Posted on: June 2018
India on the digital phase of its reforms programme is poised to become the third-largest economy of the world by 2030. The Prime Minister points out that the country offers the 3 'Ds' for driving business — democracy, demography and demand. On the human resource front, the country has a tech-savvy and educated population, skilled labour whilst the administrative front is supported by a robust legal and IPR regime.
Clearly India is a destination that investors have had to look at seriously ever since the 1990s reforms were launched. More than a quarter of a century after, Indian manufacturing companies are targeting global markets and are becoming formidable global competitors in several sectors. Many are already amongst the most competitive in their sectors as the world enters the fourth phase of the industrial revolution Industry 4.0.
Essentially, Industry 4.0 is about is transforming economies, jobs and even society itself with the coming together of many physical and digital technologies as they combine “through analytics, artificial intelligence, cognitive technologies, and the Internet of Things (IoT) to create digital enterprises that are both interconnected and capable of more informed decision-making”, says Deloitte .
Industry 4.0: Building a digital enterprise
“Digital enterprises can communicate, analyze, and use data to drive intelligent action in the physical world. In short, this revolution is embedding smart, connected technology not only within organisations but also our daily lives”. Thus forward looking companies the world over are talking end-to-end digitisation of their physical assets, essential functions and processes and integrating them into digital ecosystems with their value chain partners. All this is being underpinned by data analytics that is expected to spearhead their innovative spirit and drive efficiency.
The eventual mission is stakeholder delight with a special focus on the customer that companies seek to delight with quality at affordable prices and on time deliveries on the one hand while creating value to its shareholders with bottomline improvements through efficient use of its physical, financial and human resources courtesy use of real-time information.
Use automation systems to control production processes (often referred to as OT or Operational Technology) along with enterprise solutions, such as Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Supplier Relationship Management (SRM), Customer Relationship Management (CRM) and such others bolster the movement towards 4.0. However, this literally deconstructs vertically integrated manufacturing into horizontally integrated chain of collaborative value-added partners and this is expected to be the trend of the future, driven by the Industrial Internet of Things (IIoT) and Services into the manufacturing environment.
The next avatar
The convergence of the information and operational technologies serve emerging business imperatives in terms of stakeholder delight. This is courtesy processes being embedded computing processors, memory storage units, sensors and transmitters that generate data. Varroc, a leading auto component manufacturer, under its Industry 4.0 / IIOT initiative has connected all its disparate machines seamlessly to create a single data tunnel that collected various parameters in real time, The initiative has helped the company maximize operational efficiencies, productivity, reduce the energy footprints and maximize capacity utilization
The 'servification' of manufacturing
Manufacturing industries will also buy, produce and sell more and more services that are often embodied in goods as part of the manufacturing process. Besides, there are services such as after-sales support and add-on services that are being embedded in goods during post-production. This, according to the World Bank is “servicification” of manufacturing (World Bank report, September 2017, ‘Trouble in the Making? The Future of Manufacturing-Led Development’). The report says that “Evidence from… India …shows that this servicification of manufacturing has improved manufacturing productivity.” The report also said the servicification of manufacturing is further enabled by using data that will play an increasingly important role in “smart” manufacturing. This is an inclusive development, bringing into its fold the small sector as well.