Big data, social media, and the cloud essential to the success of Made In India
The global manufacturing industry is in a state of major change and consumers are at the centre of this transformation. Purchasing patterns have been redefined due to the ubiquity of information being consumed via mobile devices and on social networks. A highly informed brand agnostic consumer wants a wide variety of customized products and doesn’t want to wait. This evolution in consumer behaviour is shaking up the entire supply chain; manufacturers, distributors and retailers.
In the midst of these developments, and due to significant political and economic developments, Indian manufacturing suddenly finds itself under the spotlight. Global enterprises are making a play in the sector, and foreign investments are pouring in.
The launch of the ‘Make in India’ program has injected some much needed impetus into the sector. The campaign has made proposals that will help the sector reduce costs and gain access to a skilled workforce, as well as credit at lower interest rates. Specific pro-manufacturing measures like the reduction of customs duty on raw materials and machine parts, along with an overarching impetus to improve infrastructure are being considered as steps in the right direction. There also appears to be a dedicated effort towards reducing bureaucratic hurdles which will further enhance the conduciveness for investors to invest in the sector.
The vision of the ‘Make in India’ project is to revitalize the Indian manufacturing industry especially for small and medium enterprises and make it an attractive investment destination. But to really bring this vision to fruition, the sector needs to invest in technology solutions like iBPMS that amalgamate their traditional strengths but also help leverage Social, Big Data and the Cloud. This will drive the sector’s ability to adopt new business models and respond to changes in consumer demand both in India and globally.
Driven by technology, the following trends will influence the industry in 2015:
1. The rise of SMAC and Big Data: Social, mobile, analytics and cloud or commonly referred to as SMAC will drive the resurgence of the manufacturing sector. According to a recent report, Underpinning the future of manufacturing is the extraordinary advancement in IT to support and speed up processes throughout the manufacturing enterprise, from R&D to manufacturing operations, from supply chain to business intelligence. The transition from the 2nd IT Platform (client/server applications) to the 3rd IT Platform (based on cloud, mobility, social business, and Big Data analytics technologies) promises to create a real-time, collaborative, decision-making environment that will be pivotal to supporting manufacturers as they make the shift from a transactional to a real-time business.
2. Global or Next shore Manufacturing: With rising logistics cost and wages in developing markets, and the incessant pressure to accelerate time to market due to the retailer and consumer demands, more companies will find themselves shifting their manufacturing strategies from outsourcing overseas to developing products closer to where they will be sold. Globally local manufacturing or ‘Next-shoring’ will give manufacturers much needed agility in replenishing stock inventory which means the consumer gets his product quicker and warehousing, shipping costs are reduced.
3. End-to-End supply chain transparency: End-to-end supply chain transparency will be a crucial marketing strategy for the future. Manufacturers that maintain a clear line of sight with regards to supply, demand, and capacity across their supply chain will foster collaboration among trading partners and ensure more effectiveness, responsiveness, and robust overall performance.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.