The coronavirus pandemic hit manufacturing in an unprecedented way. The spread of the virus affected production in various countries. The virus, in fact, highlighted various critical gaps in the manufacturing sector. Companies should continue having strategic edges to quicken measures for retrieval and surge their flexibility. Moreover, there needs to be adoption of new ways of working and governing within the manufacturing industry to increase its enhancement. In this context, German Engineering Federation (VDMA) recently organised the 9th VDMA Mechanical Engineering Summit, which highlighted topics such as the ease of doing business, Aatmanirbhar Bharat’s role in Indian manufacturing and emerging trends in manufacturing.
The lockdown – A learning experience
The summit commenced with the welcome address by Rajesh Nath, Managing Director, VDMA India, who not only described the blow to the economy and industry during the pandemic months but also celebrated the resurgence and recovery from it. He alluded to the lockdown as a learning experience of sorts – how it has highlighted criticality in the manufacturing sector, how companies need to review existing conditions, explore automation possibilities, and thus, counter the setbacks of the lockdown.
Besides, Nath also highlighted some of the key activities undertaken by VDMA India office in 2020, like German Technology day event at Guwahati, International Symposium on Industry 4.0 at Gurgaon & Indore, a CEO roundtable on Electromobility in Mumbai; European Ceramic Technology Symposium (ECTS) in Ahmedabad; web seminars on wide ranging topics like safety, frugal engineering & value engineering, automation trends in manufacturing and CEO Thought Leadership series.
On this occasion, the Summit Special issue was also released by the dignitaries. This was followed by the address of the Chief Guest, by Dr P Anbalagan, IAS, CEO, MIDC, who spoke on ‘Investment opportunities and the new initiatives by the State administration for enhancing the development of the manufacturing industry in Maharashtra.’ He mentioned about Magnetic Maharashtra 2.0 – a new initiative to facilitate business in the state. Some of the features are the plug-and-play infrastructure, a landbank of more than 40,000 acres, flexible rental & pricing structures, automatic permissions in 48 hours, specialised Labour Protection guidance and an Industry Employment Bureau for locally skilled people.
The exchange between India & Germany
Furthermore, in his special address, the Guest of Honour, Dr Juergen Morhard, Consul General, Consulate General of the Federal Republic of Germany, Mumbai, informed the audience on the latest FTA updates. He also asserted that the strength of Germany is not just industries but also how the industries organise themselves. He highlighted the importance of exchange between India & Germany and a need for continuous dialogue to facilitate better understanding & mutual benefits.
There was then a virtual address by means of a recorded video message by Ulrich Ackermann, Managing Director, Foreign Trade division, VDMA Frankfurt, who gave a presentation on ‘Challenges for global trade during pandemic’. Here, he highlighted three prognosis, like slow economic recovery, rising global protectionism and necessity of reforms to improve competitiveness of the other members of the EU. According to him, India is the second most important mechanical engineering industry in Asia, after China, for the German industry. Additionally, on occasion of the Summit, a knowledge paper on ‘Prospects of selected industries in the new normal era of post COVID-19’ was released by knowledge partner, BDB India. In his brief presentation, Chetan Ligade, Director, BDB India, highlighted the economic overview & manufacturing trends in India.
Labour law reforms
Later on, the summit moved into Technical Session I, which commenced with a presentation by Sachin Shinde, Director – Indirect Tax, Deloitte India, who spoke on ‘Ease of doing business - new tax initiatives. He threw light on the recent initiatives by the Government of India on e-invoicing and how it has gained momentum in the last 10 years. He also touched upon other topics of different GSTR, input tax reconciliation and the challenges faced due to non-compliance. After that, Dharam Veer Singh Krishnawat, Associate Partner, Team Lead - Mumbai, Roedl & Partner, made an overview on the recently introduced new labour law reforms through a presentation. He highlighted the importance of the four new laws which consume 100 state laws and 40 central laws previously governing the labour law matters.
The last speaker of the session was Aditya Nagarajan, Vice President, Guidance Tamil Nadu, who spoke on ‘Realigning global value chains in the new normal’, where he discussed the importance of Germany as a country for the state of Tamil Nadu with a 35% share in FDI.
Need for a prerequisite digital environment
It was then time for Technical Session II, which was devoted to the theme ‘Emerging trends in manufacturing’. This session started with a presentation called ‘AI in manufacturing’ by Stephen Raj Arokiasamy, Head - Data Science and AI, Robert Bosch Engineering and Business Solutions. He highlighted the importance of AI, the growth it has seen in the last years and how it has become an integral part of the latest developments. This was followed by Dr Shiv Venkatarami, Vice President – Operations, Lapp India, highlighting the topic ‘Smart value chain enabled by Digital Factory’. He mentioned that more organisations were operating remotely during the pandemic period and he further stressed the need for a prerequisite digital environment with a digital supply chain to use AI effectively and the importance of analytics.
The final leg of this session was a presentation by Anup Kapadia, Product Manager - Device Connectivity, HARTING India, who spoke about ‘Technology leaps in connectivity solutions for Smart Manufacturing’. He extensively explained about the Single Pair Ethernet (SPE) on its features, benefits, applications and how it considerably improves the existing multi-pair Ethernet.
The capital goods sector
The final session of the summit was devoted to a thought-provoking panel discussion on ‘Atmanirbhar Bharat propelling Indian Manufacturing sector towards 1 trillion-dollar economy?’ The discussion was moderated by Nath and the esteemed panellists were Vivek Bhatia, Managing Director & CEO, thyssenkrupp Industries; Harsha Kadam, CEO & MD, Schaeffler India; Suresh K V, President & Head – Region India, ZF India; Rashmikant Joshi, Managing Director, Festo India; Sanjeebit Choudhury, CEO - India, Vice President - Asia Pacific, WEISS Automation Solutions India and Nobert Wirth, Managing Director, Haver & Boecker India. The discussion began with Nath putting his first question to Bhatia, where he asked him how Aatmanirbhar Bharat would help us to increase the contribution of manufacturing to propel us to the one billion economy. To this, Bhatia responded that if we look at the last five to six years, economic growth has really presented a mixed picture. "Aatmanirbhar Bharat is different where India is saying that we have a significant amount of local demand. When it comes to capital goods, we have made some progress, but perhaps, some additional focus is required,” he said and went on, “Where the government needs to focus to support this sector is really three areas – One is that we need to continue to focus on infrastructure investment and second, there has to be a big focus also on raw materials & imports available and third – on the HR front, we need to look into skill development.”
Attracting global buyers & investors
Nath then turned to Joshi, with the question about how India can increase its manufacturing value add to increase its global share as per the aim of Aatmanirbhar Bharat. Joshi answered that we certainly do need to contribute into the global economy through Aatmanirbhar Bharat through manufacturing. “This can be done by attracting global buyers to buy from India,” he explained and continued, “Secondly, we should attract global investors to invest in the country to manufacture for India & the global market. We need to become technically & commercially competent in the world and we need to have the capacity to produce large volumes of consistent & reliable quality.”
To this Joshi then made an addition, saying, “Speaking of volumes, we also need to increase the number of large organisations that can produce volumes with higher productivity and also have financial powers to invest in R&D.”
Continuing on to Wirth with the discussion, Wirth, as the Managing Director of a German company in India, was asked what his experience is on ease of doing business. Wirth put across, “No company is investing just because of ranking. Speaking a little bit about the perceptions of my friends & colleagues, the problems that come across are immense bureaucracy, work with government officials and also many companies missing certain standards. These small things are making it difficult for companies to come to India. Plus, we are always facing big difficulties when it comes to pricing and this is really a set-back for many people.” Wirth further added that everyone who really comes to India knows that the potential in India is massive and really huge.
When we talk of Aatmanirbhar Bharat, we are talking of being self-reliant. Then, one can’t help but wonder how India can quickly move when we are importing 27% from China, suddenly do everything on our own and start sourcing everything locally (and if that is even possible). Suresh K V clarified this by stating that it’s his personal belief that India has the capability of delivering any product. “But that needs two important things,” he cited and went on, “The will and the discipline. What’s more is that we need to go the full haul and self-reliance is very important, given that what we have been through in the last one year. But it can’t be done overnight; it will take some amount of time, efforts and some years to happen. But then, we also have to target for 100% localisation; 99% is not okay. We need to ensure that we are demonstrating all the capabilities we have.”
Market competitiveness for MSMEs
Following this, Choudhury was asked how MSMEs can be strengthened & can contribute effectively to Aatmanirbhar Bharat. He replied, saying that of the 6.3 crores of MSMEs, it’s very important to see that 99.4% are micro and only 5000 are medium. “60% of the MSMEs are in rural areas; so availability of the skills level force is also one of the challenges,” he divulged and continued, “When it comes to equipping the MSMEs to the next level, the government is doing its part of it, but the most important thing is the market competitiveness of their product.”
Nath then came to Kadam, asking him if Aatmanirbhar Bharat would stoke the innovation, passion & entrepreneurship, and how start-ups can help to contribute towards Aatmanirbhar Bharat. Kadam responded, “We are too much of a democracy and that’s where the problem lies. Start-ups are going to generate jobs. People are innovative; it’s just that we need enablers to get that innovation. India’s intellectual capital has been recognised; in fact, I guess it’s far more recognised outside of India than in India itself.”
Pitch by start-ups
Post the panel discussion, a ‘Pitch by start-ups’ session connected to the manufacturing sector was organised. Rahul Lahane, Founder and CEO, Chistats Labs and Mohan Babu, Business Development, Utthunga Technologies shared about their start-ups and their activities. A short question and answer session with the panellists was followed, immediately after.
3rd VDMA Manufacturing Excellence Awards
After this, the stage was set for the 3rd VDMA Manufacturing Excellence Awards, aiming to recognise the VDMA members who have implemented methods, either in energy efficiency & conservation or improvement in work condition & work safety in their manufacturing process. VDMA India associated with Roedl & Partner as award partner, under the following categories, namely ‘Energy Efficiency and Conservation Award’ and ‘Work Condition and Work Safety Award’. Maximum two companies against each category were awarded. The co-winners were Bosch and Daimler India Commercial Vehicles, and the runner-up was Schaeffler India under the large category ‘Energy Efficient and Conservation Award’.
Bucher Hydraulics was the winner and Hella India were the runner-up under the medium size in the same category. In the ‘Work Condition and Work Safety Award’, the winner was SKODA AUTO Volkswagen India and the runner-up was Voith Hydro under the large category. KERN-LIEBERS India was the winner and SMS India was the runner-up under the medium category of ‘Work Condition and Work Safety Award’. The summit ended with a concluding remark by Nath, who thanked the speakers & panellists for the frank & open discussions.
Light at the end of the tunnel
The summit made clear that the future of the manufacturing industry is certainly not a grim one; in fact, it’s one with hope. The industry needs to work on its weaknesses & gaps thoroughly, along with support from the government, which will certainly take it umpteen steps ahead. With the right will & discipline, set of skills and improvements in the right areas, the sector has only light to see at the end of the tunnel.