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March 05, 2013

Half of Americas largest companies are bringing manufacturing back from China and China is quickly moving to Robotic manufacturing

The advent of truly sophisticated and relatively cheap industrial robotics and automation technology is beginning to change the global economic landscape.

Nextbigfuture covered a 60 Minutes segment which looked at the jobless recovery and the replacement of workers with automation and robotics.

Nextbigfuture looked at distribution warehouse automation which are several times more efficient and productive than older warehouses.

A little over two years ago Terry Gou the CEO of Foxconn announced that over the next three years his company was going to begin phasing in up to 3 million industrial robots with an eye towards increasing efficiency and reducing labor costs. This announcement, from the world's largest electronics contract manufacturer, sent waves through the media and business community. Foxconn employs over 1.5 million people in China, in hundreds of plants and facilities, scattered around the country.

Foxconn has managed to deploy significant numbers of its new robotic workers. Over the course of last year, Foxconn managed to install 30,000-50,000 new robots in its factories, and is aiming for 300,000 more by 2014.

In 2011, Foxconn was targeting 1 million robots by 2014, so Foxconn's schedule has slipped.

What is astounding about this information is the impact it already has had. According to Liu Kun, a spokesman for Foxconn, "We have canceled hiring entry level workers, a decision that is partly associated with our efforts in production automation." Moreover according to the International Federation of Robotics the growth of industrial robotics in China has been exceeding 40% to 50% a year, an unprecedented level of growth. The question that springs to mind is: What would happen if Foxconn actually had 3 million robots?



Driven by changing economic realities in China, American industries are looking toward the boon provided by new technologies to "reshore" back to the United States. Breakneck advancements in 3D printing, artificial intelligence, robotics, and industrial automation are bringing us close to a factory floor that is more sophisticated and advanced than ever before.

According to the McKinsey Global Institute, the cost of advanced robots has fallen by almost 50% since the early 1990s, and seems set to continue falling. This startling fact is being put on dazzling display by companies like Rethink Robotics. The company is perhaps one of the most famous in the field of robotics in the world today due to their development of Baxter, the US$22,000 industrial robot.

The results are already starting to become measurable. According to the Manufacturers Alliance for Productivity and Innovation, a trade group of American manufacturing executives, 17% of companies with production overseas had brought back some of that work to the United States since 2011. This is underscored by a Boston Consulting Group survey which covered 106 companies worth $1 billion or more and with manufacturing overseas. Some 37% were considering bringing production back to the United States, a percentage that rose to almost half, when companies over $10 billion were asked.


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