China’s rush to automate manufacturing stems from two trends. Firstly, the country’s working-age population is shrinking, leading to rising labor costs. One way China’s factories can cope up with this squeeze is to rely less on workers. Secondly, a lot of work being done by these robots has reduced the risk of mistakes and has become an efficient source of carrying/sifting through products and packages.
According to the annual report of Statistical Bureau of China, in terms of output growth, industrial robots beat all other categories, with the 72,000-plus sets produced marking a 30.4% annual increase from 2015.
Shentong Express, one of China’s largest courier firm, showed off an automated warehouse last week that reportedly cut its labor costs by half, according to the South China Morning Post. In a video, tiny orange robots, developed by Chinese digital technology company HIKVISION, are seen ferrying packages around an eastern China warehouse, taking each parcel from a human worker, driving under a scanner and then dumping the package down a specific chute for it to be shipped.
These miniature real-life ‘Umpa Lumpas’, each just 7.5 inches, follow a set route and transport parcels from the assembly line to the departure gates where they are then dispatched. These tiny machines can work non-stop for eight hours after being fully charged and have practically eliminated mistakes at the warehouse. This orange machine began working at Shentong Express China in November last year at its two warehouses.
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In Shentong Express’s warehouse in Linyi, Shandong province, 300 little orange robots can get through 20,000 parcels an hour. The self-charging workers have saved the company, which has 300,000 employees, a staggering 70 per cent of manpower. The robots can identify the destination of a parcel through a code scan, thereby practically eliminating mistakes. Once fully charged, they can work eight hours flat. They claim that the robot can do a 5-hour human sorting in 3 hours due to their efficient design of algorithm.
Chinese manufacturers have been increasingly replacing human workers with machines. The output of industrial robots grew 30.4 percent last year, reports CNBC. Apple’s supplier Foxconn last year replaced 60,000 factory workers with robots, according to a Chinese government official in Kunshan, eastern Jiangsu province.
The International Bar Association, a global organization for lawyers, claimed in a report that the technological revolution will destroy the workplace as we know it. It is predicted that machines are expected to replace 250,000 civil servants to save taxpayers billions by 2030.
Despite this rapid growth, China’s robotics industry has yet to catch up to the best overseas companies. Most of the industrial robots that China produces are relatively simple compared to the machines made by well-known foreign companies like Japan’s Fanuc or Switzerland’s ABB. About 69% of the industrial robots that Chinese factories purchase for themselves come from abroad and most robots made in China rely heavily on imported foreign components.
This gap could ultimately lead to more acquisitions of foreign companies. Last year Chinese appliance maker Midea paid about $5 billion for Kuka, Germany’s century-old maker of manufacturing equipment and a leader in industrial robotics. Months after that, Zhejiang Wanfeng Technology Development, a subsidiary of a Chinese car parts supplier, purchased US-based Paslin, a robotics maker focused on the automotive industry, for about $300 million.
If China’s robot makers can’t match the quality of their rivals in the coming years, buying them might be just as efficient.