I often hear discussions about how Chinese factories should become fully automated and I can’t help wonder why people would think that.
There is this misconception that if labor were to be replaced by machines the factory would become more efficient. Well, maybe this is true in certain areas where there are dangerous operations or parts are difficult to man-handle, but to automate an entire Chinese factory is in my honest opinion not the best way to make a factory more efficient.
The main problem, by far, with full automation in a Chinese factory is the lack of maintenance skills. A poorly maintained piece of equipment can have a detrimental effect on quality (by producing out of spec parts) and costs (when an entire batch has to be thrown away, when 1 operator has to keep watching each machine for fear of problems, when the machine is down...).
Another drawback with automation is that machines that replace the low-skill workers require highly skilled engineers to look after them, consequently the cost of automation is not just in the cost of the machines but also in the high skilled labor (if it can be found as I mentioned before).
One of the key attributes a lot of Chinese factories have is flexibility, they are able to take on multiple SKUs or product variations, and they can offer the client small batch runs during trial periods. With an automated factory, a lot of that flexibility goes away as the factory is now looking for larger batch quantities and stable product runs.
So what is the best solution to this factory automation conundrum? Well the answer is not that clear or easy; maybe the better question to ask is “how can a Chinese factory make employees more productive without getting them to work longer hours”?
This question is a little easier to answer and we have seen very good examples of this in a number of factories we have worked with.
By providing machines and equipment that provide semi-automated or user-assisted operations, the workers are able to carry out their job function a lot easier than before thus saving time on each operation.
Improving the layout of a production line so that parts required at each workstation are within reach of the operator so they do not have to spend time physically moving to get the parts they need.
Making sure parts are available when they are needed, if an operator is waiting for parts or has to go and find the parts before they can carry out their job, this is a lot of wasted time which is very inefficient.
With the implementation of some simple best practices, I would say more than 80% of Chinese factories can easily make a 20% reduction in variable costs by improving efficiency throughout the factory.
So going back to the original point of 'should Chinese factories become fully automated', I still say there is no need to make significant investment in robots and other automation machines where there are great benefits to be had just by reviewing the current situation and then implementing some basic changes.
Related resource: have a look at our infographic on this topic!