Industrial Automation Magazine India

Transforming the Industry

Published on : Thursday 02-04-2020

Experts debate the factors that are holding back the Indian industry in quest of modernisation, and improved productivity.

Digital Transformation is the buzzword for industry in the wake of the Fourth Industrial Revolution or Industry 4.0. Like much of India with various States at different stages of development, the Indian industry too is not a uniform entity in terms of modernisation and technology. The automotive industry is perhaps the most automated and leading on the digital transformation front as well, but many other segments, especially the MSME component that forms the largest chunk, are still at various stages of modernisation. Just a few months ago, the newly appointed Chief Digital Officer of a leading engineering company in Pune that handles projects around the world, made a candid confession during an industry event. “While we are a world class company in terms of our products and technologies used in them, our own plants are still largely legacy equipment, ranging from the Industry 2.0 and 3.0 era.” It is against this backdrop that Industrial Automation sought the views of domain experts on the current state of Indian industry in terms of modernisation.

“When we talk about the modernisation of Indian industries, we don’t only talk about the in- house status of machinery nor the facilities inside the factory or plant, but also about the whole infrastructure that is peripheral to the manufacturing-supplying-consuming cycle. In this regard, it can be said that a lot depends on the logistics support, proper roads, proper waterways, apt skillset by workers and technicians, adequate power and water supply, rigid governance, properly regulated market and properly formulated industrial rules,” says Deepanjan Dhar, Techno-Commercial Manager, Oasis Elevators, and Consultant, Dayal Construction Pvt Ltd. To read his full interview Please click here

“The Indian manufacturing sector has evolved over the years, especially with the advent of Industry 4.0, which has created a great opportunity for the Indian manufacturing sector to fulfil its global ambitions. However, the adoption rate of automation and digital technologies has been significantly slow in India when compared with other countries,” says Jabez Mendelson, Team Leader, TechVision, Frost & Sullivan, and cites the company’s analysis in a report titled “Impact Assessment of Automation in the Indian Manufacturing Sector”, which confirms that the sector has more MSMEs, whose focus has been high production volumes and minimal profit margins. To read his full interview Please click here

“The higher level management need to be convinced about the RoI for this change to happen. Most of the time, many investments can’t be justified because of the cheaply available workforce. But, they should also look at the quality of the output, whether it’s a product or service,” opines Jasir Sabri, Founder, CONSYST, and CEO, SPIA. Krishnan KM, Founder & Managing Director, Utthunga Technologies, is of the view that Indian manufacturing sector has traditionally been slow in adopting new technologies and processes. “However, we definitely see an uptick in the last 2-3 years. From what I am hearing from our front-line sales people, the willingness to adopt IIoT to improve plant efficiency has grown. We also see industries investing in newer machines and tools, rolling out software applications, training their operators for safety and other key skills. Energy efficiency is also on the radar of a few industries. Having said that, when comparing with the rest of the industrial world, we may still be lagging,” emphasises Krishnan. To read his full interview Please click here

What could be the reasons for the slow pace of modernisation of industry in general despite the availability of technology? “Industrial modernisation has to address the upcoming challenges facing manufacturing in India and respond to new opportunities of production, including the changes resulting from digitalisation and other new technologies,” says Dr Makarand Sawant, Technology & Business Visionary, who believes we must factor in provision and uptake of advanced manufacturing technologies. “Data availability remains a key issue for the uptake of advanced manufacturing technologies, because there are currently no high-quality datasets publicly available. Region- and industry-specific framework conditions are necessary to support industrial modernisation,” he stresses. To read his full interview Please click here

Narendra Saini, Assistant Vice President – Technology and Services, Unlimit IoT Pvt Ltd begs to differ on the point of availability of all the right tools & technologies as of now. If it were so, the industry will adopt to a proven technology, as it did in case of ERPs, PLMs, CRMs, and many other industry acknowledged tools that are popular in respective industry segments, he feels. “Even though technology is available, the customisation or verticalisation of the tools has a long way to go. Technology development is a continuous process and unfortunately there is no standard tool or a proven single method available for this transformation. Every organisation has to find its sweet spot and right transformation strategy, either based on the integration of the currently deployed tools/systems and subsystems as part of their IT framework; or completely overhaul the IT strategy by adopting a new platform based approach, with each custom requirement to be developed on top of this platform in an ongoing manner,” he emphasises. 

To read his full interview Please click here

According to Niju Vijayan, Executive Director, Avanteum Advisors LLP, adoption of technology should not be viewed as a uni-dimensional dependence factor. “Many factors To read his full interview Please click here
determine this adoption,” he says, and cites a few:

• Legacy of the industry segment: Change is slow on account of existing size and dominance of industry, where law of physics takes precedence for some time

• Competitive environment of the industry: Customer demand and competitive offering force organisations to seek support of technology

• Resources available with companies: Larger companies are early adopters while smaller organisations wait for the tipping point to adopt change.

There are others like global supply chain linkages, regulatory environment, market opportunity and new investment, and lack of widespread innovation. “Except for the upward

trend witnessed in the past 5 years, Indian industry has been plagued by low innovation zeal,” asserts Vijayan.

Vikas Dhawan, Entrepreneur, Futurist, and essentially a Technologist, enumerates three points that he feels are the constraining factors: “A major entry barrier is the cost of acquiring the required skill-sets and the transformation technologies to implement the Industry 4.0 stack. Of course, most Industry 4.0 technologies have a clear return on capital employed, (ROCE) that pays for itself, but this is not widely known. The second barrier is the fear of change, and the necessity to move out of individual comfort zones: These tech-enabled transformations bring huge changes in not just the process, but the organisation structure itself, which translates into insecurity for many within. Third, in many older organisations, the mind-set exists to avoid change if things have been working well for the past many years, and there is complete unawareness (or even denial!) of the inevitable tech and business disruptions coming, as well as of the consequences of not embracing this wave.” To read his full interview Please click here

As mentioned earlier, not every industry segment is modernised, let alone digitalised. The Indian textile industry still performs below potential, especially when it comes to exports, and not without reasons.

“India’s textile industry has cost advantages compared to both developed and developing countries. However, the Indian textile industry has stiff competition from smaller developing countries. For instance, countries such as Bangladesh and Vietnam have started to export more apparel than India as they do not have great domestic markets,” says Mendelson. “These competitors have affiliated their apparel manufacturing industry with export markets thereby becoming an obstacle to the export potential of the Indian textile industry,” he adds. Also as Jasir Sabri says, “Automotive industry has adopted technology from all over the world, and we can't see a lot of SMEs in this segment, whereas a large chunk of textile industry may be distributed in the SME sector.”

There is more to this, like protectionism, according to Niju Vijayan, who is of the view that protectionist environment, although pays dividend in the short term, is detrimental to the long-term growth interests of any industry. “Entry and tariff barriers lead to complacency in domestic industry and technology investment is the biggest casualty of such a trend. This trend was evident in the textiles industry when multiple technology stimulus packages had to be introduced to sustain the competitiveness at global level,” says Niju.

The energy sector in India has received a lot of boost from renewables with progressive government policies in pursuit of ambitious targets. Because even as the renewable energy segment in India is growing, so is the demand. What should be the ideal energy mix? “Given the limited availability of coal and the extensive carbon emissions from thermal power plants, India will need to shift its power generation capacity towards non-conventional sources. The ideal mix of energy should be solar, bio-mass, bio-pellet, geo-thermal energy in warm regions and for cold regions it should be hydro-power and biomass and bio-pellets. For coastal areas Wind energy, OTEC, Tidal energy, Ocean energy and Wave energy can be used,” opines
Deepanjan Dhar.

“It is difficult to imagine India suddenly leaving the fossil fuel based methods and completely becoming a renewable energy producer,” says Krishnan, who is of the opinion that while there is impetus to the renewable energy segment in India which is growing, Oil & Gas cannot be fully be replaced. “It would be difficult to say what should be the ideal mix and it depends on the growth rate of renewable energy sector. However, the attempt should be totarget a double digit growth in the near term for the renewable energy sector and progressively scale up. I hope we can touch 70% on fossil fuel and 30% renewable energy by 2050,” he says wistfully. To read his full interview Please click here

“Each energy option has its advantages and disadvantages. A well-balanced energy mix must be planned while considering factors such as re-examining the costs of nuclear power generation. The most promising renewable source can be the solar energy. Since there is no perfect energy option, it is desirable to combine the following four options: More manageable energy conservation; cheaper renewable energy; cleaner use of fossil fuels; and safer nuclear power,” expresses Dr Makarand Sawant.

What more can the government do to boost manufacturing in India with the vision for a USD 5 trillion economy by 2025? “The ‘Make in India’ program is a very good start by the government of India. However, if we look at the examples of other countries, the industry modernisation is also supported through low interest loans or government subsidies. Government can think of some innovative ways by which the companies can achieve better productivity and safety standards. Just as an example, business loans at a subsidised rate can be provided against the project plan to improve certain key KPI, where the year on year subsidy on the interest can be linked to the KPI improvement for which the loan was sanctioned,” says Narendra Saini.

“The grand vision of USD 5 trillion economy for India by 2025 is an imperative too. The youngest population in the world needs economic opportunities and employment to prosper. The near doubling target of economic size can be achieved by unconventional methods alone and widespread technology adoption is the inorganic solution. Digital technologies of AI/ML, IoT, VR/AR, Analytics and Robotics are some of them, primed to act as the propellant for this trajectory,” says Vikas Dhawan. “While technology infusion is expected to spur greater innovation in the Indian industry, the collateral advantage expected from this movement is the immense export opportunity. For the economy to achieve the USD 5 trillion milestone, Made-in-India for the world, i.e., exports should contribute at least 25% to this potential size,” he adds.

Is sustainable development a difficult goal to achieve for a growing economy like India? “Yes, sustainable growth is difficult in a country like India where illiteracy, superstition and ill practices run rampant. The basic sense of sustainability comes from the basic working knowledge of the environment and its peripherals. If one is ignorant and unaware about it then how would the sustainability thought conjure in one’s mind,” asks Deepanjan Dhar. “I believe sustainable development shall not be the goal, rather it should be the way and the goal should be the building of a prosperous India. Although we are seeing a lot of challenges, in all respects – global pandemic, market crashes, and economic instability – worldwide, India has the potential to overcome these challenges and get to the goal,” expresses Jasir Sabri.

“For a developing nation like us, sustainable development certainly is a challenge. Industry has to be incentivised to focus on using energy and environment efficient ways to produce products and services and at the same time creating wealth and employment for the workforce. The major obstacle that I see on this journey is human greed. Only with proper policies and their enforcement can we see an inclusive and eco-friendly society,” is how Krishnan puts it.

“Social barriers like population growth, paired with unsustainable consumption and production patterns among the wealthy, are the biggest social challenges to achieving sustainable development in India. Absent of a significant change in human behaviour, sustainability will not be potential,” says Dr Makarand Sawant.

“India has the twin challenge of marching down its development path and chart a sustainable growth path for itself. India for centuries have been following sustainable practices, but this has been sacrificed to some extent in the last few decades as the demand for faster development took precedence,” laments Niju Vijayan.

“Well, sustainable development need not be difficult, provided we can get over the popular misconception that sustainable development cannot be lean,” concludes Vikas Dwawan. (Note: The responses of various experts featured in this story are their personal views and not necessarily of the companies or organisations they represent.