“Come, Make in India” Prime Minister Narendra Modi gave a clarion call to the world in his maiden Independence Day address, inviting global and Indian firms to set up manufacturing bases in India.
By Subhash Chandran
The government is taking steps to remove key obstacles faced by Indian manufacturers, like incentives, labour laws, land acquisitions etc. But one aspect which is over looked in this digital era of connected world, eCommerce and social networking is the consumer behavior, which has changed drastically.
This calls for changes in the way manufacturing is done today. Over the past few decades, manufacturing has evolved from a more labor-intensive set of mechanical processes (traditional manufacturing) to a sophisticated set of information-technology-based processes (advanced Smart manufacturing).
Adoption of new digital technologies can easily reduce costs by 20 – 30% by improved capital and labour utilization which will make ‘Made in India’ products competitive. The need for a cloud based IT driven manufacturing platform for use by Indian SME manufacturers who cannot afford investing in IT tools, to make them competitive is discussed in this paper.
New Age Consumer – A digitally enabled consumer in the Connected world
Consumers are driving the “speed of business” in manufacturing today. Purchasing patterns have been completely redefined by the extensive availability of information through social networks and its rapid transmission via a vast range of new mobile devices. With over 7 billion active mobile connections, consumers today are well informed about market products, prices, and dynamics. They are brand agnostic and compare, select, or discard multiple products with just a tap on their tablet. They are increasingly impatient too: they don’t want to wait and they just want it now. This consumer’s purchasing style and shorter product life cycles are impacting the whole manufacturing value chain and calls for changes in the way we manufacture products.
Smart Manufacturing- To Stay Competitive in the Connected World
Through technology such as demand sensing, manufacturing intelligence, load balancing, directed manufacturing processes and supply chain management, it is possible to address today’s consumers and produce products in India which are globally competitive. Having understood the need for change, we have to look at some of the areas which require changes.
1. Digital Integrated Production Planning and Shop Floor Control: At present many manufacturing industries use ERP systems to a certain extent while most of the manufacturing operations like Scheduling, Maintenance, raw material control and SCM functions are done using spread sheets , job cards and e-mails or at best with stand-alone tools, with no real time data flow across functions . Most manufacturing companies have not achieved a complete integration of information flow along the operation process. This greatly affects the productivity and increases the manufacturing cost. By integrating information flow using advanced manufacturing IT tools during all steps of operations, the visibility required to properly manage the end-to-end processes can be achieved.
2. Supply Chain Visibility: It is a key item which helps in controlling the raw material and final product availability at the right time and price. Over the years, SCM has seen deployment of multiple disparate digital tools, creating a siloed system that distorts end-to-end visibility. An integrated tool can help bridge these connectivity gaps.
3. Cloud Based ERP: Many companies are now starting to move away from using In-house ERP systems to connect to the outside world and rely on cloud-based business networks instead. Connecting with their trading partners in the cloud allows companies to share all of that smartness generated on the factory floor during the manufacturing process with the entire value chain in real time. It’s still a long way for many companies, but some have already started the journey.
4. Social Media Influence & Data Analytics: Social Media greatly influence the consumer purchase decisions and hence analysis of this huge data is necessary to make the required changes to the product to ever changing consumer expectations.
5. 3D Printing: 3D printing (or ‘additive manufacturing’) is a potential business model disruptor and market-maker. The cost and efficiency benefits are clear – the ability to produce small-lot or highly customized parts in an ‘on-demand’ setting. Integration of additive manufacturing, into existing supply chain, builds up capability and enables to tap rapidly emerging opportunities
The way Forward:
The adoption of IT driven manufacturing, will call for additional investments in IT tools and training which many SMEs and even large manufacturing enterprises are still reluctant to do. Hence government should come out with training programs at subsidized rates to make the SMEs understand the benefits of IT driven manufacturing.
Government should also talk to leading IT tool vendors to provide a cloud based Digital Manufacturing platform to SMEs at a reasonable cost and provide incentives to companies adopting IT driven manufacturing. Alternatively with the strong presence of IT services companies in India with expertise in Digital enterprise solutions, Government should enable building an “Indian Digital Manufacturing Platform” with multiple manufacturing related modules taking into account the various requirements applicable to Indian conditions. This platform can be hosted in cloud and can be used by Indian manufacturing companies at a nominal cost to make them competitive.
With Indian government’s planned billions of dollars investments to enable country wide high speed connectivity, it is easier to adopt IT driven manufacturing even in remote places and manufacture products which are globally competitive.
By Subash Chandran, Consultant, Hi Tech Domain & Business Strategy, Tech Mahindra