Factory Automation and Digitisation in MSMEs
Published on : Tuesday 09-01-2024
While implementing automation and digitisation, small industries must assess their specific needs, capabilities, and budget constraints, says Darshana Thakkar.
Large companies in India are very competitive due to modern production technologies. During the previous decade, the manufacturing advancements led by automation and digitisation have been crucial for many large firms to become a part of global value chains. With the rise of Industry 4.0, some forerunner companies are now transitioning their business to vertically integrating manufacturing systems and processes. They widely use emerging technologies like artificial intelligence, machine learning, big data analytics, cloud computing, IoT, and additive manufacturing. That uses real-time data for enhanced decision-making from shop floor to boardroom and increased competitiveness. With real-time data, they can optimise cost and manufacturing footprint.
Large companies are leading with better market shares, diversity, quality, precision, and resource efficiencies. These attributes allow them to align with global manufacturing shifts to achieve net-zero goals driven by international climate change commitments.
Yet, the country has a significant technology adoption gap among the MSMEs. Our country's lower manufacturing maturity is a legacy challenge and a lost economic opportunity. Still, in the post-pandemic era, there is a slight acceleration in technology adoption among the MSMEs. The tendency among the smaller companies when it comes to technology is that an overhaul of existing equipment with complex technologies to their operations can impact their bottom line negatively.
Being an MSME Transformation activist, my primary focus is to make our Indian MSMEs globally competitive and a part of the global value chain by adopting emerging technologies to assist their business operations. There are many constraints to MSMEs adopting affordable and optimal solutions. But the first and most significant challenge is awareness and willingness.
With the beginning of 2024, I appeal to all business leaders and business owners of MSMEs to make a resolution to transform their business processes by adopting emerging technologies. Many options exist to do so in a phased manner, but determination is crucial. The government also supports various schemes and helps MSMEs adopt technology.
Lack of such a vision critically affects the Indian government's ambition of #atmanirbharbharat and #viksitbharat@2047, especially the potential of the production-linked incentive scheme (PLI) to advance the country's manufacturing sector.
The scheme aims to reduce import dependencies of the 14 target sectors and boost competitive exports while generating employment.
Factory automation and digital transformation are the critical drivers for the success of Indian MSMEs in being competitive and becoming an integral part of the global supply chain.
Factory automation and digital transformation are related concepts but have different aspects regarding processes and systems.
Automation uses technology to perform tasks or processes without human intervention. It involves using machines, software and other tools to perform repetitive or complex tasks. Its applications include manufacturing, business processes, IT operations, and more. It can involve both physical and software-based automation.
IIoT, Robots, cobots, robotic process automation (RPA), automated machines in manufacturing, automated customer service systems, and self-checkout devices are examples of automation.
While digitisation involves converting information or processes into a digital format, it's the process of converting analog data, such as physical documents or manual processes, into digital form. It is often associated with documents, records and data.
A few examples: Scanning paper documents to create digital archives, converting physical records into electronic databases, and adopting electronic signatures for documents are examples of digitisation.
In summary, automation is about mechanising tasks and reducing human involvement in processes, while digitisation converts analog information into a digital format. Both concepts can complement each other, and their integration can lead to more sophisticated and efficient systems.
Factory automation and digitisation in MSMEs
Important factors and potential areas for factory Automation:
1. Identify Critical Processes:
• Analyse the production process and identify tasks that are repetitive, time-consuming, or prone to human error.
• Prioritise automation for processes that significantly impact production efficiency and product quality.
2. Invest in Flexible Automation Solutions:
• MSMEs can invest in scalable, flexible automation solutions.
• Modular automation systems can be easily adapted or expanded based on the evolving needs of business.
3. Smart Manufacturing:
• Industrial Internet of Things (IIoT) devices help to gather real-time data from machines and processes.
• Sensors and actuators monitor and control equipment remotely.
• Machines and systems are connected to a centralised control system for better coordination.
4. Collaborative Robotics (Cobots):
• Cobots work alongside humans to perform repetitive or physically demanding tasks.
• It is more affordable than traditional industrial robots and easily programmed for different tasks.
5. Automation of Material Handling:
• Automate the movement of raw materials and finished goods within the factory using conveyor systems, automated guided vehicles (AGVs), or robotic arms.
6. Quality Control and Inspection:
• Implement automated inspection systems to ensure product quality and consistency.
• Vision systems and sensors detect defects or deviations in realtime.
7. Digital Twins:
• Digital replicas (digital twins) of physical assets simulate and optimise manufacturing processes.
• Improves design, maintenance, and performance monitoring through virtual models.
8. Data Collection and Analysis:
• Sensors and data collection devices monitor machine performance and gather production data.
• Data analytics identify trends, optimise processes, and predict maintenance needs.
• Extracting actionable insights to optimise production processes, predict equipment failures, and improve overall efficiency.
9. Inventory Management:
• Implement inventory tracking and management automation to reduce the risk of stockouts and overstock situations.
• Automated systems can provide real-time visibility into inventory levels.
10. Energy Management:
• Use automation to optimise energy consumption by controlling lighting, heating, ventilation, and other energy-intensive processes.
• Implement energy-efficient technologies to reduce overall operational costs.
11. Employee Training and Support:
• Invest in training programs to help employees adapt to and work alongside automated systems.
• Provide ongoing support to ensure that the workforce is comfortable and proficient in operating and maintaining automated equipment.
12. Cost-Benefit Analysis:
• Before implementing automation, conduct a thorough cost-benefit analysis to ensure that the investment aligns with the business's long-term goals and financial capabilities.
It's crucial to approach automation to complement the existing workforce and enhance overall operations. MSMEs can benefit significantly by carefully selecting automation solutions that address specific needs and challenges within their production processes.
Digitisation opportunities in MSMEs
1. Supply Chain Integration:
• Digitising supply chain processes can improve visibility and coordination with suppliers.
• Utilising automation to streamline order processing, shipment tracking, and other logistics activities.
2. ERP (Enterprise Resource Planning) Systems:
• Integrated ERP system manages various aspects of the business, including finance, human resources, and production planning.
3. Cybersecurity Measures:
• Robust cybersecurity is required to protect sensitive data and prevent unauthorised access to automated systems.
• Regular updating and patching software to address potential vulnerabilities.
Benefits of automation
1. Increased Efficiency: Automation allows streamlined production processes and reduces time and effort in manufacturing products.
2. Cost Reduction: While the initial investment in automation technology can be significant, it often leads to cost savings over time. Automated systems can operate 24/7 without breaks, reducing labour costs and minimising errors.
3. Improved Quality Control: Automation systems can perform tasks with high precision and consistency, resulting in improved product quality with fewer defects, less waste, and increased customer satisfaction.
4. Enhanced Safety: Dangerous or repetitive tasks can be automated, reducing the risk of workplace injuries. Automation can handle assignments in hazardous environments or those requiring precision beyond human capabilities.
5. Flexibility and Adaptability: Automation systems can be programmed to handle different tasks and adapt to changes in production requirements. This flexibility is valuable for MSMEs needing to produce various products or adjust to changing market demands.
6. Increased Production Capacity: Automation allows for higher production rates and increased throughput, enabling MSMEs to meet growing demands.
7. Data Collection and Analysis: Automation systems often have data monitoring and reporting capabilities. These data analyse production trends, identify bottlenecks, and help make informed decisions.
8. Competitive Advantage: Implementing automation can give MSMEs a competitive edge by allowing them to produce goods more efficiently and cost-effectively.
9. Labour Shortage Mitigation: MSMEs, like larger ones, may face challenges in finding skilled labour. Automation can help bridge the gap by handling repetitive or labour-intensive tasks, allowing human workers to focus on more complex and strategic aspects of production.
10. Regulatory Compliance: Automation systems that adhere to industry regulations and standards ensure product quality and safety requirements. It is imperative in industries with stringent regulatory frameworks.
While implementing automation and digitisation, small industries must assess their specific needs, capabilities, and budget constraints. Training employees and fostering a culture of innovation and adaptability are also essential for successful integration.
Darshana Thakkar is an MSME Transformation specialist and Founder of Transformation-The Strategy HUB. She is a pioneer in transforming MSME companies with an Electrical engineering and MBA in operations background and 28 years of hardcore industrial experience. She helps MSMEs define growth paths, derive marketing strategies, improve business operations, adopt digital Transformation, and increase profitability. She is a winner of several regional and national awards and recognition as an MSME activist and women's business leader. The Transformation was listed among the most trusted consulting companies in 2022 and the Top 50 consulting companies for MSMEs in 2023. She holds a few honorary positions among the Industry Associations.
https://www.linkedin.com/in/darshanamthakkar/
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