The digital enterprise – Thinking further Indian industry
As the world moves towards Industry 4.0, India will have to move with it. This means that we will need to adopt and adapt new technologies in our manufacturing throughout our supply chains. The industry aims to increase the contribution of the manufacturing sector from 15% to 25% of GDP, in the near future. In order to support this growth, India will need an ecosystem comprising Tier 1, Tier 2 and Tier 3 suppliers, with a high level of efficiency, flexibility and quality.
By using digital technologies to combine the virtual and real world of production, industries can master the ever-increasing challenges of their very dynamic markets. Digitization promises lower costs, improved production quality, improved flexibility and efficiency, shorter response time to customer demands and market demands, and also opens up new and innovative business opportunities.
The integration and interaction of Product Lifecycle Management (PLM), factory automation and digitization that form the basis of Industry 4.0 will be key to the sustainable progress of the manufacturing sector. , equated with the future of manufacturing (FOM).
Industry 4.0 will mean new ways of creating value and new business models. It will transform the design, manufacture, operation and service of products and production systems. Connectivity and interaction between parts, machines and humans will make production systems up to 30% faster and 25% more efficient and take personalization to new levels. Digitization will have a major impact and redefine “productivity” criteria and metrics through real-time digital supply chain, digital product definition and digitally designed and managed production lines.
Read also: Digital twins: generating unprecedented efficiency gains in Industry 4.0
The Digital Enterprise Software Suite provides an integrated portfolio of industrial and automation software solutions for the discrete industry. This allows product manufacturers, machine builders and line builders to integrate and digitize their entire value chain, including their suppliers. It’s already a reality, and companies are harnessing the benefits and opportunities of it through digital transformation, which requires seamless integration of big data throughout the manufacturing value chain.
Digitization must be a priority for management at two levels: On the one hand, companies must align their offer to reflect Industry 4.0 and add digital solutions and services to their portfolio. On the other hand, they must transform and adapt their internal processes to meet the demands of digitization. In India, while some of the big companies have quickly made the transition to this digital world, the majority of small and medium-sized enterprises (SMEs) in the manufacturing sector have yet to put these digital technologies to work.
SMEs are the backbone of industrial development. The contribution of small industry has been remarkable in the industrial development of the country. It has a 40% share in industrial production. 35% of the country’s total exports of manufactured products are directly attributable to this sector. In terms of jobs generated, this sector comes just after agriculture which employs around 36 million people.
Although SMEs occupy the majority of the industry, they are currently facing multiple issues that are hampering their growth. The most critical issue for SMEs is continuous improvement in quality, scope and scale. Some of the main factors responsible for this situation are the extensive manual interventions in the processes, the interruption of the data flow and the lack of skilled manpower. There will be sustainable development of manufacturing only when the SME sector participates with improved technology and skills.
Through digitization, SMEs can improve their efficiency to tackle scale, reduce production costs, minimize manufacturing defects and shorten production times. With this, they can not only meet international quality standards, but also strengthen their position as competent suppliers for the global market.
Read also: What jobs is India’s digital revolution generating?
There are already some examples, especially in the automotive sector, of Indian companies that have used modern technology to improve their competitiveness. Over the past 4 decades, the advancement of the automotive industry has facilitated the growth of a large ecosystem of SMEs. By addressing the automotive industry, their standards were raised and their quality improved. In addition, they have invested in their manufacturing processes and now the same SMEs supply to several car manufacturers.
In addition to partnering with our customers on their journey to digitization, Siemens India also opened its digitalized low voltage switchgear factory showcase in Kalwa in 2017. The upgraded factory using technology from Siemens’ digital enterprise is the most advanced switchgear manufacturing plant in India and is aligned with government initiatives “Make in India” and “Digital India”.
Here all data is transformed into a digital format. It is a fully digital workshop that starts at the product R&D level through manufacturing simulation, then the construction of the manufacturing facility from the optimized and simulated product and plant data. This is what makes it unique.
The global benchmark plant is capable of producing more than 180 variants on a line at the rate of one product every nine seconds. The factory’s products communicate with the machines and all processes are optimized for IT control, resulting in a minimal failure rate.
Read also: Why the implementation of Industry 4.0 is becoming an imperative
The production methods deployed in the factory are expected to be a standard for small and medium-sized manufacturing units in India, realizing a visionary model for the future of manufacturing: end-to-end digitalization where the real and virtual worlds merge into “Digital Factory“.
Indian manufacturers have the unique opportunity to combine the availability of advanced manufacturing technologies with low labor cost to create an extraordinary competitive advantage. The need of the hour for SMEs is to take the lead in adopting new technologies and making them an integral part of their business strategies. Those who succeed in understanding the power of digitalization and harnessing it across their businesses will lead this new wave of growth.
(The author is Managing Director and CEO of Siemens India)
(This is the second column of a three-series article on Digitizing and Manufacturing by the author, stay tuned to this space for more.)