TOKYO -- Canon aims to completely automate domestic manufacturing of digital cameras by 2018, an advance that the company reckons can cut production costs 10-20%.
Machines will replace humans on assembly lines churning out everything from lens components to finished cameras at four plants in Japan. Canon expects this to reduce assembly costs by at least half.
To develop the necessary automation technology, the company will spend roughly 13 billion yen ($104 million) to build a laboratory on the grounds of an Oita Prefecture factory that makes parts for single-lens reflex cameras, aiming to start up the lab at the end of next year. Some 500 engineers will work on inventing machines to take over for assembly line veterans. Canon plans to find other uses for the displaced workers.
Full automation has proved elusive for manufacturers of precision equipment. Canon removed the human element from the production of key lens components in 2013 but still needs skilled hands for difficult tasks, such as assembling delicate electrical components and cameras' model-dependent outer casings.
Digital cameras remain a big business for the company, providing an estimated 800 billion yen, or one-fifth, of total sales. Canon leads the global market with a roughly 30% share. But the market is shrinking and price competition intense. Cutting costs is proving a major challenge in maintaining domestic production.
A weak yen is providing a tailwind for Japanese manufacturers that export high-value-added products from domestic factories. Automation could help Canon hone its export-competitiveness further. The company plans to increase domestic production from 60% of its total output to 70%.
Canon's pursuit of automation also represents an attempt to find a new paradigm for domestic workhouse factories. Its digital camera plants in China and Taiwan, like those in Japan, face the problems of a shrinking labor pool and rising personnel costs. Canon seeks a manufacturing network flexible enough to cope with headwinds like exchange rates and wages.
Other Japanese companies are also trying to reduce their need for human workers. Mitsubishi Heavy Industries will build an automated production line for fuselage sections for next-generation Boeing jumbo jets, aiming to cut production costs 15% or so while maintaining quality. Mitsui Engineering & Shipbuilding plans to spend 15 billion yen over five years to install robots and other labor-saving equipment in hopes of raising production efficiency by 30%. Robots are also growing more widespread in other labor-intensive industries, such as food processing.