View from India: Successful manufacturers will build to order, not build for stock
By 2025, India’s economy is forecast to be worth five trillion dollars. Manufacturing will contribute 25 per cent of gross domestic product and create 400 million jobs.
To deliver that growth, manufacturing will require competitiveness in infrastructure and innovation, along with cutting-edge technology and an industry-ready workforce. Seen futuristically, customers will require highest-quality products at the lowest price and manufactured in the shortest time.
“If India is to be a $5 trillion economy, manufacturing alone should contribute $1 trillion. Any manufacturing company with a current compounded annual growth rate of 17 per cent will be lagging behind over the next five-six years,” said Ravi Raghavan, managing director and CEO, Bharat Fritz Werner, speaking at the Manufacturing & Operational Excellence Conference 2018 organised by the Confederation of Indian Industry.
The manufacturing industry will be transformed through digitisation. Connectivity is the core of digital factories. Processes, products, communities and machines will be connected through IoT, artificial intelligence and machine learning. This will raise the bar for precision and production.
Given the scale of connectivity, tons of information will be released through big data analytics. It’s essential to glean readable data and channel it for predictive maintenance. This will help to eliminate escalating inventory costs for manufacturing units.
From the consumer point of view, the services and value-add rendered from manufacturing will be individualistic. Future products will be built to order and not built for stock. This personalised approach will happen through digital intervention. A case in point is the auto industry. For instance, when the driver enters a car, the car seat is adjusted according to their personal requirement. Likewise the music will be as per one’s choice. Information for individual preferences will come from data analytics.
In short, consumers will pay for the use of that particular product or service. “The selling price will be decided by the customers, and profit depends on the cost of manufacturing. This can happen as the supply chain will become innovative, without compromising on delivery and optimising costs,” declared B Indushekar, vice president and general manager, Volvo Construction Equipment.
Besides factories being connected digitally, device connectivity is another aspect that will impact manufacturing. “By 2020, it is estimated that the value addition coming from the Internet of Things will be be $1.9 trillion. With billions of devices connecting and digital manufacturing, it will lead to a scenario where the lines between virtual and real manufacturing will blur,” explained TR Parasuraman, deputy managing director, Toyota Industries Engine India.
Other technologies will also usher in a change in manufacturing. “3D printing will change the approach towards manufacturing. Precision-led models of engineering blocks will hasten assembly operations and lower costs. 3D printing can be integrated into diverse professions like biomedicals and nanoscience,” added Parasuraman.
The DNA or cutting-edge manufacturing is what makes or breaks the organisation. Operational excellence and people excellence are two sides of the manufacturing coin. Operational excellence needs to be understood in terms of concepts like lean and Six Sigma.
People excellence refers to an industry-ready workforce. Every product is becoming more connected by the day. As individuals we need to become part of this ‘smart’ change and drive it.
We are in a global village, where geographical boundaries are shrinking. Technology is global, but its implementation and methodology needs to be customised for the organisation. This becomes the core competence of the organisation.
It’s also an opportunity for manufacturing start-ups to leverage newer tech combinations. There can also be a situation when big companies will collaborate with smaller ones or even entrepreneurs.
The manufacturing fraternity needs to come together to share best practice and focus on sustainability.