Indian manufacturing must leapfrog from Industry 2.0 to Industry 4.0

By Veerendra Jamdade, CEO, Vritti Solutions Ltd.

Indian manufacturing sector is contributing 16% to the country’s GDP. To achieve $5 Trillion economy, manufacturing sector must grow at a pace of the service sector. Indian manufacturing will have to compete with Chinese and other Asian markets to achieve this growth. World Economic Forum report on Global Competitiveness shows that Indian manufacturing significantly lags behind other emerging Asian countries on Technology Readiness. India’s rating is 1.8 compared to 5.8, which is of developed Asian countries.

Germany ranks the highest on the technology readiness, globally. It is surprising to see that the Indian service industry is thriving on technology but our own manufacturing sector is lagging behind. It is now time for manufacturing sector to have this wakeup call and work on technology upgrade. Indian manufacturing must leapfrog from Industry 2.0 to Industry 4.0.

Industry 3.0 and Industry 4.0

Industry 3.0
Industry 3.0 started with the electronics. It started around 1970 with the start of use of electronics to bring automation in production by use of Programmable Logic Controllers (PLC). These automations required manual interventions and inputs.

Information technology was put to use in this period for data processing in manufacturing. It started with Material Resource Planning (MRP) which evolved into ERP in the 90s. In India only large organizations have adopted this. SMEs have adopted NC, CNC machines but are still wary of Information Technology absorption.

Industry 4.0
The Fourth Industrial Revolution is also called as Connected Factories. This is the phase of smart machines, production facilities and storage system that can autonomously exchange information. These are interfaced with business application to trigger actions and control manufacturing process without human intervention.

This exchange is made possible with the Industrial Internet of things (IIoT).

Industry 4.0 includes the following –

Cyber-physical system: A mechanical device that is run by computer-based algorithms.

The Internet of things (IoT):  Interconnected networks of machine devices and vehicles embedded with computerized sensing, scanning and monitoring capabilities.

Cloud computing: Offsite network hosting and data backup.

Cognitive computing: Technological platforms that employ Artificial Intelligence.

How do Indian SMEs move to Industry 4.0?
Let us talk first about move to Industry 3.0. Indian SMEs are now using CNC and retrofitted machines in their shop floors. Use of PLC, data logger is common. Process industry has implemented Supervisory Control and Data Acquisition (SCADA) systems.

Use of Information Technology is becoming common. Finance and Inventory is managed through software. Many term this software as ERP but these are far away from the real meaning of being Enterprise application. Real time material and machine planning is not achieved by many. The main reason for not implementing ERP in real sense is the availability of real time data. Due to paucity of realistic data these softwares are not delivering the benefits expected like lowering inventory, improving availability and best use of the man and machine.

We also see many failed implementations of ERP in the SME sector. This has created a negative opinion about what ERP can really deliver. SMEs will have to understand how to choose right ERP, right implementation partner and their own role in managing change in their organization for successful implementation. Many SMEs try to duplicate their way of manual working in ERP which then fails to deliver the requisite results. SMEs must give good emphasis on making their team mindset ready for the change and adapt to the new way of working.

Industry 4.0
With our experience of working with many Indian large as well as SME companies, one of the biggest challenges is to convince employees to enter data. I believe Industry 4.0 will come handy for our industry as it does this job autonomously. In Industry 4.0 you will be connecting your machines and equipment to your ERP. This makes all your shop floor data available to your ERP in real time. This data can be quantity produced, quality produced, quantity available in machine buffer. Not only this, by installing sensors and meters which are IoT capable you can gather machine health information like vibration, noise, power consumption etc. This information can be used to plan predictive maintenance.

Most importantly from the SME leadership point of view, they can see all the factory status and alerts on their mobile devices. This will help them to be closer to their customers than remaining trapped in the factory premise.