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DIGITALISATION Industry 4.0 – The key to revive and grow manufacturing sector

Jul 7, 2020

The COVID-19 pandemic has brought in incomparable losses to the Indian economy and restoring the country’s financial health is going to be a difficult task. The manufacturing industry and the MSMEs, which are amongst the most affected sectors right now, need to start relying on Industry 4.0 - relevant technologies to ensure continuity and sustainability of their businesses. The author organisation, Aeris Communication, helps organisations capture data from thousands of disparate endpoints and devices with IoT solutions and data driven IoT infrastructure. In this Cover Story analyses the impact of COVID-19 and draws resemblances from the history, while vindicating how Indian manufacturing can recover from the impact of the pandemic with technologies being the crutches. - Dr Rishi Mohan Bhatnagar, President, Aeris Communications India

COVID-19 lockdown is estimated to cost India $4.5 billion a day (Acuité ratings). The negative sentiment of the economy can be seen in the fluctuating stock market and in the weakening of the Indian currency. However, India is not bearing the brunt of coronavirus alone; the global financial markets also reacted pessimistically to the COVID-19 pandemic and behaved in ways never seen before.

Drawing parallels from history

The advent of COVID-19 or the coronavirus pandemic has led to unimaginable economic, social and psychological unrest, comparable only to the Spanish flu pandemic of 1918. First observed in Europe, the United States and parts of Asia, Spanish flu’s spread was exacerbated by World War-I. Today, globalisation led international financial dependence and intercontinental travel is one of the reasons for the rapid global spread of COVID-19. In many ways, the current situation is a déjà vu of 1918-1919 era. At that time, there were no effective drugs, citizens were ordered to wear masks, all businesses were shuttered and bodies piled up in makeshift morgues before the virus ended its deadly global march. The greatest effect on the working population also occurred during this time. Researchers at the Federal Reserve Bank of St Louis revealed that the Spanish flu caused manufacturing to decline by 18% in 1918-19, led unsurprisingly by huge dips in both supply and demand, a large labour supply shock and increase in wages.

According to the Purchasing Manager’s Index, India has seen its manufacturing sector growth slow to a four-month low in March as economic activities slumped. A few days after the lockdown was first announced, the Society of Indian Automobile Manufacturers (SIAM) announced that the auto industry was losing ₹2,300 crore in production turnover for every day of closure. Are we going to experience the 1918 setback again or is there a way to mitigate the impact COVID-19 and a looming recession?

Technology at rescue for the manufacturing industry

Thanks to the advancements in technologies, like the Internet of Things (IoT), AI, AR/VR, cognitive computing, digital twins, Machine Learning, robotics, creating cyber-physical systems, 3D Printing, blockchain, etc facilitating Industry 4.0, the world of manufacturing is transforming its four building blocks – material, machines, methods and manpower.

  1. Material: The global supply chain for raw materials was heavily dependent on one source. This will undergo a major disruption with majority of the countries/industries announcing either shifting to alternate, nearshore or domestic locations. This will be presenting new opportunities for countries, like India, to become the manufacturing hub. But this requires strategy to scale, produce quality output and reduce cost. Technology can help automate, monitor and control the entire supply value chain remotely, anytime, anywhere.

  2. Machines: Industry 4.0 integrates communications, IT, data and physical elements across the value chain and helps transform the traditional plants into smart factories. The whole new world of Industry 4.0 brings to life machines that are highly intelligent and connected, creating a fully digital value chain. And there is good news for existing factories or brownfield, too, as new technology platforms present the capability to digitalise the non-digital assets, securing existing investments.

  3. Manpower: Skilled manpower has always been a challenge, but in today’s world, where human priorities have changed to staying safe and healthy, this will become even more difficult. More stringent hygiene standards need to be deployed, audited and monitored, and for large factories, this will be equally challenging to implement. To reduce the exposure and all, this will require technology interventions. Robots connected remotely to computer systems, equipped with Machine Learning algorithms, can run manufacturing units with minimum human support. In addition, safety & security of on-duty workforce is equally critical, especially in areas which are remote or hazardous. Today, connected and wearable technologies are helping employers monitor and track their workforce in real-time on a single dashboard. This helps in providing immediate assistance and relief to workers having emergency.

  4. Methods: People, operations and business processes will undergo complete transformation. The combined power of computers & automation enables remote management, fault detection and control of machines for their upkeep & predictive on-demand maintenance activities. This also enables standardisation of goods quality at reduced cost of production.

Digital skill gap would remain a challenge during the COVID-19 crisis. A well-defined digital transformation framework, with regular conduction of on-the-job skill development initiatives as part of the factory transformation journey, would prove beneficial. On the brighter side, employers can also have access to the cross-border talent pool for roles and responsibilities which can be performed remotely. At this time, deeper interface and stronger collaboration with technical universities can also help manufacturers for identification & early hiring of bright minds and training the entry level engineers on systems and corporate culture.

The table above summarises the challenges, opportunities and digital solutions that address each of the 4 Ms of manufacturing.

The future is now

Ensuring continuity and sustainability of businesses amid the COVID-19 crisis, while maintaining the uninterrupted supply chain of goods and services in the country, is critical. Even though Industry 4.0 is in its nascent stage in India, the Government of India’s push to manufacturing through the ‘Make in India’ initiative has garnered considerable attention. The Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) - Udyog Bharat 4.0 is an Industry 4.0 initiative by the Department of Heavy Industry, Government of India, which aims to raise awareness about Industry 4.0 among the Indian manufacturing industry. Also, National Policy for Advanced Manufacturing would help manufacturers implement technologies faster for enhancing productivity, reliability and business strategy while reducing costs and improving profitability.

COVID-19 has created a stressful time for all the industries, especially for the country’s Micro, Small and Medium Enterprises (MSMEs). MSMEs make up for about 45% of the country’s total manufacturing output, 40% of exports and almost 30% of the national GDP and operate across the value chain. They employ an estimated 11 crore people and are stressed due to depleting internal reserves and low visibility of demand. To mitigate the negative impact of COVID-19 lockdown on the manufacturing & MSME sectors and their revival, the PMO announced the financial relief package of ₹20 lakh crore under the ‘Atmanirbhar Bharat Abhiyan’ to boost ‘Make in India’ and strengthen the Indian supply chain globally. The relief package is built on five pillars – economy, demography, system, infrastructure and demand, to support the Indian supply chain considering the land, labour, law and liquidity that will support small businesses, MSMEs and the farming sector. At a time when other countries are shifting their dependence on imports, this relief package brings fresh hope to Indian manufacturers and MSMEs who are heavily dependent on imports from other countries to manufacture their products.

Silver lining in dark clouds

I believe that there exists a silver lining in this darkest cloud of the century. What differentiates the past from the present is the fact that the 21st century is marked by the digital era and India has a digital savvy talent pool. We have to live with the realities of the ‘new normal’ driven by the WHO guidelines on personal and environmental sanitisation, social distancing and work from home. And this has a profound impact on the corporate culture with the priorities of business drastically shifting from profit to prevention, with business continuity, assets and employee safety becoming paramount. Technology is the only option for business continuity and survival. We must make ‘local’ the mantra of our lives. We have indigenous technology solutions from IoT and technology start-ups to large technology firms for both greenfield Industry 4.0 implementations and for making brownfield factories transform into smart factories. The government at the centre and state are providing full support, and the financial relief package will work as booster doses, especially addressing the MSME sector.

I am very hopeful that post-coronavirus lockdown, things will slowly and steadily commence towards normalcy in line with the ‘new normal’. Manufacturing companies will now progress faster from the initial stage of testing digital technologies and pilots for proof-of-concept to full scale implementations with the management boards approving investments to rapidly institutionalise technology advancement for Industry 4.0.

Image Gallery

  • Robots connected remotely to computer systems, equipped with Machine Learning algorithms, can run manufacturing units with minimum human support

  • Summary of the challenges, opportunities and digital solutions that address each of the 4 Ms of manufacturing

  • With an agile working model that allows businesses to remain productive, digitisation and adoption of emerging technologies will continue to be a critical priority and serve as a cost-effective route for business
    differentiation across industry verticals in the foreseeable future

  • Dr Rishi Mohan Bhatnagar

    President

    Aeris Communications India

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