Innovation: Need of the hour for Indian manufacturing

Sukrit Bharati in Voices, Business, TOI

Why is innovation necessary for manufacturing processes?

Innovation in manufacturing is not just about creating new products or improving product design. It’s about becoming competitive on a global scale and being able to manufacture products for the world. One problem that India faces in this regard is its slow turnaround time. For example, if a customer in the US requests a customized air conditioner with specific changes to the design, colour, capacity, and compressor, an Indian company may not be able to meet these requirements quickly because it relies on sourcing parts from other countries, including China. As a result, it may take several weeks or even months to produce a prototype, while a Chinese company could turn around the request in just a few days and win the order. This gives Chinese companies a competitive advantage because of their innovation-driven manufacturing processes.

To become more competitive, Indian manufacturing companies need to focus on innovation in their processes, including improving turnaround times. This could involve finding ways to make design, material, and moulding modifications in-house or within a short distance, rather than relying on external suppliers. By streamlining these processes, Indian companies can respond to customer requests faster and potentially win more business. Overall, innovation in manufacturing is not just about developing new products, but also about improving the efficiency and speed of the production process to meet the dynamic needs of the customers in today’s global market.

Cost minimisation

When a customer wants to purchase a product from China, the price they are quoted may not be the final cost due to the variety of raw materials and grades available to Chinese manufacturers. They can provide a solution at a suitable price by using materials from sub-grades instead of just using from the higher or a lower grade. This is because Chinese manufacturers have a wide range of materials at their disposal and can tailor their sourcing to meet the specific cost requirements of their customers.

To compete with China, other countries need to have a strong understanding of materials and the ability to customize their use to optimize costs. This requires both economies of scale and a wide variety of raw materials and grades to choose from. By increasing their material sourcing, sorting, and understanding capabilities, manufacturers can improve their competitiveness and better meet the demands of their customers within the stipulated time.

Advancements in tooling 

To become more competitive in manufacturing, it is necessary to innovate in the way we approach tooling and product development. This includes finding ways to make our tools and automation more modular so that we can quickly customize products for different customers. One approach that China has taken is to invest in more modular equipment and machinery, rather than buying large, expensive pieces of equipment that can only produce a limited range of products. While this may result in slightly higher conversion costs, it allows manufacturers to cater to a wider range of customer needs and save on investment costs.

To stay competitive, manufacturers need to consider the benefits of modularity in their tooling and automation processes. By adopting a more flexible approach, we can better meet the diverse requirements of our customers and remain competitive in the global market.

Technology-driven – Data Analysis, Artificial Intelligence and Automation

Incorporating technology, such as artificial intelligence (AI) and machine learning (ML), can be beneficial for manufacturing companies in several ways. It can help reduce errors and improve efficiencies in various processes, including inspections, product identification, and tracking. However, it’s important to keep in mind that technology is not a replacement for a strong manufacturing base. The primary focus should be on being flexible and responsive to customer needs to win and retain business.

Once a company has a solid foundation in manufacturing, AI and ML can be used as a tool to add value and improve operations and processes. But without a strong base, these technologies are not as effective. It is important to prioritize the fundamental strength of a manufacturing company and then consider how technology can be leveraged to enhance operations and better serve customers.

Human Resources

Innovation is also needed in the way we manage and engage our workforce in the manufacturing industry. Companies in India often face challenges related to skilled labour and societal issues, which can hinder their ability to scale and grow. To overcome these challenges, it is necessary to come up with innovative approaches to labour management in India that can help companies navigate these issues.

Additionally, improvements in governance and compliance processes can help streamline the process of setting up and operating a manufacturing facility. The government is already working on initiatives to improve the ease of conducting business and to reduce turnaround times for factory set-up and compliance. By simplifying these processes, we can create a more favourable environment for manufacturing companies to thrive and grow.

India vs the world

India has a strong position in the global manufacturing index, but there are still areas that need improvements, such as technology adoption, productivity, supply chain, and skilled workforce. These areas are often advanced in developed countries, where manufacturing is driven by technological innovation and has a low reliance on human capital. Despite India’s abundance of human resources, it is important to also incorporate technology to be competitive. To attract global investment and become a global manufacturing hub, India must also focus on improving policies, and infrastructure, and upskilling the labour force, in addition to integrating technology and human resources more effectively. India has the potential to be a top source of global innovation, indicating its potential to become a major player in manufacturing.

Future trends

There are several key areas that manufacturers in India need to focus on to become more competitive and stay relevant in the global market:

  • Backward integration: This refers to the process of building a supply chain that includes the production of raw materials and components needed for the final product. By developing a strong backward integration system, manufacturers can reduce their reliance on external suppliers and improve their control over the production process.
  • In-house design and development: Rather than outsourcing research and development (R&D), manufacturers should consider investing in in-house R&D to improve their product design and development capabilities.
  • Investment in core product sectors: The government is already taking steps to invest in core manufacturing technologies, such as semiconductors, to help boost the competitiveness of the industry. Manufacturers should also consider investing in these areas to stay ahead of the curve.
  • Efficiency in product conversion: To remain competitive, manufacturers need to find ways to efficiently produce and assemble products in the most cost-effective manner possible.

While it would be wrong to say India is lacking in its efforts, we need to ramp up the speed at which we adopt new technology. This also includes reducing red-tapism and increasing foresight. Innovation is the need of the hour, and the quicker the Indian manufacturing sector does it, the better it is to ensure that we capitalise on the opportunity that is coming our way.

in