IBM Walks a Fine Line With Chinese Technical Alliance
April 16, 201545 US Companies Win E-Awards
April 16, 2015A recent newspaper article chronicled the increased use of robotics in Chinese factories. If accurate, the insertion of robots into Chinese assembly work is occurring at a much lower hourly wage rate than would generally be considered ripe for investment in a US factory. One of the reasons discussed for the displacement of human workers is a drive to reduce dependence on migratory labor. Reducing reliance on migratory labor can stabilize resource availability, which might help justify the higher cost.
There are a number of implications of this trend for the purchaser and for the competing American factory. Robotic stations tend to pace production lines where they paired with human counterparts, as Lucille Ball most clearly demonstrated in this skit: https://www.youtube.com/watch?v=8NPzLBSBzPI. Adding robots thus helps stabilize output levels. This is in addition to their ability to handle difficult or repetitve tasks, which can cause injuries and remove experienced workers from the labor pool. This also helps stabilize the flow of goods from Chinese suppliers, which is good for purchasers. Robots work multiple shifts and overtime, which adds to the output flexibility of Chinese factories, a frequent concern when sourcing from overseas. The remaining question is the price to be paid for this added flexibility and consistency.
Goods that are assembled by robots in China. . . can be assembled by robots anywhere, and the higher the robotic assembly input, the lower the labor cost advantage to manufacturing or assembling US-destined goods in China. This does not equate the supply chains of US vs. Chinese manufacturers, but it does address the labor cost differential which has been a major driver in the offshoring of production. As more goods are designed to take advantage of robotic assembly methods, the opportunity to produce closer to the US market grows.