Robots and Software to Eliminate Labor

It seems we are on the verge of shifting manufacturing back from China. Labor cost won't matter anymore. A month ago I had a very interesting conversation with an owner of a factory in Germany. His factory is fully automated and the work is done by robots. One of the products they make are smart light bulbs for IKEA. He says his costs are lower compared to Chinese factories and quality is much higher (the failure rate of finished products is an order of magnitude lower).

On another note Elon Musk says he can increase the speed of the Tesla production line in Fremont, California, from the current five centimeters per second to one meter per second. Assuming 6 meters per car, it is 5 million cars per year, per a single production line.  Almost what all Ford factories globally could do in 2016 (6.5M).

It seems with robots and automated assembly lines, there is no more issue of labor costs and scale.

For some products (such as our own smart lighting), manufacturing is one component. The other one is commissioning. Legacy smart lighting systems may be very tedious and expensive to commission. They simply require many hours of on site services by highly skilled technicians. The cost of installation can easily be today a multiple of the cost of products. And while shaving cents from a product BOM may be difficult, shaving dollars from the commissioning labor costs is probably the lowest hanging fruit that a piece of software coupled with sensors can reach for.

Self configuring and self optimizing IoT networks is a great concept and a great promise. It is also a great opportunity for truly breakthrough products. If IoT is to come by billions of devices, the networks have to build and optimize themselves. Having human labor in there is not an option.