Automation and the arrival of 290,000 robots

A classic example here of the potential (good and bad) for automation in a large-scale business. Foxconn, a manufacturer well-known to students and teachers who have researched Apple inc and CSR, is aiming to increase the number of robots used in its production processes from 10,000 currently to around 300,000. As a result, it wants to move “1,000,000 workers up the value chain” - i.e. provide them with work which is less suitable for automation.

Foxconn is a great example of economies of scale - the sheer size of their operations in China is stunning. Foxconn makes electronic products for many global brands, including the iPhone and the iPad. It is the largest exporter in Greater China and the second largest exporter in the Czech Republic. However, despite its scale, Foxconn is still under pressure to minimise unit costs in order to maintain profitability. Recently it has begun relocating factories to lower-cost locations in China.

You might think that Foxconn’s automation strategy might be implemented over the medium-term. Apparently not! The 300,000 production robots are expected to be in place by the end of 2012. A massive transformation in Foxconn’s operations.