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Opinion: Why India's manufacturing cos lag behind global peers

India continues to lag in making investments in R&D and innovation. The speed at which readiness for Industry 4.0 needs to happen, and is happening globally, is very slow-paced in India

November 17, 2017 / 04:56 PM IST
Coal power plant (Representative Image: Getty)

Coal power plant (Representative Image: Getty)

By Rahul Garg, CEO of Moglix 

Smart Manufacturing, or Industry 4.0, is the buzz of the town in industry these days. The new realm of global competitiveness is automation and data exchange in manufacturing technologies.

Leading manufacturing hubs globally are keen to adopt new technologies of cyber physical systems, Internet of things, and cloud computing, to generate knowledge and make manufacturing intelligent and cost-effective.

But India’s manufacturing, is still bound by conforming ways of doing business. It is far from being ‘Smart’.

Where is Indian industry lacking?


As per the 'Make In India' mandate, the Government of India has an ambitious plan to step up the pace of manufacturing and expand it to 25 percent of the GDP from the current 16 percent.

Though the government is making efforts with reforms such as Make In India, Digital India and One Country, One Tax, what still prevails in our USD 300 billion manufacturing industry is the inflexibility, and in most cases, denial at the grass root level to 'change'.

According to a report by PwC, a massive potential of our manufacturing hub remains untapped as almost 80% of supply chain of manufacturing companies is still running offline.

These manufacturing units are slow to understand and adapt to automation and digital technologies that can boost their businesses multi fold.

While manufacturing generates more data than any other sector of the economy, there are hardly any companies in India that are harnessing this data for decision-making.

Global companies are preparing for manufacturing’s future by investing in R&D, infrastructure upgradation and technology innovation. These  companies are resolving to tools such as SCOR [Supply-Chain Operations Reference], machine learning, robotics and IoT, in order to become more efficient and agile.

Rahul Garg, Founder & CEO, Moglix.jpg (1)

(In pic: Rahul Garg, CEO - Moglix)

But in India we are still struggling to develop Smart Cities and build integrated warehouses.

India continues to lag in making investments in R&D and innovation.

The speed at which readiness for Industry 4.0 needs to happen, and is happening globally, is very slow-paced in India.

 When will India be ready for Industry 4.0?

Not until we take actions to become ready!

Smart manufacturing is a direction where global manufacturing sector is moving, and India had better move quickly or lose on the best of it.

There are primarily three focus areas where the top management, and large organisations,  particularly EOUs (Export Oriented Units) are required to take action, these are:

(i) Bringing awareness and changing of mindset - Where Industry 4.0 is the most buzzing word, it is also the least understood.

Most SMEs lack the awareness of IoT or robotics.

Awareness should be created to bring to notice pros and cons of not keeping up with the latest technology.

(ii) Automation - Digitisation of supply chain plays a crucial role is increasing the production and profit for any company.

What is required is to encourage a culture where Indian manufacturing units thrive to become early adopters of every global technology.

(iii) Invest in R&D & Innovation – To keep up with the global standards of manufacturing, it is absolutely essential to invest in R&D and technology innovations.

Only this change can lead every Indian manufacturing unit, be it small, medium or large, to upgrade and innovate.

The need of the hour is to move fast and move now!

(The author is founder and CEO of Moglix. Views are personal.)

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first published: Nov 17, 2017 04:33 pm
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