 yuan (US$2,400) a year, compared with the salary of one human worker a worker which reaches tens of thousands of yuan a year.
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