The Covid-19 pandemic has accelerated the process of digital manufacturing, which is already underway globally and is now making its mark in India. Companies that saw it as an option, now understand it as a business imperative. Others in India --both Indian and multinationals--which are already on the digital manufacturing path, have accelerated their implementation. This is particularly true in the case of older facilities, which have been working on their modernisation for several years.
Brownfield facilities traditionally relied on heavy capital investment for upgrading infrastructure – essential replacement of operational but vintage assets. The existing pandemic has shrunk operating budgets and capital. But industry 4.0 technologies have made it possible to operate disparate factory assets by being digitally linked with new generation hardware and software systems at a fraction of the cost, according to research study ‘Digital Manufacturing in India’ done by Cdr Amrut Godbole, Indian Navy Fellow, Sagnik Chakraborty, researcher, cybersecurity studies programme, and Manjeet Kripalani, executive director, who all work at foreign policy think-tank Gateway House. The research study says the pandemic has thus compressed long drawn digitization plans from two years to just under a month during the pandemic – with immediate results visible.
The complex array of processes including 3D printing, computer-aided design, data analytics, artificial intelligence, simulation, virtual reality and sophisticated process management are collectively known as Digital Manufacturing.
The Piramal Glass experience
One such example is Piramal Glass, according to the Gateway House research study. The $330 million, Gujarat-based company is a global producer of moulded glass for the food, pharma, cosmetics and perfumery industries. When the pandemic hit, the demand for perfumes and nail polish bottles dropped, but the demand for food and pharmaceutical glass rose. This enabled the company to be classified as an ‘essential supplies’ provider and kept its operations running with a third of its workforce.
In short order, Piramal Glass had to innovate. For starters, factory hands could no longer use their electronic fingerprints to enter the facility. So, the company sourced facial-recognition software from a domestic start-up called Smart Infocomm. It had multiple uses – not just at the factory gate but also on the manufacturing line to alert the management on workers violating masks and social distancing placement in the factory
Samit Datta, global chief supply chain and technology
officer at Piramal Glass says that typically, brownfield manufacturers that operate different generations of machines and are looking to upgrade, will replace all at one go. However, they need to think counter-intuitively to optimise capital, and instead use digital technologies to upgrade. “This creates the foundation for their Industry 4.0 transformation also,” says Datta.
Datta used his own advice well. Piramal had planned to commission a new glass furnace, which was to increase capacity from 100 to 145 tonnes per day (tpd). Normally, 10 experts would come from Europe to install the furnace and commence operations. Instead, Piramal tapped into augmented reality using smart glasses most of it procured locally. The furnace was operational in one month. Augmented reality was used for quality assessment too. Foreign customers who would normally be sent physical samples of glass, were able to inspect their purchases via augmented reality. Piramal had to change the existing on-site operations of its plant to allow for remotely controlled functioning. In seven days, its in-house tech team developed a work-from-home infrastructure to operate the plant remotely, adding on the existing Internet of Things
(IoT) stack4 – i.e. technology, standards and applications - for the manufacturing process. The success was encouraging, and Piramal decided to accelerate its transformation through data analytics. In July 2020, the company hired a top management consultant to guide the process as also 11 new data engineers and scientists.
Piramal Glass’ transformation has been impressive. In recognition of its inherent business value and accelerated digital journey, the U.S. private equity firm Blackstone acquired a controlling stake in Piramal Glass in December 2020.
Another brownfield success story, of an old factory becoming a new digital player, is that of Siemens
India, according to the Gateway House research study. Its factory outside Mumbai, in Kalwa, is 47 years old and makes low-voltage switch gears. In 2016, with an eye on India’s growing market and exports, the factory was put on the transformation path, to reconfigure manufacturing lines and double the number of product variants manufactured there to 180. This was done using a proprietary digital twin software and Mindsphere - a cloud and IoT (Internet of Things)-based operating system developed by the parent company in Germany and resulted in a 20 per cent productivity gain for the facility.
With Covid-19, the factory was locked down. In July, when production could begin again, it was with just 30 per cent of its workers. Using the digital twin that already existed, Siemens
Kalwa’s engineers reconfigured the production line to accommodate the new rules, especially social distancing for the assembly line workers, and get back on track.
Hemant Narvekar, factory head, Siemens, Kalwa led the effort. He said that the new norms compressed timelines and expense as they “could be quickly simulated and tried in the virtual environment, before executing them in the real world," says Narvekar.
The ecosystem for digital manufacturing in India is now visible, says the Gateway House research study. It isn't as deep as it is in the West or China but is developing breadth and depth. Four elements of this ecosystem are in place: the digital infrastructure, government schemes, academic learning, and a burst of start-ups.
A significant part of the digital infrastructure has been laid by India Stack, an open-source services platform and application programming interface, developed by a public-private partnership as a public good. It is free for entrepreneurs, small and big business, government and developers, to build their products on. During the pandemic, this platform singularly helped the Indian government disburse funding and subsidies to individuals and entities across the country, instantaneously and at low cost.
This platform is being used to build and scale up new ideas. It will help India move beyond services to products, says Sharad Sharma, founder of iSpirt, the non-profit which created India Stack. If the transition is smooth, India can become like Korea – a high-value design and product manufacturing powerhouse. While services will continue to be the big employer, Sharma foresees manufacturing becoming advanced – and creating the kind of value that companies like Piramal Glass have done, and beyond that. India will finally leave behind its jugaad or make-fix era.
To capture this nascent and promising trend, the government has moved swiftly. November 2020 saw a $20 billion incentive scheme for 13 competitive sectors of manufacturing to create domestic self-sufficiency, says the Gateway House research study. In addition, a serious effort is underway to create supporting institutions for manufacturing and for the micro, small and medium enterprises (MSMEs), which comprises over 90 per cent of Indian business. Nitin Gadkari, India’s infrastructure and MSME minister, said on December 15, 2020 that he expects MSMEs to create 50 million new jobs over the next five years, and contribute 40 per cent to India’s GDP (gross domestic product), up from 30 per cent now.
To make this happen, new initiatives like Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) by the Ministry of Heavy Industries, have begun. One such government initiative in Pune is C4i4, which provides a transformation road map for its customers, both MSME and MNC. C4i4 offers coaching and consulting specifically for manufacturing MSMEs that are looking to digitise. During the pandemic, demand for its services have grown by 30 per cent, not just from small businesses but big exporters too.
Dattatraya Navalgundkar, executive director at C4i4 Pune, says, the pandemic has accelerated the adoption of digital technologies across the value chain. “Although MSMEs face cash flow challenges, lack trained manpower and expertise, they need business continuity and are eager to start the digital transformation journey,” said Navalgundkar.
Multiple government schemes like Make in India, Start-up India and Digital India, initiated in 2014, had seen a limited response. But 2020 saw a surge of digitisation, intra-company and in start-ups.
The start-ups already established pre-Covid 19, have seen bustling business. One such example is ClairViz Systems, a technology
company providing cutting edge solutions for digitization of manufacturing industry. Its co-founder Aditya Vermani, an engineer who worked with India’s engineering giant Larson & Toubro, says that digitisation which was seen as a ‘Good to Have’ feature in the pre-Covid 19 era, is now an imperative. “Despite factories running at 30 per cent, manpower, digital work instructions and maintenance gained traction. We were able to maintain our revenue growth, in the constrained financial environment,” says Vermani.
State-owned oil refining giant Hindustan Petroleum was among Clairviz’s first clients. It had installed and monitored sensors at the company’s Mumbai refinery and oil depots, resulting in improved regulatory compliance.
Another company that is seeing an acceleration in the adoption of digital manufacturing is Chizel, a B2B cloud platform for the manufacturing of plastic and metal parts, that works with SMEs. This three-year-old Pune-based start-up calls itself the Amazon for manufacturing services
Yash Rane, CEO at Chizel, says that manufacturing shops are shifting to cloud-based, mobile-first accounting systems and human resource solutions, and to IoT devices to track machine performance. “Although they look like small adoptions, they are laying a solid foundation for the next wave of transformation. In very short order, digital manufacturing will become the new normal,” says Rane.
The study was funded by the Export-Import Bank of India (India Exim Bank). David Rasquinha, managing director, India Exim Bank said disruptive technologies have created a new realm of opportunities, in today’s increasingly interconnected and complex world. Traditional businesses need to transform into digital enterprises to meet the changing needs of their customers, and stakeholders, while remaining cost-effective and competitive.
“A digital transformation— one that’s real-time, intuitive, automated, secure, and open— is imperative for businesses to survive in this highly competitive world,” says Rasquinha. “MSMEs would remain the key enablers in driving Industry 4.0 while playing a vital role in this journey of transformation of the Indian manufacturing sector.”