The importance of data and digital transformation has accelerated manifold recently. While India is a voracious consumer of data, it also needs to capitalize on the opportunity to become a data innovator. NASSCOM revealed that an integrated data utilization strategy can add $450 – $500 Bn to India’s GDP by 2025. At the same time, with the world looking beyond China, the manufacturing sector’s contribution to India’s GDP is poised to rise from 15 to 25 percent by 2025. A crossover between data utilization and manufacturing is inevitable and is vital in the recovery of the sector post COVID-19. This can single handedly help overcome the challenges of manpower, productivity, procurement, and capital investment to aid growth for societal and economic benefits of the nation. As data services foray into petrochemicals, chemicals, pharmaceuticals, utilities and other process industries, software eating the world and disrupting established vendors is now coming to industrial automation.
Technology augments the ‘Just- In -Time’ (JIT) model
Under the ‘Make in India’ vision, there has been great interest and speculation around the country’s emergence as a global manufacturing powerhouse. For turning the vision into reality, the industry needs to adopt a strategic approach that will provide predictive logistics planning and processes to improve supply chain resilience and reduce cost impact of shortages. Embracing a ‘Just- In- Time’ business model, could provide the necessary impetus to strike the right balance. It is a system that targets reducing the time spent by a product going through production and, at the same time, cutting back the response time from suppliers, to hold down production costs and increase productivity. Rather than working on a production-push basis, the JIT model allows organizations to work on a demand-pull basis, introducing massive cost efficiencies and higher ROI across the business value chain.
Leveraging emerging technologies such as automation and Artificial Intelligence to conduct scenario testing is key to determining the optimal supply chain set-up. Sensors and wireless network technologies have raised the possibility of incorporating Internet of Things (IoT) technologies into manufacturing processes.
To put things in perspective, let us consider the example of coal mining, a primary energy source for a thermal power plant. A key challenge for miners is to identify areas of overproduction, streamline fleet management processes, ensure employee safety, and avoid environmental spill over etc. Adopting a JIT model enables processes at all levels to accurately time and quantify delivery to the customer. This standardization provides insight into end-to-end business process, including the exact quantity, avoiding extra inventory, managing employee availability, drawing up fleet capacity, equipment layout, cycle completion times and tracking minute by minute movement of trucks drivers, etc. These eventually lead to better communication outcomes between employees and supply chain partners, ultimately delivering maximum value to customers.
Adoption of mobile and cloud-based enterprise resource planning technology solutions can monitor, track, and manage inefficiencies across each business function. Integration of predictive analytics, RFID, cloud computing, robotics, and big data into industrial processes will help address changes in consumer demand, the nature of products, the economics of production and supply chain.
Invest in the technology boom or fear a bust?
The COVID-19 pandemic has resulted in the disruption of trade and investments, especially for sectors such as manufacturing. To add to this, manufacturing is already a capital-intensive industry, requiring investments in high-priced items, such as facilities, infrastructure, and major manufacturing equipment. So how can manufacturing enterprises large and small leverage the power of technology without taking a massive hit on their balance sheets? By paying as you consume!
As-a-service offerings are already standard across many industries. These pay-as-you consume models often offer customers flexibility to pay for only what they consume, coupled with lower capital costs. These models are a lifeline to manufacturers looking to leverage IT to build a resilient business. A subscription-based approach like cloud consumption can help producers adopt emerging technologies, while stabilizing cash flows and ensuring constant customer outreach and sales. While industry 4.0 had already begun with the digitization of the industry, its integration in a post COVID era will be determined by the ability of businesses to balance responsibilities between its fixed assets and the technology spends.
In conclusion, the sector needs to articulate a measurable game plan to achieve the ‘Atmanirbhar Bharat’ dream. A large part of this will depend on the concerted effort by the MSME and small manufacturing business, driven by cost effective, technology based, pay as you consume products and services. Ensuring an effective supply chain will require investments in a mix of digital and physical infrastructure. Software-led disruption in manufacturing is picking up at a faster pace with software companies bringing a new set of capabilities and interoperability to the market for cloud storage and analytics. The disruption must begin now and traverse through the industry for many years, with waves of customer acceptance and adoption of software-based offerings. COVID-19 in all its volatility and stress, has upended traditional models of trade, forcing us to reimagine the entire business of manufacturing that will cater to the needs of the future.