Thermax’s digital strategy and the initiatives lined-up

Thermax is a 5,831 cr company headquartered in Pune, India. The products suite manufactured by the company includes heating, cooling, water and waste management and specialty chemicals. The company also designs, builds and commissions large boilers, for steam and power generation, turnkey power plants, industrial and municipal wastewater treatment plants, waste heat recovery systems and air pollution control projects.

There are 14 manufacturing units – out of which 10 are domestic and four are based overseas. The company has a presence in 88 countries.

Thermax, inspite of having a multinational presence, didn’t see much movement in adopting digital until two years ago, when Prosenjit Sengupta was appointed as a full time Chief Digital Officer (CDO), who was also made the council member. There are nine council members who run the various businesses. The role of the CDO was carved out as s senior management position, wherein even the CIO reports to the CDO.

Thermax’s former MD and CEO, MS Unnikrishnan, talking to Financial Express recently in the light of the Coronavirus crises said, “We will now be accelerating servicing and maintenance functions for our equipments. There is an initiative already for remote servicing ability. We believe that a similar crisis can also erupt in future, so we should be prepared. In a situation like this, if all my equipments around the globe are connected through the net, then, we will be able to predict the health and servicing of the equipment that we have supplied. Also, our engineers will be able to attend to a problem online itself sitting anywhere in the world. We already have a chief digitisation officer who we appointed more than a year and a half back to spearhead this work,”

The chief digitisation officer Sengupta deep dives into the digital strategy of Thermax and also shares the benefits out of the initiatives rolled out thus far. “It begins with bringing about business efficiency by focussing on the front end – that is enhancing the revenue stream and the back end, which caters to improving the operational efficiency,” explains Prosenjit Sengupta, Chief Digital Officer, Thermax.

At the front end, the revenue stream can be widened via two channels – expanding the current base of customers and coming up with new business models using the power of digital. On the other hand, the back end can be rationalised by two ways – improving effectiveness, quality by either using automation to provide the same results with the same cost and lesser wage cost or juice out more productivity from the existing investments. 

Prosenjit Sengupta takes charge
As soon as Sengupta joined, the brief given to him by the CEO was very succinct, “to convert Thermax into a digital Thermax” and the first step he took was to appoint a consultant to gauge the digital maturity of various systems and processes across the group. The next step was to compare the maturity metrics, compare them to what some of the best companies have achieved in the parallel industries and what should be done to reach the equivalent digital maturity levels. For e.g. due to lack of examples of digitalisation in the manufacturing sector in India, Thermax compared itself with the auto and FMCG sector in areas like sales, pre-sales, proposal management, manufacturing, supply chain, engineering, etc. A deep dive study was conducted in these areas and a big laundry list was prepared on the digital environment that will replace human interventions with the help of apps, portals and other tools after conducting the necessary business process reengineering exercise. What determined these achievables ?It was the initial strategy of transforming the front end and the backend. The study was completed in one year. By Nov 2019.

Over one hundred small and big digital projects were defined to be completed in the next 5-7 years. In the last one year, Thermax has completed about 10-15 percent of the initiatives. Prosenjit has covered a lot of ground since he was appointed in November 2018. A combination of big and small projects have been commissioned and they cover all aspects of both the front and backend.

Proposal automation solution
A case in point is the proposal management automation initiative, which has rendered a 15-20 percent enhancement in customer satisfaction, efficiency, time, etc. Thermax receives proposals from their customers, which are not straight jacketed, for which Thermax has a readymade solution. The requirements are different for the same kind of engineering solutions from different companies. It requires the engineers to understand the customisation and accordingly prepare the bill of materials, costing and the overall product solutioning. “The time taken to respond to these proposals in our industry may vary from 5 days to over two months, depending on the project complexity. However now, this process has been automated and the closest fit for the solution is finalised quickly. This is not just about time improvement. It also includes quality output, which is harmonised across products and businesses,” says Sengupta. Moreover this has made the dealers more independent, who no longer has to be dependent on the engineer from Thermax for various inputs. Thus the dealers are empowered directly to deal with the end customers. The solution has been implemented in three businesses and the rest are in process.   

Thermax, has designed this solution indigenously by creating a portal and integrating it with the CRM. The engineering intelligence is embedded in the solution, which also goes to the extent of creating solution drawings and accordingly automating the bill of material, costing etc.

Thermax is currently implementing the CRM solution (ninety percent LoBs are covered), building apps and portals for internal efficiency improvements; engineering solutions like PLM (implemented in two LoBs), MES (implemented in one manufacturing plant near Chennai), automated 3D-4D drawings; remote servicing of products using digital tools; remote performance and monitoring.  

On the backend, the entire employee lifecycle has been rolled out and is available on the mobile platform.

On cyber security, most of the critical initiatives have been taken. In terms of protecting the cloud on private networks; the employees are given access to enterprise systems only through a VPN or a Citrix channel. “As we move forward towards developing apps and portals, a holistics Mobile Device Management (MDM) portfolio will also be adopted. Data Leak Prevention (DLP) will be implemented soon to protect the data transmission,” says Sengupta.  

On an annual basis, Thermax allocates half a percentage of the overall revenue towards digitisation.

The wave of digital technologies has been changing the scenarios of various businesses and manufacturing has been one industry, which has not seen much movement on tapping the potential. However given the potential of how digital technology can change the manufacturing sector, many manufacturing companies have started investing in digital. Recently the MNC, Godrej and Boyce Group appointed a full time Group CDO, who will reportedly have a CIO working under him.