Time flies! It’s ten years since the term “Industry 4.0” was first used by the German government to articulate its strategy to enhance the competitiveness of the country’s manufacturing industry. The concept gathered momentum after it became a key theme at the World Economic Forum in 2016. Adoption in India has been slow thus far, but that will change soon.
The rise of Industry 4.0
The last decade also witnessed the emergence and maturing of a wide range of digital technologies, computing capabilities and application areas. These include AI and Machine Learning, Robotics, 3D Printing, Data Sciences and Analytics, Cloud, IOT, Augmented Reality etc. While data processing and computing capabilities have grown exponentially, unit costs have decreased just as rapidly.
It is the confluence of the above-mentioned trends that has led to the thinking behind Industry 4.0 and its cousins, “digitalization” and “4th Industrial Revolution”, make its way into the C-suite and documented strategies of many companies worldwide. In India too, I4.0 has started gathering momentum in the last couple of years, although the rate of adoption is still relatively slow.
Indian companies too will increase the pace of I4.0 adoption in the next year or two as a result of both internal and external imperatives. For instance, in the automotive industry, as global players embrace I4.0, India-based suppliers will need to ensure that they keep pace with rising expectations around traceability requirements and quality norms. In addition to improving asset utilization, IoT solutions can also help companies address the challenge of shrinking supplies of skilled human resources for shop floors and assembly lines.
As companies face a squeeze on margins (something that the ongoing pandemic has further compounded), the competitive pressure to reduce costs sustainably will only increase. In industries such as manufacturing, logistics and construction, adopting Industry 4.0 paradigms will help cut down waste, improve productivity and reduce carbon footprint.
Adoption in India remains limited
There is reasonable awareness amongst Indian manufacturing companies around how Industry 4.0 will be a game-changer for early adopters as well as adoption intent.
The government of India too has taken steps to encourage adoption of I4.0. In addition to an enabling framework, the Department of Heavy Industries has set up Samarth Udyog Bharat 4.0 (Smart Advanced Manufacturing and Rapid Transformation Hubs) to create awareness and propagate an ecosystem of technology solutions. The rollout of 5G communication protocols in the next year or two is further expected to accelerate the shift, as it will make the use of IIOT more viable and more efficient. However, actual activity towards adoption remains constrained by many factors such as these:
- Limited understanding of Industry 4.0 and its value as an important step towards long-term transformation of the entire business (and not just from an operations angle);
- Inadequate clarity around the expected business value and prioritization (based on what problems need to be solved);
- Appreciation of dependencies caused by existing systems, architectures, and availability of good quality data of the desired granularity;
- Concerns around data security;
- Lack of a detailed plan and a well thought out long-term roadmap; and perhaps above all,
- The perception that adoption of Industry 4.0 solutions is necessarily a large and complex program that requires massive investments (with unclear RoI). This reinforces the belief that I4.0 is only for the larger companies or those that have deep pockets- something that is erroneous.
In recent days, we at sfHawk are seeing a perceptible shift in gears. Large players as well as SMEs are engaging more willingly and with higher levels of seriousness than before, to understand how Industry 4.0 solutions can help them. The scope of our conversations with automotive OEMs and auto component suppliers has expanded from production monitoring or OEE improvement to enabling traceability, tool cost optimization and predictive maintenance.
Manufacturing companies may not always possess the required levels of technical expertise to efficiently integrate Industry 4.0 solutions. That is why we at sfHawk encourage companies to articulate their problem statements in the form of easily-understood use cases. We then work with them to provide solutions for those use cases. The value is demonstrated using pilots that can then be scaled up. We believe that companies must look for solutions that, in addition to addressing their immediate needs, are scalable to address future needs as well.
We know that large-scale shifts such as adoption of Industry 4.0 paradigms are disruptive to the culture of the organization. This is especially true for manufacturing businesses in India, where there has been long-standing distrust between owner-managers and workers. Adopting the right Industry 4.0 solutions will lead to a reduced dependence on human judgement. This reduces the risk of human errors of omission or commission that, in turn, increase setup time or material wastage. However, if the buy-in of workers is not gained by explaining the rationale for embracing I4.0 and benefits to all stakeholders, adoption will only become more difficult. This is an important aspect that business leaders must factor into their plans to embrace I4.0.
If you have additional insights to share based on your I4.0 experience, we’d love to know: please post a comment or write to us.
