The Machine Tools Industry Needs To Overcome Large Gaps In Technologies For Steady Growth
BY TEAM MT
Andrew Heller of IBM once said: “Technology is like a fish. The longer it stays on the shelf, the less desirable it becomes.” This analogy is also apt for machine tools; only the most technologically up-to-date survive. India’s rising place in the world economy has already seen it gaining attention as a major manufacturing destination. This has brought about immense scope for the machine tools industry, which serves every major sector from automotive to defence. Yet, even today, the industry continues to be plagued by challenges such as a dearth of new technology and innovations, alongside a lack of skilled labour to adopt any latest technological advancement that may be introduced. It is an unfortunate situation to be in, especially given the opportunities that lie waiting to be tapped.
“One of the issues has been the scale of manufacturing. Our manufacturing industry still does not have volumes, for instance, like the volumes that China sees. The technology used in the machine and level of automation depends on this. Secondly, there is variation in the demands of various buyers for technology & automation. The work culture of an automotive OEM is different from that of a tier I & tier II supplier, and it is further different in engineering & steel manufacturing. The skill of operating people in these factories is different from each other, and therefore the level of technology & automation demanded by them is varied,” says Mohini Kelkar, managing director, Grind Master Machines Pvt. Ltd.
The industry has always been prone to ups and downs in fortunes, primarily because it is highly capital intensive and also depends largely on the demand it draws from user industries. The machine tools industry in India has evolved largely after independence. Being capital intensive investment goods, machine tools draw a high value and one needs know-how to operate them. This explains why the early part of the industry’s growth was unremarkable. But since the opening up of the automobile sector in India in the 80s and 90s, the industry received a push. Since then, the consumer durables and capital goods sectors have also supported the industry’s growth, adding to volume demand for the industry. Yet, being at the front end of the industrial supply chain, the industry continues to expose itself to a high degree of volatility, amplified by shifting trends in the economy.
To add to this, the lack of technological upgrades has a direct impact on the competency of Indian machine tools and affects their scope for sales, internationally. Even though the country is able to compete in terms of production figures, the quality of the equipment being sent out does not match the ones available internationally. If one were to single out a cause for this, it would boil down to technology, or, more precisely, the lack of new-age technology. According to Kelkar, ‘scale’ has a role to play here too. “Due to low production volumes, the cost of various bought-outs is higher as compared to other foreign manufacturers of machines tools. This has an impact on cost competiveness. Therefore, the Indian machine tools manufacturer takes a beating based on a lack of the latest technology on one side & cost competitiveness on the other.”
DESPITE THESE OBVIOUS disadvantages, India ranks 14th in production and 10th in the consumption of machine tools globally, as per the 2015 Gardner
Business Media survey. According to the Indian Machine Tools Manufacturers’ Association (IMTMA), the sector offers several opportunities for investment. Given the current gap between demand and supply for high-end tools and machines, there is a clear need for adding capacities in the sector. The industry is moving towards increasingly sophisticated CNC machines, driven by demand from key user segments, such as automobiles and consumer durables, aerospace etc. Machine tools manufacturers need to develop capabilities to cater to this demand and investments in this area could yield long-term benefits, says the organisation. This obviously calls for newer technologies. The industry does put in constant reverse engineering efforts, but also needs support in the form of high level R&D inputs.
Commenting on these efforts at Grind Master Machines, Kelkar says, “We are putting continuous efforts and investing resources in research & development. Innovation has been the key driver in the growth of our company. Some companies do follow a reverse engineering model, but it is in the form of low-cost solutions and those efforts do not always have robustness & sustainability. Today, the industry demands flexibility and automation. These are the latest trends. Due to volatility of demand and a complex product mix, the machines need to be flexible in their use and with a quick set up change.”
The way ahead is difficult, but clear. There’s been enough talk about ‘Make in India’. There’s also been enough said about the opportunities and gaps it brings with it. It’s about time now that the talk was converted into substantial action, and what better way than to start with rejuvenating the machine tools industry. After all, the machine tools industry forms the backbone of the manufacturing sector. Therefore,
any growth witnessed there will automatically reflect in the growth of India Inc. as a whole. India’s rising place in the world economy has seen it gaining attention as a major manufacturing destination and therein lie great prospects for the Indian machine tools industry