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Indian Automobile Sector

SMART MANUFACTURING The Indian automotive sector — Moving towards advanced technology adoption

Dec 14, 2018

After automation, digital transformation or Industry 4.0 is a widely recognised imperative in automotive manufacturing. Research has shown that measurable improvements in manufacturing productivity are the most reliable starting points for the digital transformation business case. Creating an automated, digitalised manufacturing environment requires appropriate strategy and tools to enable affordable and sustainable transition to the smart, digitalised factory. In this context, the Viewpoint section analyses the current status of the Indian automotive sector in terms of global competitiveness, adoption of advanced technologies and the global technology trends in this area.

"Impact of digitalisation on automotive manufacturing is growing” - Rajesh K Sharma, Head—Manufacturing Technology, Fiat India Automobiles

We have a long way to go if we compare the Indian automotive sector with global counterparts in terms of adoption of advanced technologies and skill upgradation. Barring few OEMs, majority of players are still using the conventional technology in their processes. In a race to keep the costs down, the need to go for advanced technology often takes a backseat. The penetration of digitalisation in most of the auto OEMs is good. The reason for this is that the amount of complexity that these companies are managing today is so high, that if they do not turn their enterprise into a digital one, it will be difficult for them to survive and exist. However, it’s not such a rosy picture if we see the digitalisation in majority of tier 1 and tier 2 auto-component manufacturers. Here, there are many initiatives that are required to be taken.

Regarding adopting advanced technologies, it is at the discretion of the organisation to go for it. However, careful evaluation should be done as to what value addition it will bring if put in place. Given a choice, Indian factories are certainly adapting to advanced technology. The impact of digitalisation on automotive manufacturing is certainly growing at a good pace. Any advance technology will bring along a new set of specialists to control and manage it effectively. There will be creation of a pool of expertise to manage it. However, basic knowledge is not enough; advanced knowledge has to be the norm. Hence, there is a great potential for skill development as new technology gets increasingly adopted.

“Our competitiveness is not bridging gaps with global top 10 countries” - Nilesh Auti, VP & Global Head for Manufacturing Industry, Tech Mahindra

Automotive manufacturing contributes 7% of India’s GDP, growing at 7% CAGR in India. These are strong numbers compared to the global top 10 countries. However, WEF ranks India at 30th spot on the Global Manufacturing Index, behind Japan, South Korea, Germany, Switzerland, China, Czech Republic, USA, and Sweden, in the top 10. Our competitiveness, global quality index and adoption of advance digital technologies are not bridging the gaps with the global top 10 countries. Robot penetration per 10,000 employees in Korea is 500, Japan & Germany is 300, China is 50 and India is 20. This has a direct correlation with manufacturing process quality & productivity.

We have advanced digital skills availability in India which do not create an impact in India, as they are utilised for global customers. There is also a need to upgrade the existing blue collar skills to adopt new digital skills for their route manufacturing operations. Digitisation at factory shop floor with robotics, automation, Industrial IoT, IT-OT integration, adoption of analytics, etc leads to improved productivity, worker efficiency, better quality, control warranty-returns cost, etc. The major Indian OEMs such as, Tata, Mahindra, Maruti and Hero are making good progress in adoption. However, the gap is mainly with the T1 suppliers and mid-size T2 suppliers. Indian factories have an easier path for digital technology adoption as they are mostly less than 20 years old while it’s harder in Japan and Germany, as most factories are 50-100 years old. We expect a similar wave like ERP adoption in 2000-2010 to happen for the digital technology adoption in Indian auto factories.

In the next 10 years, we foresee blue collar workforce to be trained to help them adopt digitalisation and use for the routine operations activity to improve quality, throughput and production planning. We expect that most of the new job creation in the factory will be in services with the knowledge of robot programming, PLC integration, data analytics, visual camera-based machine learning, 3D printing, etc.

“Indian automotive industry is at the cusp of adopting digital manufacturing” - Dr. Mohan Godse, Consultant, U 2 I, Pune

To achieve global manufacturing excellence, the Indian automotive industry needs to further improve productivity, reliability and reduce rejection levels. Implementation of automation and robotics is on the rise in the Indian automotive sector and these technologies are playing a major role in achieving zero defect, zero error and higher productivity. Higher R&D spending is required to enable innovation in product, process and manufacturing engineering. Training and upskilling of the workforce is vital in implementation of advanced manufacturing technologies.

Indian automotive industry is at the cusp of adopting digital manufacturing to improve OEE, quality and reduce the cost. Indian IT companies, with expertise in manufacturing, are poised to provide cost effective digital manufacturing solutions. These manufacturing technologies, along with Industry 4.0, provide opportunities in manufacturing, supplier chain, logistics, and procurement to improve profitability. Implementation of Manufacturing Execution Systems (MES) and Industry 4.0 is at a nascent stage in Indian automotive industry. However, there is a growing awareness for adoption of these technologies across the industry.

Digitalisation in automotive manufacturing is enabling real-time manufacturing data collection and data analytics. These technologies can accelerate decision-making process leading to higher productivity and reducing cost. A successful digitisation journey involves re-engineering existing processes and systems, selecting the systems integration partner for effective implementation of these technologies, developing a technology roadmap, and a change management system to institutionalise technologies across the organisation.

Further, the workforce needs to have problem-solving, cognitive skills and social skills in the rapidly changing technology era. Industries are focusing on training and upskilling of the workforce to adapt with ever changing demands in the industry. Increased collaboration is required between industry and academia to groom the future workforce.

Image Gallery

  • Rakesh Sharma

    Rajesh K Sharma,

    Head—Manufacturing Technology,

    Fiat India Automobiles

  • Nilesh Auti

    Nilesh Auti,

    VP & Global Head for Manufacturing Industry,

    Tech Mahindra

  • Dr Mohan Godse

    Dr. Mohan Godse,

    Consultant, U 2 I, Pune

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