Amidst all the sectors, barring probably the construction industry which is still nascent in IT adoption, manufacturing is probably in the evolving side of the curve, feels Uma Balakrishnan, CEO, Axcend Automation & Software Solutions Pvt Ltd, Bangalore (http://bit.ly/F4TAxcend). While retail and BFSI adopted early on, mainly because of size/scale of operations, diverse geographies, and direct consumer interface with the using population, manufacturing has shown a mixed trend, she observes, during the course of a recent email interaction with Business Line. Indian manufacturing enterprises that acquired global companies and turned multinational have been early in the increased scale of adoption cycle, while smaller entrepreneurial operations are still very nascent in IT adoption, explains Uma.
Three primary factors drive IT adoption, she elaborates: (a) Sheer size and scale that necessitate moving into IT automated systems, as manually it becomes challenging to run business; (b) external world in the form of clients or statutory regulatory bodies that make the manufacturers align to some best business practices using IT systems; and (c) internal management maturity to leverage IT and gain competitive advantage in business through quality, cost, operational excellence, or shortened time to market with product.
Excerpts from the interview.
What are the prevalent technologies in manufacturing – especially in discrete industries – considering that India is fast becoming a global manufacturing hub in some sectors?
Manufacturing organisations have multiple functional needs and technologies can be broadly mapped under horizontal and vertical dimensions. Business IT enablers such as ERP (enterprise resource planning) systems have reached a higher level of adoption as general business IT tools of the manufacturing.
The prevalent technologies vary across functions in the organisations. At the shop floor level, CNC (computer numerically controlled), PLC (programmable logic controls), and HMI (human machine interface) provide the industrial automation technologies that serve in the automated control of the physical manufacturing.
More advanced users have matured into centralised plant operations control with SCADA technologies. In terms of product design and manufacturing process design, 3D design, PLM (product lifecycle management), and digital manufacturing are evolving in adoption cycle from the nascent stage of 2D design platform.
Very advanced users, though a few, have evolved to use complete plant modelling and simulation, with virtual commissioning and advanced tools such as process simulate, factory flow, factory CAD and so on. Here, practically before a single rupee is invested in physical plant infrastructure, the entire model and operations can be visualised on different what-if business scenarios.
In the horizontal functions, ERP (enterprise resource planning) has a mature adoption curve, while SCM (supply chain management) systems are in mid stage of maturity in adoption. Very progressive companies have looked at vertical application integrations, between the shop floor and business systems, to provide competitive advantage and have adopted manufacturing execution systems (MES) and manufacturing intelligence solutions.
Are there any differences in these technology adoptions between global users and Indian manufacturing users?
Fundamentally, we can look at the users from two perspectives.
First, the manufacturers who are part of the Indian manufacturing sourcing hub which serves the global OEMs. They are more aligned to technologies prevalent in sourcing geography and are early adopters of the same, especially in the area of product design and quality management which has direct impact on the end product being shipped by the global client. So, 3D product design, PLM, online inspection and quality management system adoptions are quite concurrent with the western users.
However, technologies and solutions for operations management have mixed adoptions. Technologies for physical manufacturing – such as industrial automation systems with PLC, HMI, and SCADA which have a direct impact on the quality of physical goods manufactured – have a higher alignment to global usage patterns, but those involving operational management – such as manufacturing process tracking – higher level of automation technologies like robotics, wireless, mobile applications, and remote Internet-based plant management are lagging.
The primary lag is due the fact that the cost of labour is substantially different between the western world and India, and those functions which can still be efficiently managed through people at an optimum cost inhibit a compelling cost saving perception in technology adoption.
Second, the manufacturers who are India-based business entities delivering end products for consumers directly or indirectly. They are constantly trying to gain competitive advantage through innovative new product releases and higher level of manufacturing excellence.
So, the technology adoptions are primarily defined by the management outlook and the drive to use IT as a strong business enabler to drive the business strategy and be a competitive high growth and profitable firm.
The most advanced manufacturing user community which strives to achieve the highest level of operational efficiencies and manufacturing excellence has globally adopted unique technologies in the convergence space of industrial automation and transactional business management IT. This evolving technology and the solutions base thereon are called by different nomenclatures by suppliers: Manufacturing execution system (MES), real time manufacturing operations management (MOM), and manufacturing intelligence (MI).
There is a momentum on this technology adoption globally – especially in the light of the downturn in the economy – as it gives a better real time lever for management to take informed business decisions.
How do the adopted technologies in factory and shop floor help businesses? Are there measurable business returns on these technology capital investments?
Technologies when understood in the business enabling context have always benefited the customers. Where the physical manufacturing process necessitates the purchase of an equipment, the return on investment is fairly well realised over the years and perceived as technology necessity rather than a discretionary spend. So technologies such as industrial automation basic systems have got well adopted with defined ROI.
However, on the subject of product design, advanced manufacturing operations management, manufacturing excellence – with tools such as PLM, MES, and manufacturing intelligence – business enablement and understanding of the competitive advantage creation are still nascent and hence a hazy realisation of ROI. Also consider the fact that this involves a CXO level understanding of the business benefit – a hybrid factor of CFO, CIO and CEO mindshare involving manufacturing operational perspective and IT perspective – so ROI needs to be sensitised at the 30,000 feet level within the corporate.
To a CIO of manufacturing firm, how different are the challenges faced vis-à-vis a service industry CIO?
One of the fundamental differences is that the physical manufacturing operations have a huge role in the business, and therefore the CIO has to deal with user needs of diverse but specialised nature – in design, planning, shop floor management, quality – and align all their business needs with the corporate goals.
It means dealing with blue collar and white collar; sometimes conflicting needs based on individual departments have to be mitigated. More importantly, the technology used being very diverse – from proprietary machine based controls systems, plant networking which has its own standards, business networks of Ethernet, diverse databases of plant level information and business information.
So the CIO has to have a clear understanding of the relevance of each technology for business and drive the CEO strategy effectively through an integrated IT system.
It is a matter of time before plant automation and IT become a corporate matter and get driven through an organisation-wide strategy.
How do you demystify technology, to ensure user adoption within the factory?
As long as we are able to bring in learning into the manufacturing users – a base which comprises all levels of users such as the operators who might be ITI, school-level educated, the supervisors who might be diploma-level educated users, the middle level management made up of graduates and thereon, up to the senior level CXO executives – in the language and context of their role, we would be able to make IT simple to adopt.
After all, technology exists because it serves a business need, not the other way that the technology exists and the business has to find a need to use it. We recommend, therefore, those technologies which are reliable for an industrial environment, and have a proven usage experience life in field, and not necessarily cutting edge always.
At the end of it a software bug cannot stall a production line – goods have to be produced at all times with no stoppage in the shop floor – with whatever technology you use. The ability is in using the right tools and relevant solutions, based on each customer maturity level of the organisation and making IT an enabler in it.
It calls for making your hands black with oil at shop floor and still doing the software to make the plant chug along.