The year 2021 has been one of hope and survival. Out of the looming uncertainties of 2020, which brought about much disruption and economic contraction, this year has been like a beam of sunlight after a night storm. While it witnessed the worst side of the current health crisis, it also infused the country with greater confidence and self-belief to make a comeback and close the year on a much stronger & brighter note. This is much evident from the manufacturing sector itself, which nosedived in the first quarter of FY 2020-21 by 36%. However, even at a time of most severe disruptions, the sector rose by 49.6% this year, almost equalling the FY 2019-20 level. By the time the financial year will close, the sector would have consolidated even further.
Definite learnings from the recovery
However, with the strong comeback, there are definite learnings as well. To begin with, industries in India need to accept and understand that larger uncertainties will be a part of our lives for years to come, and wishing them away would not restore the status quo. Faced by crises, industries need to embrace adaptability, agility and resiliency and much like nature itself, evolve every time to design & establish a new status quo – the new normal. Simultaneously, they also need to be better prepared. The way forward would be to keep Aatmanirbhar Bharat’s vision and mission, shared by the Prime Minister, close to our hearts, and devise strategies that can take the sector & the country on the path of self-reliance.
In this journey of being self-reliant, industries have a major role to play. The manufacturing sector accounts for 17% of the Indian GDP. While the government is doing its bit to push the sector through various policies, such as production linked incentives and tax rebates, manufacturing in India can expand its potential in the next decade to accelerate the country in its aim to become a five trillion economy. The government focus has also become rather strategic and long-term by nature. To reduce dependencies of importing components essential for digital technologies, it has taken decisive measures to kick-start or accelerate domestic manufacturing.
Industrial automation: Global trends
Post-pandemic, the world has been adopting advanced technologies more rapidly and moving towards an ‘All Electric, All Digital’ world. The biggest enabler of growth and safeguard against uncertainties for the manufacturing sector would be to embrace Industry 4.0 and leverage industrial automation capabilities to power manufacturing in a sustainable manner. Globally, as industries resumed production coming out of the shadows of the pandemic, there has been a growing demand for automation technologies. As per a Fortune Business Insight report, the global industrial automation market reached $153 billion in 2020 and is estimated to record a CAGR of 8.9% from 2021-26. The sector will most likely exceed $325 billions by 2027. Post the pandemic outbreak, industrial digitalisation has peaked world over. However, it is noteworthy that organisations that were early adopters of Industry 4.0 technologies and had invested in industrial automation way before the pandemic, found the real world crisis to be the biggest practical challenge and the strongest test till date for industrial digitalisation & automation. The global crisis emerged as a moment of truth for these early adopters to examine whether their investment would yield return and safeguard their businesses amidst unprecedented uncertainties.
A McKinsey study that has been tracking 400 global companies that had undertaken the transition to Industry 4.0 post 2017 revealed that 94% of respondents agreed that Industry 4.0 kept their operations running and 56% admitted that the technologies were vital to navigate through the crisis. Globally, organisations who hadn’t adopted industrial automation struggled to ensure business continuity and were caught in a sudden spike in demand of the technologies. The pandemic has proven to be a wake-up call for these organisations to move towards automation.
Those who had scaled the technologies had found them invaluable in navigating through the challenges with much agility and resilience, while those enterprises that were transitioning gradually received a reality check pertaining to their assessment of the transition. This was evident in the McKinsey study which recorded a 40% drop of those who claimed they had successfully transitioned to Industry 4.0. This puts the spotlight on not only the need to accelerate the shift to industrial automation but to also have the right understanding of the state of transition and most importantly, to undertake the transition in the right way.
Industrial automation in India
Indian industries need to capitalise on these opportunities and undertake a digital transformation towards the future. Indian Industry 4.0 is already led by the government’s flagship initiative, Samarth Udyog Bharat 4.0 and its many institutions. In addition to various government measures of helping the manufacturing sector to navigate through the pandemic, 2021 saw several developments which will be a boon to the industry in the times to come. Major Indian telecom companies and sectors have rapidly begun upgrading the digital infrastructure to prepare for the national auction of 5G which is expected to happen by 2023.
There has been a further push for ‘Make in India’, which will create a demand for various services and products. The Union Budget 2021-2022 had already announced an outlay of ₹1.97 lakh crore for production linked incentive schemes to boost domestic manufacturing across 13 key sectors. It is estimated that this investment could result in a $500 billion worth of production in five years. Additionally, India is investing in semiconductor & indigenised domestic manufacturing and innovation in defence segments.
What makes industrial automation an exciting avenue for manufacturers is that it includes a host of technologies with wide-ranging applications. The pace at which intelligent technologies are evolving at present, we may just be scratching the surface of all that we can do with it.
Industry 4.0: Technologies and trends
While industrial automation has wide ranging applications across various sectors within the manufacturing industry, some sectors can be at an advantage directly from current technologies. Industry 4.0 essentially would mean integrating & connecting various technologies and amplifying cyber physical systems to optimise productivity & efficiency in a sustainable manner.
The host of technologies that industrial automation will leverage includes the Industrial Internet of Things (IIoT), Artificial Intelligence (AI) & cloud computing capabilities, robotics & automation, Big Data, cyber security & modelling, visualisation, simulation and immersion capabilities. There are certain evolving trends that will shape Industry 4.0 adoption in this decade, which are as follows –
Faster connectivity: The emergence of 5G will shape the future of connectivity all over the world. While 5G network infrastructure and digital technologies have already been built and deployed in advanced economies, Indian telecom majors have begun investing in building the necessary infrastructure. With the speed of 5G data connectivity, IoT and other technologies will revolutionise industrial automation capabilities.
Sustainability: Higher profitability and productivity or safeguarding against future uncertainties are not the only reasons to adopt industrial automation. The shift is essential for sustainable growth and to avert climate change. Over the next decade, the world will aggressively shift to renewable energy and will be powered by cleaner electricity, which are an essential precondition for cleaner technologies. We will increasingly witness greener mobility, energy efficient industrial, commercial & residential buildings, sustainable water & wastewater management and other sustainability objectives. However, digital technologies singularly contribute to reducing carbon footprint by increasing operational efficiency and reducing wastage in industrial setting.
Next-level computing and process automation: This decade will witness the cyber physical infrastructure becoming more concrete. Armed with AI and superlative analytical capabilities, cloud technologies with distributed cloud infrastructure will ensure better data storage, handling, processing & analytics. Consequently, next level computing will help address complex problems to benefit businesses and increase efficiency. With IIoT, process automation will reduce manual intervention and monitoring while efficiently running operations.
Industrial automation has wide-ranging applications and holds tremendous untapped potential. Even current technologies can benefit manufacturers across sectors immensely. What undertaking a transition today does is creating the right foundation for rapid upgradation and adoption of newer & better technologies. As the technology trends shape the future of the Indian manufacturing space, there are a few sectors that can already undergo a major transformation.
Mobility: The Indian automobile sector is one of the biggest Make in India, Made for the world success stories. While the sector accounts for 6.4% of the Indian GDP and 8% of India’s total exports, it is undergoing a major transition to electric and hybrid mobility for sustainability considerations at present. New vehicles are increasingly becoming digital and connected. In fact, we are pushing the boundaries to design autonomous vehicles and self-driven cars. While we are shifting to cleaner mobility solutions, it is imperative that the manufacturing processes and post-sales services are sustainable as well. The next generation industrial automation technologies with open and agnostic software, IIoT and AI-enabled plant & machinery architectures, autonomous robotic process automation, immersive reality technologies and advanced cloud computing & cyber security technologies can all greatly enhance resource & space management, power distribution & efficiency across processes – from designing, manufacturing & assembly and testing to streamlining the supply chain & distribution networks.
CPG and F&B manufacturing: The consumer packaging goods of the CPG industry can be revolutionised by industrial digitalisation capabilities that would empower the sector with unhindered, continuous and increased productivity with the use of IoT & connected technologies. Industrial automation will have AI and Machine Learning (ML) boost predictive analytics, equipment availability & monitoring and contactless maintenance. With cloud-based digital platforms, users will be able to access facility information, supply data and sustainability metrics and therefore, make informed decisions. With actionable insights, manufacturers can improve their F&B operations for the CPG sector.
Oil & gas and petrochemicals: The oil & gas as well as petrochemicals value chain is highly infrastructure and process-intensive that is distributed across various verticals, including onshore, offshore, refining & processing, pipeline management and distribution network. Industrial automation integrates these separated domains throughout the extraction and production lifecycle while minimising downtime, optimising operational efficiencies and shortening delivery cycles. Connected design & operations present accurate & timely data as unified digital solutions provide transparent and real-time visibility of processes across the value chain. This enhances productivity via informed decision-making, and with predictive analytics, minimises potential unforeseen risks, thereby safeguarding critical assets & increasing uptime.
Mining: The mining industry is a highly energy-intensive sector. Digital technologies can help in creating uninterrupted cleaner power solutions as an alternative to more polluting diesel generators. The solutions build digitalised power infrastructure and unify various power assets, including microgrids, energy storage systems, renewable electricity generation and microgrids with conventional thermal power generation to offer cost-effective sustainable power solutions even in remote areas that face energy access challenges. Industrial automation in the mining sector also entails the deployment of digitally connected prefabricated e-house modules with remote monitoring capabilities that helps in efficient energy distribution. Repeated mining activity reduces asset life, decreases efficiency and creates the chances of operational & mechanical failures. AI and IIoT driven digital solutions can anticipate and address performance issues, minimising risks and the chances of them transforming into critical challenges while ensuring timely maintenance cycles & improving asset life cycles.
Current challenges and the way forward
While the transition to industrial automation will benefit most sectors, there are pertinent challenges that companies face in making the jump. The major challenges faced by the industries in India and in any developing nation in making the transition to the industrial automation ecosystem include difficulties in technology access due to continuous global pandemic-driven disruptions that are impeding the scale & pace of transition; funding and cash constraints amidst an economic downturn, resource shortage and the mega challenge of upskilling & training the workforce to undertake the shift, implement technology-guided practices and operate in digital ecosystems. There is also reluctance to change and a gap in determining value for money or return on investment to adopt intelligent industrial automation solutions.
Going forward, by the time we become a 5G powered country in the next couple of years, it is imperative that there’s incentivising policies that encourage the transition of start-ups, SMEs and bigger enterprises to transition to Industry 4.0. There also needs to be greater partnerships with established tech companies that can enable the 360-degree transition of industries to automation. More collaborations and partnerships need to be formed with players who can provide a complete range of products & solutions that can meet the entire spectrum of industry demands, from programmable relays, motion controllers to interface modules & industrial communication to automation tools.
Industrial automation: A key enabler while sustaining transformation
The idea is to arm industries with a range of technologies that can minimise human intervention, track and monitor processes & controls, visualise performance & challenges, anticipate issues & raise an alarm or initiate due action and help operators make informed decisions. The overall objective is to empower manufacturing units to enhance operational efficiencies, reduce downtime & human errors, speed-up production & maintenance and apply predictive capabilities & diagnose potential problems while being cost-effective & ecologically sustainable. Industry 4.0 solutions can work like an augmented operator advisor that can provide real-time information at one’s fingertips, as and when needed. It also enables remote handling of systems.
In the ongoing decade, India’s road to self-reliance will primarily depend on its key sectors. Manufacturing being amongst the most important will play a crucial role and its industrial automation which will be a key enabler for it, while driving & sustaining the transformation.