Industrial Automation Magazine India

Digital enterprises are built around the needs of the consumer

Published on : Wednesday 01-07-2020

Ashish Agarwal, Consultant, Digital Transformation Initiatives.

After a decade of Industry 4.0 what is the extent of digital transformation in the manufacturing space in India?

Digital transformation in India is progressing at a rapid pace. As per Mckinsey’s survey, India is the fastest and largest market for digital consumers with mobile data users growing at a significant pace. The government has enrolled more than 1.2 billion Indians in its biometric digital identity programme, Aadhaar, and brought more than 10 million businesses onto a common digital platform through a goods and services tax. Despite all this growth, there is still a tremendous opportunity to tap into. Digital adoption varies across industries with higher penetration in BFSI, education, healthcare, logistics and retail. Other sectors including manufacturing, energy, agriculture, etc., are also adopting digital technologies to transform business operations and define new business models.

New digital ecosystems are visible everywhere around us with redefined interactions between consumers and producers. The manufacturing lines are built to produce smart products like smart cars, active home appliances, smart watches, etc. Many of these products that we use today have the ability to talk to us and are connected with each other. Internet of Things, analytics, artificial intelligence, machine learning, robotics and 3D printing are all the technologies that are building smart factories with a focus on connectivity and communication for better efficiency, better relationship with suppliers, producers and customers. Adoption of digital technologies is certainly bringing about an increased productivity, efficiency and sustainability. The new manufacturing lines are built to increase throughput, uptime and performance. Instead of humans watching the pipelines, there are sensors watching the manufacturing lines and ensuring quality of products and parts being produced.

In more evolved economies like the US, research indicates that manufacturing companies will invest about US $267 billion by 2020. As per the National Association of Manufacturers in the US, 90% of manufacturing companies in the US have fewer than 500 employees. India has easier access to human capital at a lower cost than many of the western markets. Hence, India may not have fully leveraged the efficiencies to bring down the numbers at these levels. However, technology lends itself to drive these efficiencies across our value chains to build lean, efficient and smart manufacturing lines for future.

How should an enterprise begin the process? Is there an ideal roadmap to follow for companies beginning their digital transformation journey?
Companies need to make an assessment of their current operating models, performance levels, time to market, competitiveness, innovation and the ability to adapt to changing market conditions as part of their digital transformation initiative. Digital enterprises are built around the needs of the consumer and organisations should determine the journey from where they are to where they need to be. The digital journey drops legacy assumptions and relooks at the enterprise from all aspects. Developing a culture of experimentation, ability to look beyond legacy practices, redefining processes, quick response to change and continuous adaptation are necessary cultural elements to infuse into the workforce. Digital transformation does not happen in an isolated team but requires the entire enterprise to participate. Ideas come from everyone and the organisations should open up all channels to hear the voice of the customer, suppliers, employees, partners, shareholders, competitors, etc., and respond to what they hear. With this clarity, technology can step in to define and deliver the experiences that these audiences expect
from the organisation.

What is the role for various stakeholders in the organisation in this endeavour?
The leadership teams across enterprises certainly need to work on the culture that promotes innovation and transformation. Setting a vision, learning from the world around us, promoting experimentation and sponsoring such initiatives sets the foundation for change. Operating leaders should rethink the processes and evaluate if they are still relevant to the new age customer. Setting unachievable goals helps to stretch the thinking and push teams to think outside current practices that may not be able to deliver the expected outcomes. Companies should develop an open network that connects with academia, industry, competition, startups and customers to constantly evaluate and refine the experiences that they deliver.

In general, what are the key challenges to overcome in the process?
The key challenges for digital transformation are risk aversion, inward focus, not enough intelligence around market and consumer trends, bias around current practices, holding too close to existing practices and inability to change. Many of these are culture and people aspects that should be addressed through continuous coaching, walking the talk and acknowledging winds of change within the organisation. The rest of the skills and competencies required to lead digital transformations can be sourced or developed.

Will the current scenario act as a catalyst, or rather the companies use this opportunity?
The current scenario will certainly act as a catalyst. Organisations have been pushed to rethink their operating models. Flexible and adaptable value chains, smart manufacturing lines, remote working, lowering the cost of operations, multiple paths to supply chain and de-risking supply of products and services through redundancy in supply chains are all new normal that organisations were forced to adapt to. This has shaken their existing models and exposed how vulnerable our operations are and the difficulties to adapt to a change in our ecosystem. Learning organisations will certainly take learnings from this and accelerate their digital initiatives.

Ashish Agarwal has been leading digital transformation initiatives for more than a decade across Retail, Aviation and Healthcare. He was the former Head of Technology at IndiGo

Airlines as well as Apollo Munich Health Insurance. Ashish’s expertise areas include technology/digital strategy, organizational change management, strategic sourcing and leading high stakes digital transformation programs. He also has a decade of technology consulting experience leading transformational programs across global operations.

#July 2020 Magazine Cover Story

Digital Transformation – The Next Wave The Covid-19 pandemic has achieved what CEOs and CTOs failed to do – struck a blow for Digital Transformation like nothing else did The only constant in life is change, wrote Heraclitus of Ephesus (circa 500 BCE), who famously asserted that Life is Flux, and to resist change is to resist the essence of existence. Yet, most people spend a better part of their lives resisting change. The concept of digital transformation dates back to the time PCs became mainstream and digitisation began, paving the way for digitalisation and then, transformation. To read the full cover story Please click here