OM in the News: Foxconn Replaces 60,000 Humans with Robots in China
Apple supplier Foxconn Technology has replaced 60,000 human workers with robots in a single factory, reports the South China Morning Post (May 22, 2016). This is part of a massive reduction in headcount across China’s entire Kunshan region. Foxconn has been automating its manufacturing facilities throughout China, including Kunshan, for “many years,” which it says has freed up its employees to focus on higher value-added elements of the manufacturing process, such as R&D, process control and quality control. The job cuts do not augur well for Kunshan, which has a population of 2.5 million.
”Across all of our facilities today, we are applying robotics engineering to replace repetitive tasks previously done by employees,” Foxconn said. “As our manufacturing processes and the products we produce become more technologically advanced, automation is playing an increasingly important role in our operations and we have plans to automate more of our manufacturing operations over the coming years.”
Roughly 600 companies in the Kunshan region are looking to reduce headcount with robots, as part of an effort to accelerate growth and reduce costs. While developing robotics does present higher upfront costs, machines are more predictable, stable, and cheaper over the long term versus humans. With such high pressures placed on these manufacturers, which assemble much of the world’s consumer technology products and are often under strict deadlines, it also alleviates some of the ethical issues that arise when working people too hard for too long to meet demand. Foxconn has been criticized for years for inadequate working conditions, which led to a string of suicides at its manufacturing facilities a few years ago. Foxconn employees have complained of being overworked, sleeping in less-than-ideal dormitory conditions, and not being paid fairly.
There are, by the way, currently more than 260,000 robots working in U.S. factories.
Classroom discussion questions:
- How will Foxconn’s strategy impact U.S. manufacturers?
- How will this decision impact China?