Indian manufacturing industry amid rising global VUCA

“India is projected to dominate the growth in the working-age population in Asia Pacific by 2050, becoming home to over a billion people eligible to enter the job market”,a UN report has said.

India is already slated to become the next manufacturing hub by 2020. However, technology upgradation and various other aspects need looking into if the country has to make a further impact on the global front.This necessitates creation of highest number of jobs in the world by a country. Now, the task is set out to become a multi-trillion economy and grow across all the sectors multifolds. Manufacturing has to lead with product design led growth for a sizable global market. Stage is being set with the expected Foreign Direct Investment (FDI) inflows of $60 billion in the financial year 2016.

India’s manufacturing sector need to reach at least 25% of country’s GDP from 16% at present which means about doubling manufacturing in coming five years.

The recent announcement by government on allowing 100% FDI in defense for modern technology, civil aviation, pharma and others will spurt further interest in latest technologies.  Global OEMs (Original Equipment Manufacturer) are expected to establish substantial local manufacturing in India with high level of technology transfer and capabilities.

According to the Global Innovation Index (WIPO, 2014), India ranks 76th among the 143 countries. This necessitates nation-wide policy decisions and efforts to establish structures, knowledge, skill sets and processes to leapfrog India to the top 5 innovative countries in the world.

Many Indian companies are hustling to  pursue research and development and adapting technologies which can fast churn out products from concept to final product through rapid product prototyping. There is a deep interest now on 3D Printing. Extensive usage of Engineering software directly connected to machines  with Flexible manufacturing is gaining momentum.

Upcoming technological trends in manufacturing across the globe
Developed economies have population which is not growing and aging whereas developing economies like India is seeing explosion of working age population hence both differ in the need and motive for technology evolution.

Industry 4.0 heralds the convergence of cloud computing, 3D Printing, Augmented Reality, Big Data Analytics, Robotics, simulation, horizontal and vertical integration, IOT and cyber security.

All developed economies are aggressively pursuing Machine Learning and Cognitive Automation as well. India stand comparing to its global counterparts adopting latest technologies. We need to envision global aspirations; identify products and services where we need to lead; carry out research and development and identify capabilities and capacities required. This process will help us in articulating future technologies required and identify best ways to go about it.

We have pockets of technology adoption and now need compelling reasoning; resources and scale for country wide momentum.

Indian manufacturing and supply chain had been mired with various bottlenecks and perennial issues of controls and restrictions. However, as present government is aggressively working towards facilitating business, Indian businesses need to switch gears and start working on excellence in the entirety of manufacturing from Concept to Consumer. India’s journey from pockets of technology adoption to every sector of economy will be unprecedented as the present way of manufacturing in the world is not sustainable at global scale.

The dominating paradigms in terms of adopting advanced technological trends into manufacturing
All economies are becoming service oriented where manufacturing has to support a predictive supply chain in the VUCA (Volatile, Uncertain, Complex and Ambiguous) world to provide a higher value to a specific customer. Now each economic expansion and movement need to address complex political, global and local factors and answer a lot “New why’s”.

Incremental approach has to give way to Innovative mindset for multi-times growth trajectory.
At a very low level of manufacturing set ups with limited capacities, Return on investment on new technologies, new product development and experimentation with Innovation are difficult to justify unless a company thinks to a larger ecosystem for business scale up and develops newer capabilities as being essentials for business growth.

Sustainable business in high technology industries like defence and aerospace requires multi-agency commitment including governments through policy interventions and financial incentives and investments.

Climate change challenges are also driving newer industries to adopt advance technologies for the next billion customers.

Safety and securityhave higher visibilities and implications for industries in the digital world. Inculcating a culture of innovation and encouraging new ideas, collaborative mind set are essential to step change for massive growth in manufacturing sector.

Rapid cycle of unlearning and learning also necessitates flexibility across organization and collaboration with business partners, facilitation by government agencies and long-term policy support.

The dominant changes that should be made immediately in the Indian manufacturing scenario to make it globally acceptable and competitive

Here are a few things that could be done to make dominant changes in the direction-

# Mass movement for creation through manufacturing – we have seen success in White revolution of a global scale in India and now it’s time to move with manufacturing.A culture of performance and not entitlement and privileges will go a long way to divert attention from shoddy managing to channelizing capabilities for excellence – we have in plenty!

# Attract massive investments in all spheres of manufacturing.

# Nation-wide data collection and analytics for skill development and other nationwide policy decisions.

# Facilitate and incentivise all economic activities under organised sectors and discourage unorganised sectors.

# Government’s role as facilitator rather than controller and regulator.

# Help create various platforms and structure for a global scale. Creation of think tanks with policy makers who are responsible to prepare actionable plans for medium and long terms.

# Live Start up and SME echo system where there is a play of competition and way to transition to global competitive level.

# Structured planning for FDI’s, foreign players and local players and how this mix will pane out in future.

Harish Pant,

Managing Director,

Hampson Industries Private Limited.

[Profile]

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