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Robots lift China’s factories to new heights : Can you eat your free lunch?

Ladies and Gentlemen, I give you evidence #1 that it is well nigh impossible to eat your free lunch. Now, I’m of the opinion that there is only 1 free lunch in the world : “Learning from the mistakes of others.” But just because there is such a free lunch, please don’t assume that you can even eat it.

Why did we outsource/offshore everything to China? Labor cost? Heck, the chinese think that the true cost of labor is still too expensive. By true cost, I mean not just the hourly pay. From the article: Robots lift China’s factories to new heights,

From car plants to microchip foundries, China’s industrial sector increasingly runs by machine.

According to Nomura, 28 percent of factory machines in China use numerical controls – one measure of automation. That may be far lower than Japan’s 83 percent, but China is growing far faster than Japan did at a comparable stage of development, says Ge Wenjie, a machinery analyst with Nomura.

The supposed reason is quite stunning as well,

"You don’t have to be an expert see the (quality) gap between Chinese cars and those made by companies like Audi and Volkswagen," said Li Shaohui, who oversees automatic control engineering for the company. "To beat those competitors we have no choice but to use a higher level of equipment and technology."

But you do sir, you do have to be an expert to know that the quality gap is not just the lack of high tech robots.

However, the whole game of international trade is coming full circle now – stunning in the sense that it took only about 15 odd years to rapidly industrialize (the benefit of the free lunch) to start feeling the need for advanced machinery and consultants from developed nations.

However, the lingering question is going to be whether they will just buy the robot because of its supposed supra-human like qualities or pause to chew on the mistakes of their forebears when they went the route of the robotic revolution.

Process, People, Process – Robots should go to management and join the other robots there…

Related posts:

  1. Why Apple makes iPhones in China and Why the US is screwed?
  2. “Let them eat cake…”
  3. Surviving the China Rip Tide – How to profit from the Supply Chain Bottleneck
  4. A free webinar: Role of outsourcing in reducing cost and Improving Process Efficiency
  5. Surviving the China Rip Tide – Recommendations??

Category: Lean, Personal Observations, Supply Chain Management, Theory of Constraints

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One Response

  1. Min Jae Kim says:

    Among several factors of increasing TCO when outsourcing to China, the increasing Chinese labor cost is one of the reasons. Therefore, robots in Chinese factories would be a great answer for it. They will not ask for a higher salary, get injured, or go on strike. However, in Chinese government perspective, they have to consider the lots of Chinese people who are working in the manufacturing industries. They will do something to deal with the unemployment in the near future. Therefore, in my opinion, outsourcing to China is not a perfect and permanent answer even though we see the trend of factory-automation in China.

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