Manufacturing is the backbone of economic development, and India aims to become a global manufacturing hub by 2047. While technology will be a part of this journey, it has to be the right fit. “Technology must work for business,” says Jayanta Banerjee, Tata Steel’s Group Chief Information Officer (CIO), emphatically. That’s not easy to accomplish amid a tech disruption when there are constant discussions on smart manufacturing and the high investments involved.
That said, shop floors across manufacturing firms have undergone a remarkable transformation thanks to the disruption. At Tata Steel, for instance, the entire agglomeration operation—a type of conditioning of iron ore before it makes its way to the blast furnace—is now done by people sitting in an air-conditioned room in Jamshedpur through an array of LED screens. “Our mines are 350 km away, but it hardly matters,” says Banerjee, adding that in the future, more work will take place remotely, with fewer people on the shop floor.
While terms such as AI, Gen AI and ML are a part of the lexicon now, the challenge is to make them relevant to the manufacturing process, say experts. “Technology will not replace human excellence… but competence levels vary across the workforce,” says Banerjee, adding that AI’s role is to remove that variability.
However, the western template of Industry 4.0 (replacing humans with automation) will not work in India since livelihoods stand to be affected, say experts. Instead, one must bring in effectiveness with empathy; instead of knocking off a part of the workforce, one can upskill them, say experts.
From the present to the future
Sunil Mathur, MD & CEO of enterprise, infra and energy solutions provider Siemens Ltd, says the government’s investments over time in reducing logistics costs, improving infrastructure, and consistent policy measures have helped put India on the path to transforming into a global manufacturing hub. “The tipping point will emerge when global supply chains also relocate to India to feed into Indian manufacturing,” he says.
Mathur says the government’s ambition to increase manufacturing’s share to 25% of the GDP is an unmissable opportunity. “At Siemens, we believe digitalisation, with its inherent capability to sustainably drive efficiency, productivity, scalability and flexibility, will act as an enabler and accelerator for manufacturing,” he says, citing the example of how the company transformed its 50-year-old low-voltage switchgear factory in Kalwa (an industrial area outside Mumbai) into a “world-class digitalised” one.
Experts, however, highlight that a lot still needs to be done on the path to 2047. Ashwath Ram, MD of manufacturing major Cummins Group in India, says if India aspires to be among the Top 3 nations in terms of GDP, it is necessary to both expand and strengthen manufacturing. “A thriving manufacturing sector will ensure self-reliance, boost exports and see job creation,” he says. Ram lists adoption of smart manufacturing technologies (Industry 4.0 practices including AI, ML and automation to enhance efficiency, reduce costs and raise quality), more R&D investments, sustainability and environmental practices, developing a skilled workforce, and robust policies as some of the areas that need to be addressed.
“Gen AI tells me the propensity of a risk/accident and that is done in seconds. Likewise, if I am interviewing someone for a position, AI will tell me the person is not authentic or is reading off the internet because of its high-level search capability,” says Tata Steel’s Banerjee.
Shifting base
Disruption in the sector is moving at a frenetic pace. But, according to Subhabrata Sengupta, Partner at Avalon Consulting, the pandemic slowed the trend of increased globalisation. “Nearshoring in manufacturing is becoming more prevalent and it is Turkey and Eastern Europe for EU or Mexico for the US,” he says, adding that the question now is whether advances in 3D printing technology could lead to hyper customisation taking place through neighbourhood manufacturing shops.
But it will take time for global manufacturing to shift to India. Ram of Cummins thinks it will be influenced by a combination of capital investments, innovation and disruptive technologies. Each of them has a critical role to play—capital is needed to implement new technologies and up quality, while innovation is what propels product development and process optimisation. AI and other disruptive technologies such as IoT, blockchain and additive manufacturing can revolutionise manufacturing and open up new markets. “These disruptions lead to major shifts in industry dynamics, introduce new leaders and displace incumbents,” says Ram.
Each sector comes with its own unique requirements. Amol Nagar, Executive Director (Global Supply Chain) at GE Aerospace, refers to aviation where a blend of capital investments and tech innovation is required to meet short-term and long-term goals. “In India, we have developed a robust supply chain for aero engine components in our Pune factory and with our 13 other commercial engine parts manufacturers, including Tata Advanced Systems, who are integral to our global supply chain,” he says.
Experience and a sound understanding of the space shape how large MNCs use tech in the domestic markets. Mathur of Siemens says its digitalisation and automation technologies have enabled local manufacturers to compete on a global scale. Citing the example of an automotive customer, he points out how a four-decade old plant was able to boost productivity by 20% by adopting digital technologies. “A large F&B company increased its throughput by 1.5% and had energy savings of 4%,” he adds.
What now?
There are other issues that need to be sorted on the path to 2047. Avalon’s Sengupta speaks of India having struggled with policy clarity. “Industry lobbies have often succeeded in getting duty structures inverted, leading to Bangladesh stealing a march in garments since domestic textiles needed protection. That policy has affected solar, gas, electronics, paper or furniture and we will need a clearer framework.”
Then, there is the issue of skills. GE Aerospace’s Nagar points out that India has diploma and graduate engineers with a general knowledge of manufacturing processes. “Aero engine manufacturing requires specific metal joining skills that are not currently taught,” he says. “Manufacturing training courses in this area could help in dealing with the issue of talent shortage.”
Sengupta maintains manufacturing automation will continue with AI increasingly integrated in the processes. “That integration would be in the areas of quality, including online checking of key output parameters and tweaking of input variables. As AI’s capability increases, it will result in increased flexibility in manufacturing as well,” he says, adding that the incorporation of AI-enabled tools will also lead to a reduction in the carbon footprint. He cites examples of how large companies such as Hindalco Industries have recycled aluminium, Vedanta’s initiatives in using automation and advanced control systems in smelting processes, and JSW Steel adopting green technologies resulting in electric arc furnaces and utilising waste gases produced for auxiliary purposes.
India has come a long way in the manufacturing space since Independence, but it has also missed many opportunities on the way. Experts say now is the time to correct that and make the best use of the present for a brighter future. It is too big an opportunity for the country to miss.
@krishnagopalan