EY IoT and Manufacturing 2020 Will-The-Next-Transformation-In-Manufacturing-Be-Led-By-Digital (26642)
EY IoT and Manufacturing 2020 Will-The-Next-Transformation-In-Manufacturing-Be-Led-By-Digital (26642)
EY IoT and Manufacturing 2020 Will-The-Next-Transformation-In-Manufacturing-Be-Led-By-Digital (26642)
transformation
in manufacturing
be led by digital?
Status of digitization and
smart factory in India
March 2020
Digital Manufacturing in India
2
Table of
content
Digital Manufacturing in India
3
Foreword 05
Survey methodology 06
Executive summary 08
Digital Manufacturing at EY 40
EY contacts 44
Digital Manufacturing in India
4
Digital Manufacturing in India
5
Foreword
Ashish Nanda
Partner and Leader
Supply Chain Advisory Services, EY India
Technology plays a critical role in today’s world and companies are gaining competitive
Smart Factory: way forward
6
Digital Manufacturing in India
7
Survey methodology
The report, Will the next transformation in manufacturing be led by digital?, studies the evolution of the
manufacturing industry in India and gauges how government initiatives and technologies are helping reshape the
manufacturing setup in the country. The report also tries to capture the points of view of industry leaders in the
manufacturing sector, analyzes their key investment priorities, challenges and technological readiness. It outlines
how digital manufacturing can enable the creation of sustainable and digitally-empowered organizations.The
report incorporates first-hand perspective of the leaders of major manufacturing firms in India as part of a primary
survey conducted by EY India. The findings are combined with extensive secondary research and analysis for a
comprehensive perspective.
Respondents’ profiles: During the primary research, EY interacted with approximately 50 leaders of large
manufacturing organizations, including the COOs, CTOs/CIOs, and chiefs of manufacturing, quality and operational
excellence, in the pharmaceutical and healthcare, automotive, consumer goods, industrial manufacturing and
chemical sectors.
Digital Manufacturing in India
8
Executive
summary
01
Digital Manufacturing in India
9
The global manufacturing industry is at the cusp of a paradigm shift led by advanced technologies in manufacturing
processes. Firms in developed nations are increasingly focusing on becoming more digital with the deployment of
intelligent technologies to concentrate on producing smart products. In emerging markets too, companies have also
started leveraging advanced technologies by using operational excellence techniques to remain competitive.
The Indian manufacturing industry is beginning to explore new advancements in technology, such as data and analytics,
Internet of Things (IoT), Robotics, and three-dimensional (3D) printing to drive changes for the benefit of their businesses.
The merger of the physical and the digital world has enabled real-time visibility and control of manufacturing units across
the value chain and has opened a new set of opportunities and challenges.
Within India, many medium and large companies have initiated proofs of concept (PoCs) across multiple domains including,
energy, maintenance, dash-boarding, optimization, and analytics. However, these developments are still in their nascent
stages and there is a lot to achieve. The Indian manufacturing sector continues to remain apprehensive about the benefits
of embarking on an end-to-end digital journey.
The industry is uncertain about what constitutes a Smart Factory. Leaders in the manufacturing space have varied
interpretations and concepts on what the future holds for them. For Smart Factory to be a widespread success, there is a
need for entities to have a consistent vision on the concept and for the ongoing PoCs to deliver promised results.
According to World Bank, India emerged as the world’s sixth-largest1 economy in 2017. India’s manufacturing sector
only accounts for 18.3% of the country’s GDP as compared to 29% in China, 21% in Germany, 28% in South Korea and
20% in Indonesia. However, the sector has come a long way since independence2. The government has tried to develop
manufacturing through Industrial Policy Resolutions (1956, 1977, 1980, 1991) and Five-Year Plans. The National
Manufacturing Policy outlines a vision to make India a manufacturing hub and is supported by other flagship schemes such
as Make in India’, Skill India and Startup India. The Government of India (GoI) has also recognized the unmet potential of
India’s manufacturing prowess and has set an ambitious target of increasing contribution of the manufacturing sector from
the current level of 16% to 25% of GDP by 20223.
Digitization continues to transform manufacturing processes around the world through transformational technologies such
as IoT, Artificial Intelligence, Additive Manufacturing and Advanced Robotics. These technologies help companies achieve
efficiency and productivity gains and drive quality improvement and customizations. The adoption of digital technologies in
India is still in its infancy, considering manufacturers have started leveraging these technological advancements recently.
EY’s Digital Manufacturing – India survey reflects the views of industry leaders from the country’s manufacturing sector on
recent technological advancements and their adoption. These views refer to digital manufacturing strategy, its readiness,
key challenges and benefits.
The survey highlights that a significant proportion of manufacturing organizations in India do not have a well-defined
strategy or a prescribed budget on digitization and have a limited understanding on the subject. These organizations also
face various challenges including a lack of integration of hardware, software and data infrastructure, digital systems and
decision intelligence capabilities. Due to their limited awareness, most firms are still unclear about the economic benefits
and impact that they can achieve through targeted investments.
1
Bloomberg Quint, https://www.bloombergquint.com/global-economics/india-overtakes-france-as-worlds-sixth-largest-economy-world-bank#gs.2hazuc, 11th June 2018
2
The World Bank report, https://data.worldbank.org/indicator/nv.ind.manf.zs?end=2017&start=2017&view=map
3
India Brand Equity Foundation, https://www.ibef.org/industry/manufacturing-sector-india.aspx, December 2018
Digital Manufacturing in India
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Recognizing the importance of digital manufacturing, some Indian firms have started enhancing their digital infrastructure
and have upskilled their workforce. According to EY’s survey, organizations feel that digital manufacturing would provide
benefits such as improvement in overall monitoring and measuring of key performance indicators (KPIs). It would also allow
tracking and tracing of products across the value chain and lead to better quality products. However, the Indian industry
has taken baby steps in transforming the shop floor. Digital manufacturing presents a huge opportunity for firms to adopt
innovative and emerging technologies, and leap frog to a different level of maturity and enable them to be recognized
amongst the best in the world.
Some Indian industries in the past have leveraged technological innovations to catch up and even surpass similar industries
in the developed world. Digital manufacturing may well be that lever that can propel Indian manufacturers into a higher
orbit of operational performance.
Digital Manufacturing in India
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Digital Manufacturing in India
12
Manufacturing
landscape in
India
02
Digital Manufacturing in India
13
The manufacturing sector in India has come a long way since independence and has been instrumental in driving economic
growth through productive employment, reduction of import bills, and contribution to the country’s GDP. Adoption of Five-
Year Plans, abolition of industrial licensing, price controls and the virtual elimination of monopoly law has led to the gradual
evolution of the manufacturing sector in India over the past decades.
Keeping in mind the manufacturing sector’s potential, the Government of India has envisioned its prominent role in the
coming years as outlined in the National Manufacturing Policy (NMP).
In line with the goals outlined under the NMP, the Government of India has also introduced initiatives such as
1) Make in India 2) Startup India 3) Skill India.
Launched in 2015 to train ~400 million people in various vocational and technical training. Set up of
National Skill Development Agency (NSDA), National Skill Development Corporation (NSDC), National
Skill Development Fund (NSDF) and 38 Sector Skill Councils. As of November 2018, ~36.22 lakhs
candidates have been enrolled under Pradhan Mantri Kausal Vikas Yojana.
Campaign launched in January 16 with an intent to build a strong ecosystem for start-up
businesses in India directed at new start-ups to avail regulatory and tax benefits, capital gains tax
exemption and access to government funding. Government has set aside an economic stimulus in
the form a INR 10,000 crore fund of funds managed by Small Industries Development Bank of
India (SIDBI), with the goal of increasing funding opportunities.
Source: MakeinIndia webpage, Skill India webpage, Hindu business line, Jan’19, Startup India webpage
4
Department of Industrial Policy and Promotion website, http://dipp.nic.in/sites/default/files/po-ann4.pdf accessed on 4 November 2011
Digital Manufacturing in India
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Evolution
of Digital
Manufacturing
03
Digital Manufacturing in India
15
Smart factories can add US$500 billion5 in value in the next three years
Historically, the shop floor has been changing through the introduction of new technologies to speed up manufac-
turing of products. Most companies have been leveraging automation, workflow, transactional systems (ERP) and
bespoke applications to run various processes. These companies have also been pursuing operational excellence
programs to continually improve their shop floor practices and performance. However, these efforts are no longer
delivering the expected changes at the required scale. To remain competitive, manufacturing companies need to
accelerate the pace of innovation and change their smart technology toolkits. Manufacturers, today, need accurate
and timely data to manage their performance effectively. An integration of real-time operational data of operations,
machines, materials, and operators plays an important role in gathering required insights and taking the right deci-
sions to improve performance. This integration also results in the better use of production capacity, ensure on-time
delivery, tighter cost control and optimized labor productivity.
Globally, manufacturing is undergoing a transformation due to the promise of Industry 4.0-related innovations. As
the fourth industrial revolution gathers momentum across the globe, industry leaders across the public and private
sectors are confronted with a new set of opportunities and challenges. These efficiencies and challenges are around
production, growth and sustainability. Rising competition, increasing cost pressures and the need for eliminating
losses are forcing manufacturers to explore advanced computing capabilities. There is a need to have an environ-
ment that facilitates interconnectivity between critical components, monitoring of the entire ecosystem and optimi-
zation of decisions based on data from the monitoring system. The adoption of emerging technologies from Industry
4.0 promises the linkage of end-to-end value chains (including those of suppliers and customers) and unlocking new
data-driven business models.
This convergence of digital technologies and cognitive computing techniques are key enablers of the fourth industrial
revolution, which is characterized by digitally-enabled smart factories. It is expected that smart factories will poten-
tially add US$500 billion5 in value to the global economy by 2022. Global automakers, manufacturing conglomer-
ates and others have already started ramping up their manufacturing functions by deploying advanced technologies.
A Smart Factory is defined by the co-existence of cyber-physical systems that enable ease of monitoring, experimen-
tation, automation, and faster/accurate decision-making.
Cost economics and competitiveness in manufacturing are fundamentally changing the way business is done. With an
empowered consumer base now dictating supply and demand, increasing level of product customization, accelerated time
to market pressures, rising global competition and the continual rise of the internet and mobile economies, manufacturers
are able to make real-time decisions by leveraging data and information.
Digital Manufacturing in India
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Predictive maintenance
Focus on continuous monitoring of machines and equipment to ensure continued
operations while reducing unplanned downtime and redundant costs.
Source: EY analysis
Digital Manufacturing in India
18
Digital
Manufacturing
Survey results
04
Digital Manufacturing in India
19
EY conducted a comprehensive survey of industry leaders and this section presents its findings. The findings highlight the
understanding, preparedness, status, expectations on benefits, and key technologies from a Smart Factory initiative. We
present the findings that may be useful for manufacturing companies to model their digital manufacturing strategy and
implementation.
Indian firms in the manufacturing sector are gradually starting their digital transformation journey. Companies are
implementing various PoCs for achieving a more agile, flexible and interconnected manufacturing process. However,
businesses are facing challenges while scaling up the PoCs and in some cases, it has not yielded desired results. A principal
reason for this inability lies in the absence of a well-thought-out digital manufacturing strategy with a holistic view on
business needs, digital maturity, long-term infrastructure creation, interconnectivity, feasibility of sensor installations,
workforce capabilities, financial benefits, cyber risks, and change management.
An analysis based on the responses of representatives from companies presents a mixed picture regarding adoption of
Digital Manufacturing in the industry. Very few of our survey respondents highlighted that they have well-defined strategy
and a specific budget for digital manufacturing.
We have not started We have some idea We have a clear cut We have a clear cut
thinking about Digital but not a clear cut strategy and a strategy, budgetary
Manufacturing strategy defined budget allocation and
implementation is
in progress
Source: EY Digital Manufacturing India Survey 2019.
To successfully implement a Smart Factory initiative and address the issues that businesses face today, it is necessary to
have an integrated strategy that identifies key functions, specific areas and technologies. Companies often start with a
comprehensive assessment of its digital maturity across the manufacturing value chain. The outcome of this exercise is
a clearly defined roadmap for various initiatives. It also lays down the phasing of initiatives depending upon the possible
benefits, complexity of solutions, probability of success, and opportunities for scaling-up. The roadmap also defines key
strategic elements related to technology such as, platforms, inter-connectivity, solutions, and protocols which form the
basis of a successful Digital Manufacturing initiative.
Digital Manufacturing in India
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For Digital Manufacturing to be effective, it is important for companies to augment their infrastructure (hardware,
software, connectivity, analytics). These companies also require an appetite for multi-disciplinary transformation
programs. While technology is the backbone of Digital Manufacturing, its integration with operations is critical to achieve
the desired improvements in performance. Adoption of advanced manufacturing techniques are likely to enable Indian
manufacturers to remain cost competitive and gain a competitive edge globally. The changing global and Indian scenario
is making it crucial for the industry players to consider leapfrogging technological levels.
Our survey results show that most Indian manufacturing firms still lack advancements in their hardware and software
capabilities. Only 29% of firms indicate that they have appropriate hardware and software infrastructure with data capture
and monitoring capabilities. Most firms surveyed did not have an intelligent hardware and software in place.
9% 63% 20% 9%
Despite the lack of technological advancements, Indian firms showcase a strong willingness to adapt and manage the
change for technology infusion. Based on the survey results, only 29% of organizations are in the process of enhancing
their digital infrastructure and upskilling their workforce. Some firms have already taken a lead in Digital Manufacturing
adoption.
Digital Manufacturing in India
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Digital Manufacturing promises to substantially alter the shop floor by creating a paper-less environment. It has the
ability to take vast amount of information and can work on smart device. They can help decision-makers engage in faster
decision-making by understanding advanced analytics and IT systems.
In a Digital Manufacturing environment, companies would need to define what information is available to whom and
corresponding actions required from recipients of information. In a Digital Manufacturing environment, there will be
distinction between machine-specific tasks and analytical tasks, such as collection of data, analysis developing insights
and taking decisions. Normally analytical tasks would be done by supervisors, shift in-charge and sectional heads.
Therefore, white-collared workers would become adept at analysis and optimization whereas blue-collared workers would
be more focused on the execution.
Digital Manufacturing in India
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In what technologies would you like to invest in in the next one or two years
(based on the ranking, with rank 1 being the most important) to transform your
current manufacturing process?
Cloud/Integrated
Platforms 33%
Robotic Process
Automation
33%
Artificial Intelligence/
Machine Learning 31%
Rank 1 2 3 4 5
There are plenty of use cases in different industries that have used advanced sensors for additional data collection and
Big Data Analytics to achieve multiple objectives. They include, yield and quality improvement, condition based predictive
maintenance, throughput enhancement, analyzing product failures, and product design. Auto, auto-components,
consumer goods, life sciences, oil and gas, industrial products, chemicals and heavy engineering are some industries that
are taking the lead in Digital Manufacturing.
Digital Manufacturing in India
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What areas do you think would your company benefit the most while adopting
Digital Manufacturing (based on the ranking*)?
Rank 1 2 3 4 5
Globally, the manufacturing industry is at the center of a digital transformation and is seeking to exploit, disruptive
information technologies, such as Cloud, Big Data, Artificial Intelligence and Internet of Things. While the most popular
manufacturing technologies focus on monitoring, visualization, track and trace, and easy implementation, there are
bigger potential benefits with process optimization and preventive and predictive maintenance. Although the technology
is tough to implement, International Data Corporation (IDC) data highlights that 62% of global manufacturing businesses
are looking to digitally transform through process optimization.
Digital Manufacturing in India
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Identify the key challenges and risks associated in adopting Digital Manufacturing.
A typical shop floor in India is beset with lot of archaic practices and old ways of performing work. The intricacies associated
with manufacturing, highest number of employees, a vast number of contractual workers, and low academic qualifications
of workers makes the environment of an Indian shop floor challenging. Besides that, multiple plants spread geographically
in remote areas, ageing machines and lack of basic automation pose challenges. In such an environment, transforming the
shop floor using digital technologies may be challenging. Most manufacturing companies in India have adopted a wait-and-
watch approach. Only a few are convinced about taking up a holistic Smart Factory initiative.
Digital Manufacturing in India
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What is the level of integration available for IT hardware, software and data
architecture in your organization to realize gains from Digital Manufacturing?
Integration between OT and IT is clearly low in a typical Indian factory environment. This integration is likely to be
foundational for Digital Manufacturing to succeed. Usually, machines from varied manufacturers and eras would have
very different protocols. As a result, accessing, collecting and analyzing data, would require huge efforts for system
integration. In an environment where economic returns from Digital Manufacturing are not well-established, companies
are reluctant to spend for technology integration.
Digital Manufacturing in India
26
14%
3% We have started building a small Excellence team
Having a strong excellence program would be vital for success in Digital Manufacturing. Analytical models need stability
of inputs and processes to predict outcomes. Autonomous systems can only work in a precise and predictable world.
Companies need to give sufficient attention to Operational Excellence initiatives while embarking on a digital journey.
Digital Manufacturing in India
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Does your organization have any digitized means to support, manage and run
Operational Excellence programs?
23%
We do not have any formal Excellence program
It is essential to have integrated digital applications to assist Operational Excellence teams. Within Operational Excellence,
companies have tried to enable technology for only some aspects, such as, trainings and program management. Of
late, digitized cloud-based intelligent tools to organize various Operational Excellence techniques and practices through
maturity-based models are available. These tools also assess current state on various parameters, guide improvement
journeys, quantify practice maturity and track KPIs. Digital platforms are likely to simplify and enhance the improvement
journey through standardization and categorize the vast toolkit as per needs and stages of an improvement journey. A
good digital platform may help significantly reduce dependence on a central team of experts and may act as a “virtual
coach” to enable employees to adopt a continuous improvement culture.
Digital Manufacturing in India
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57%
1-2 years
31% 2-3 years
>3 years
12%
What benefits can Digital Manufacturing bring to your operations set up within a
horizon of two to three years in terms of cost rationalization (COGS)?
29%
26% Upto 5%
5%-10%
28% 10%-20%
20%-30%
9% >30%
8%
In our view, Digital Manufacturing is a big lever to improve efficiency and effectiveness within the shop floor. Globally,
companies who have implemented full-scale digital solutions within manufacturing have reaped returns between 20%-30%.
However, there is a need to implement such solutions prudently after understanding the pros and cons. While there are
quantifiable benefits to be achieved from the implementation of Smart Factory, there are plenty of qualitative benefits that
could boost the operations indirectly. These benefits include reduction in wait time, improved visibility across the chain,
capability building across the hierarchy and functions, and faster decision-making.
Though Digital Manufacturing is in its early days of implementation, it is expected that once Smart Factory gets embedded
within the industry, data collected would enable stakeholders to make the right decisions and enable improvements in
performance significantly.
34%
46%
17% Not prepared at all
3%
Limited: we have started on preparing our eco-system
to adopt digitalization
Developing: we have a clear roadmap to develop our
suppliers to support the digitalization journey
Mature: we have actively worked with our suppliers and
vendor to support our digital agenda
Digital systems, with their improved computing capabilities, are able to process large amounts of data and show real-time
status of raw materials, work in process and finished goods. This provide better forecasting, planning and execution. All
this is leading to a collaborative environment. Apart from a supplier-customer interlinking, even vendors associated with
capital goods and other accessories are accessing real-time data of their equipment installed at customer premises and
giving vital insights on the performance of machines. This, in turn, aids them to optimize the next set of machines and
provide information to manufacturers on how to operate and maintain their machines for maximum efficiency.
Digital Manufacturing in India
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View from
the industry
05
Digital Manufacturing in India
31
This section presents views from senior leaders in the Indian manufacturing industry on how Digital Manufacturing will
shape the future.
" Today Digital Manufacturing technologies are being used for just dash-boarding and
improving controls for the top management. Bigger benefits can be achieved if we use
these technologies for simplifying and de-stressing life at the shop floor. Judicious
use of emerging technologies to make a day in the life of an operator simpler would
enable them to focus on value-added activities. While you must have a Ferrari if you
want to win Formula 1, having a Ferrari alone will not ensure that you win the race.
To obtain the right impact, it is therefore imperative to integrate operator experience
with the best automation and digital solutions.
Prashant Sharma, President, Group Manufacturing and Operations, Zydus Cadila
" Digitizing the value chain is one of the top priorities of the operations-strategy
agenda in manufacturing companies. The key is to ensure seamless integration of
connectivity, intelligence and automation along with skill-building to achieve impact
and cultural transformation to sustain it. Progressive organizations are moving from
piloting of point solutions to delivering sustainable impact.
Jason Gonsalves, Senior VP, Corporate Planning, IT, Materials and HR, Kansai
Nerolac Paints Ltd.
Digital Manufacturing in India
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" Digital Manufacturing is helping in improving productivity and reducing cost by shortening
life cycles, increasing energy efficiency, and in utilization of resources.
COO, Large Biotech Company
"
While Smart Factory seems to be focusing on backend operations, in reality, it seems to be
focused on customer centricity as it improves the reliability of processes and systems.
Practice Lead, Digital Manufacturing – Metals and Mining at a large IT company
" A company needs to work on technologies to empower its people, who work at the
shop floors, with tools to enable them to avoid human errors.
President, Manufacturing at a large life sciences company
Digital Manufacturing in India
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"Smart manufacturing, Artificial Intelligence and Machine Learning are expected to improve
processes and in future, they may lead to personalized treatment for patients.
Industry leader at a large industrial automation company
"
The fundamental problem lies in the lack of availability of expertise across emerging
technologies along with the fear of implementing a system based on these
technologies that manufacturing entities do not understand fully.
Vice President, Global Industry Federation
Digital Manufacturing in India
34
Adopting
Industry 4.0
Vishnu Bhavaraju
Director – Industry Solutions,
Manufacturing, Microsoft India
06
Digital Manufacturing in India
35
Q.1 How can businesses in India capitalize on the factory of the future?
How can the workforce be ready for it?
Factory-of-the-future brings end-to-end visibility within reach. By connecting existing assets and equipment across global
locations, manufactures can generate live performance data without disrupting their productions. With this information, a
business can gain insights into what is contributing to performance variation among factories, that can be used to optimize
performance across all sites. Today shop floor data is all over the place – manufacturing execution system (MES) may push
some data into enterprise resource planning (ERP); production, quality and utilization data is in shift logs (mostly papers)
and so on. Monitoring key metrics and decision-making suffers in such situations. Factory-of-the-future creates a real-time
feedback loop empowering plant personnel to manage and optimize operations in real-time.
This kind of insights-based real-time operations management requires a very new data culture. We are talking about data
and insights which were not considered to be the real-world scenario earlier. This requires awareness and imagination.
Whether someone is in production operations or maintenance operations, or is a plant head or an operator, everyone
should be made aware about the new possibilities with such insights. Roadshows and envisioning sessions like Microsoft
Future Decoded provide the opportunity for the workforce to see the factory-of-the-future technologies in live action.
Q.2 What are the key steps that a manufacturing organization must take in its
digital transformation journey?
Earlier, data was generated only when a business did a transaction with a customer or a supplier. Today data is generated
from every dimension. When someone posts a picture of their car on their Facebook, data is generated. When someone
starts driving their car, data is generated. Even when a robotic arm on an assembly line consumes energy, data gets
generated. The data from customers, products, people, and equipment creates the intelligence required to build
transformed experiences and it is those experiences that further provide data to refine interactions. We call this the digital
feedback loop. The digital transformation journey of a manufacturing company starts with discovering digital interventions
required in their customer life cycle, production cycle, and supply chain cycle. Once digital interventions are identified,
the organization must leverage digital technologies to implement those interventions, integrate data from these digital
applications and leverage the insights to further refine the digital interventions in a continuous process.
Q.3 What role can emerging technologies like Artificial Intelligence (AI), analytics
and Industrial Internet of Things (IIoT) play to transform manufacturing in an
organization?
Technologies like Internet of Things (IoT) and Edge Computing enable data gathering in the physical world, close to
the customers, people, products and equipment. Blockchain helps companies create seamless supply chains. Digital
technologies, like these, help manufacturing companies quickly deploy digital interventions for enhancing their customer
experiences, optimizing operations, empowering employees and transforming their products.
Analytics and Artificial Intelligence (AI), combined with customer relationship management (CRM), help complete the digital
feedback loop. AI and Analytics can monitor and predict product quality and performance, customer experience, reliability
and efficiency of equipment, and safety of people.
Q.4 Can you share some insights on ways to accelerate innovation in Digital
Manufacturing?
Rapidly changing customer behavior, dynamic markets and evolving industry structures make the future uncertain. Today
we cannot just extrapolate the past into the future. The future today is discontinuous, disruptive and different. Today’s
winning strategy is about creating the future. It requires rapid innovation that is not simply about technology, but requires
business leaders to reinvent their core, re-imagine their future and embrace a different way of bringing together people,
data and processes to create the future. This requires organizations to advance from running businesses on systems-of-
record to innovating businesses using the systems of intelligence. By embracing the systems of intelligence, organizations
can squeeze the concept-to-commercialization lifecycle.
Digital Manufacturing in India
36
Q.5 In your view, how successful are Indian manufacturing firms in adopting
Digital Manufacturing viz.-à-viz. companies in the developed and emerging
markets. And what challenges do you see can the Indian manufacturing industry
face while adopting Industry 4.0?
The adoption of Industry 4.0 in India is still in early stages. There are a few companies who have tasted its success. Others
are either taking a wait-and-watch approach or are approaching this concept very cautiously by taking low-risk small-scale
steps. Those who have adopted Industry 4.0 at scale are already moving ahead and have adopted advanced technologies
like AI in their manufacturing operations. These companies have seen significant improvements in efficiencies and are now
on the path towards innovating their business models.
Then why others are not adopting Industry 4.0?
Today, the cost of sensors has come down to less than 1% of what it was 10 years ago. Similarly, the cost of industrial
robots, drones, and three-dimensional printers have also reduced drastically. So, cost is not the factor. Today, India is
emerging as a hub of Industry 4.0 startups. So, it is not the availability of talent or solutions. The cloud world has made
the best use of Industry 4.0 technologies that are available, which signifies the availability of technologies. The following
graphic on a seven-stage process could help us pin down the biggest challenge in adoption of Industry 4.0 in India.
Typically, when an organization considers an Industry 4.0 initiative, the view they take is up to Stage-3 (Seeing – what is
happening). Just the “visibility” into operations does not justify investments and the initiative goes to the backburner or
gets scaled down. Manufacturing organizations, business consultants and technology companies should work together to
envision the future stages of the complete digital feedback loop to drive adoption of Industry 4.0.
Digital
DigitalManufacturing
Manufacturing in India
37
1 2 3 4 5 6 7
Time
Source: Microsoft point of view on IoT
Digital Manufacturing in India
38
Conclusion and
recommendations
07
Digital Manufacturing in India
39
The study provides an insightful reflection of the awareness, readiness and status of implementation of Digital
Manufacturing in India. It is apparent that manufacturing leaders have started exploring the adoption of
Digital Manufacturing in their organizations. Some of them even have a strategy and a budget ready for Digital
Manufacturing initiatives. However, lack of clarity on the economic benefits of the investments required to integrate
hardware, software and technology infrastructure with digital systems and decision intelligence capabilities is acting
as a roadblock for these organizations to move towards the adoption of Digital Manufacturing.
Industry leaders are employing emerging technologies to improve the monitoring of process performance through
measurement and visualization of KPIs, performance tracking, throughput enhancement and quality improvement.
However, there seems to be a wait and watch approach and a majority of leaders are waiting to confirm the success/
failures of the existing PoCs before getting convinced about the adoption of emerging technologies such as AI, 3D
printing, Machine Vision, and Augmented Reality at scale.
We believe that in an evolving world of well-connected consumers, systems and processes with tremendous ease in
accessing information, manufacturing organizations are expected to be proactive, agile, flexible and adaptive. In order
to meet these expectations, companies can leverage Industry 4.0 technologies to enable them to:
• Have real-time, on-demand information and visibility across the production chain
• Apply advanced analytics capabilities to refine process and production techniques
• Facilitate end-to-end integration with suppliers, channels, business partners and customers
• Gain agility in manufacturing processes like implementing new products, cutting down cycle and waiting times,
changeovers, and feedback loops
• Reduce wastages (rejects, reworks, idle time, excess inventories) and be cost efficient
While some organizations have indicated their understanding towards the significance of structured problem-solving
frameworks, Manufacturing Excellence Programs are not placed at a strategic level and have been diluted over the
years into tactical initiatives. There have been issues concerning the scalability, standardization and sustenance
of these programs. But today, cloud-based digital tools provide an opportunity to organizations to not only revive
Operational Excellence initiatives but also to put them back on the strategic agenda of a firm.
It is therefore essential for all the companies, be it small, medium or large, to embark on the journey of implementing
Smart Factory to remain competitive and achieve global success. It is also essential to remain in the race with
competitors and attain a world-class status.
The time to act is now and as a first leg of the journey, it is important for companies to identify and onboard the right
talent and collaborate with the right partners who could provide them with a platform, hardware, sensors, and an
application. The need of the hour is to quickly formulate their Digital Manufacturing strategy that takes cognizance
of specific needs and utilize data as the central asset. While having the right strategy is only a beginning, a clear
roadmap defining the functions and combination of technologies would help companies to move forward.
Losses on the shop floor are enormous and most performance gaps are hidden. In the last few years, the
manufacturing sector has adopted various techniques to identify and reduce these losses. However, now we are
at a point where older methods are not moving the needle significantly and emerging technologies are considered
probable to enable companies to move towards zero losses.
Digital Manufacturing in India
40
Digital
Manufacturing
at EY
08
Digital Manufacturing in India
41
EY India has a holistic point of view on how organizations can transform to Digital Manufacturing and reap handsome
financial benefits from it. As a unique approach, there are some differentiated assets such as, a digital Operational
Excellence platform (EY Catalyst), and our suite of smart apps that digitize several work processes related to
maintenance, energy management, quality, and material flow on the shop floor. All these assets are over and above
the IoT-based solutions EY offers and can provide companies with a complete system that augments their existing
initiatives.
EY Smart Factory
EY’s Smart Factory suite of assets is a four-box approach that relies on the foundation of a world-class manufacturing
excellence system (Box 1). Through a people-centered digital platform (Box 2) and powered by execution applications
(Box 3), EY Smart Factory embeds manufacturing excellence by arming the shop floor with dynamic predictive Data
Analytics, Virtual Reality and Artificial Intelligence to deliver unprecedented performance. Finally, our IoT-based
specific solutions (Box 4) can propel organizations towards a full-fledged digital journey.
Three challenges leaders need to find a solution to: Typical client benefits realised
Manufacturing
Speed and scale of performance uplift: transformation: • US$200m savings
Provide leaders and teams with the Breakthrough • One year payback
US$ 20b
2 methods and resources to achieve speed
and scale of performance improvement
performance Company B
•
•
OEE* up 14pts
6m production
improvement a� nd
program deployment competitive stops eliminated
advantage
Make smarter
Make the people …Make the
20 – 40% decisions and drive 3–5
smarter… equipment smarter
Yield improvement smarter actions Points
improvement in OEE
Smart Maintenance
EY Catalyst digitizes a company’s Operational Excellence initiative and significantly enhances the performance
improvement programs of the companies in supply chain and manufacturing. It allows companies to access an extensive
Intellectual Property (IP) database that contains tens of thousands of supply chain and manufacturing operational
capabilities in multiple languages that has been in use for more than 20 years in major companies across Europe, the US,
Latin America, Asia-Pacific and Australia. This allows companies to tap into a rich repository of leading practices, including
self-assessments, custom-built Operational Excellence journey maps, training tools and analytics capabilities, at any time
to help them plan, manage and monitor their operational improvements. EY Catalyst brings these Operational Excellence
tools directly to the shop floor through mobile apps that empowers companies to put Operational Excellence in the palms
of their employees.
Digital Manufacturing in India
43
Digital Manufacturing
Digital Manufacturing
in India in India
44
EY contacts
Neville M Dumasia
Rohan Sachdev India Leader
Leader Advanced Manufacturing, Mobility
Advisory Services and Infrastructure, Advisory Services
[email protected] [email protected]
Farokh Balsara
Paresh Vaish
Partner & National Director,
Consumer Products & Health Markets Leader
Services Performance Improvement
[email protected] [email protected]
Ashit Saxena
Ashish Nanda
Associate Partner
Partner and Leader Performance Improvement,
Supply Chain Advisory Services Advisory Services
[email protected] [email protected]
Anirban Mukherjee
Associate Partner
Vinayak Vipul
Performance Improvement, Director, Performance Improvement
Advisory Services Advisory Services
[email protected] [email protected]
Digital Manufacturing in India
45
Key contributors
Ashit Saxena
Associate Partner
Performance Improvement,
Advisory Services
[email protected]
Ritesh Kumar
Senior Manager
Performance Improvement
Advisory Services
[email protected]
Tavleen Singh
Senior Consultant
Performance Improvement
Advisory Services
[email protected]
Gaurav Sharma
Assistant Director, EY Knowledge
[email protected]
Shweta Verma
Supervising Associate, EY Knowledge
[email protected]
Sayan Banerjee
Senior Manager
Brand, Marketing & Communications
[email protected]
Digital Manufacturing in India
46
Digital Manufacturing in India
47
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