What Next for Smart Manufacturing?
On a hot summer day in 2014, Sunil Mathur had a bit of a problem on his hands. His business development team told him competition was taking away market share. It’s not as if their quality was better. “They are just producing more variants than us,” was the response. As MD and CEO of Siemens Limited, this was not a great situation to be in. Mathur, an old company hand, decided to get to the bottom of it. The demand was for more production lines for which there would be significant capex. The chartered accountant in Mathur came to the fore and when queries related to return on investment came up, it was obvious that the numbers did not add up. Nevertheless, the issue needed to be addressed.
“That’s when we decided to drink our own champagne,” says Mathur with a laugh. What stared him in the face was a 50-year-old factory in Kalwa, an industrial location outside Mumbai, manufacturing circuit breakers (a device that automatically stops the flow of current in an electric circuit) using serial production (referring to large quantities that are made in the same way). In terms of actual numbers, there were 77 variants of the product across three production lines. “We decided to apply smart manufacturing to see if it works well,” recalls Mathur. In July 2017, the new-look factory was inaugurated and as the results trickled in, it was obvious the effort was worth it. Now, 180 variants could be made on one production line. That’s not all. “We went from a production time of 21 seconds on three lines down to nine seconds on one line with multiple variant mixes and no need to stop the production line. Now, higher volumes and a lower cycle time meant we could look at a global market.”
Like Siemens, many companies have hopped on to the smart manufacturing bandwagon with success. The phase, called Industry 4.0, uses a lot of technology with machinery connected through the internet. The next phase that companies are readying themselves for is Industry 5.0, where people and robots will work together.
Smart and getting smarter
So, what is the smart manufacturing buzz all about and why is the future so dramatically poised? With all the potential that comes with it, companies are understandably excited and see a way to increase productivity, create a more skilled workforce with a belief that the investment made in this area will handsomely pay off. Veejay Nakra, CEO-Automotive Division, Mahindra and Mahindra, explains 4.0 has been the foundation to enable the integration of physical and digital manufacturing and unlock the real potential of smart manufacturing. “Smart manufacturing is transforming the whole manufacturing industry by building upon the solid 4.0 framework and integrating that with cutting-edge technologies such as AI, ML, Digital Twins, predictive and prescriptive analytics to efficiently deliver high-quality products and delight customers,” he points out. If 4.0 was about the change to predictive from reactive, smart manufacturing takes it one step further. “It is getting more integrated with the value chain. Smart manufacturing enables access to real-time data and insights needed to make smarter and faster business decisions. ”
Nakra is speaking having experienced the benefits of smart manufacturing. “We have been able to reduce our repair and spare costs in the significant double-digit per cent range by investing in IoT (Internet of Things) capabilities four years ago and connecting over 80 per cent of our critical machines with sensors and edge analytics,” he says. At the core of all this digitisation journey, lies the ability to generate data, an invaluable weapon, which, to him, improves both products and processes. “It has enabled us to launch the XUV7oo with upcoming launches too expected to gain from this.” The improvements are evident across the board. “By setting the right conditions in the paint booths, through an AI model, we have clearly improved the performance. Reliability, too, has improved with a reduction of 90 per cent in the testing costs for engines using algorithms.”
Jayanta Banerjee, Group CIO, Tata Steel, is clear that the investment in technology will have to deliver a manifold return. “The real challenge lies in contextualising technology and making that work. How technology and business come to a point of convergence is what a lot of time is spent in,” he says. For the steel major with a global presence, a target to create $2 billion worth of EBITDA impact was undertaken. “This is through a process of business transformation where digital will be leveraged.”
Contrast this with an MNC and the advantage of being part of a global network makes a visible difference. Top that up with superior technology and the story can look very good. In the instance of Bosch, its software division, Bosch Global Software Technologies, is a big part of the story. “In addition to building smart factories, Bosch leverages a unique ‘dual strategy’ to build an ecosystem of business and technology partners to create localised and affordable digital solutions for SMEs and customers,” says Karsten Mueller, Senior VP (Manufacturing & Quality), Bosch India. The advantages in areas such as manufacturing, product, service quality and R&D help in crafting an India-specific strategy, with digitalisation and automation at the forefront. “Besides disrupting business models through the power of data, making healthcare accessible or empowering farmers to make efficient decisions, our 4.0 principle allows us to apply our own digital solutions,” he adds.
For Schneider Electric, the factory in India makes products that go all over the globe. “In that sense, we are a part of one global supply chain, since that is a global function,” explains Javed Ahmad, the company’s Senior VP (Global Supply Chain). Take the case of a factory acceptance test (a verification process that a customer conducts to make sure the equipment is exactly what was ordered). In the past, it would take two to three days. “Today, with augmented reality and using Google glasses, a physical visit is not required and everything is done virtually,” says Ahmad. For Schneider, he points out, power costs have dropped by at least 15 per cent, while operational costs are down 20 per cent. Making smart manufacturing work is easier when one is speaking of scale, plus the ability to invest in technology as well.
Speaking of benefits that accrue, pharma major, Dr. Reddy’s Laboratories decided to leverage six of the eight technologies that have defined Industry 4.0, among which are advanced analytics, robotic processing and digital performance management. “We are in the second year of our transformation and have managed a 30 per cent improvement in cost efficiency and a 2x improvement in people productivity, though the big outcome is the movement towards a digitally native organisation,” says Sanjay Sharma, the company’s Global Head (Manufacturing). Dr. Reddy’s, according to him, invested heavily in electronic data capturing across manufacturing and quality control laboratories, examples being batch records, usage logbooks and laboratory information management systems. “It involved storage and management of data to create layers or stacks to ensure data is used to potential.”
Across companies a lot of processes are done by robots today. To Ahmad, what is repetitive should be left to robotics with the skilled labour doing more value-added tasks. “We already use 5.0 with cobots (or collaborative robots).”
The pandemic has hastened the process of adopting technology. According to Jayakeerthi Anand, Senior Vice President, ABB, a breakdown earlier had the maintenance person in the middle of it. “However, a remote application today using data means I can track the performance of the equipment—that means foreseeing a problem.” Citing the example of additive manufacturing, Anand thinks it may have been advanced by two years. “Any job that took four months earlier is now down to 15 days.” Humans working with robots, to him, will be the theme of the 5.0 story. “4.0 was robots working with machines,” he says. Anand picks up the instance of the AGV (automatic guided vehicle), which had a defined path. “With AI, it can take the best possible route and move with the humans,” he adds.
Taking the Plunge
A little over two years ago, when the pandemic was still largely unknown, Shashi Arora spent a week in China visiting factories manufacturing air-conditioners. The story of mass production was in line with what one has come to expect of the dragon nation. For every unit of this consumer durable that came out of India, China made at least 10 more. Arora, CEO, Lloyd, a company that Havells had acquired in February 2017, saw an opportunity. “While we could not match them on scale, there was an opportunity in manufacturing,” he says. In the consumer durables industry, it is the norm to outsource large chunks of the manufacturing process, which leads to plants really doing little more than assembling. Back in India, there were some rounds of brainstorming before the big idea emerged. Lloyd would set up a fully robotised and automised unit. “This would be our new-age plant,” says Arora. Housed in Ghiloth, an industrial area in Rajasthan, the plant has its machines and production processes integrated with AI and IoT. In all, there are 70 robotic points, while material handling is taken care of by AGVs.
Arora admits that his company was spending a lot more but with complete awareness. “It was a conscious decision where we would manufacture everything. The advantage is that it leads to high levels of quality control,” he says. To him, smart manufacturing and an investment in it is a guarantee of product quality. “It scores on low costs and high quality. It comes down to remote monitoring or high levels of productivity at each leg of the plant. Today, precise details on shrinkage and wastage are easily available.”
Looking ahead
The opportunity in digital has seen many an organisation wanting a big slice of the pizza. Tata Steel’s Banerjee speaks of a hyper-personalisation approach, an imperative for the future. “We should have a situation where any retail customer with a specific requirement can place an order online directly with us.” The time and effort benefits courtesy 4.0 has not missed his attention. Banerjee takes the example of the roofing sheets business, where his company sees digital as a strategic way to grow. The traditional way to do it was to look for houses individually. “Now, satellite imagery throws up high levels of accuracy at minimal costs by using analytics.”
Everyone is looking in the direction of what 5.0 can do for them. Lloyd’s Arora is clear about how it can be a big moment for his company. With a capacity of one million units at the Rajasthan plant, a decision has now been taken to expand operations in Andhra Pradesh’s Sri City. The IoT gets a lot sharper with the ushering in of the next phase of smart manufacturing. For instance, an issue that the consumer faces with his air-conditioner, such as a gas leak, will come through in the form of an error code. “That will be relayed back to us and can be read on the app carried by the service engineer,” he explains. By the time he enters the customer’s home, the job on hand is quite clear. “Everything gets resolved in one visit and there is a less service cost for the customer,” he adds.
As the digital future gets set to write another script, just how different will 5.0 be? Bosch’s Mueller maintains there will be a lot of pressure on manufacturers to optimise their operations and supply chains while increasing their domestic production. “Big data, IoT, AI, SaaS, and cloud computing along with AR and VR, backed by IT infrastructure will play a key role in transforming manufacturing. The inclusion of cobots will be a game changer to boost process efficiency and effectiveness.” How companies rise to the occasion is what will differentiate the men from the boys. “To get it right with 4.0 or 5.0, nothing is more important than the company’s approach. Failure is often on account of deploying a piecemeal method. Only an integrated strategy making a difference across the company is what will work,” says ABB’s Anand. That sounds like a pretty smart thing to do.
@krishnagopalan
