India's Manufacturing Sector Needs A Roll-Up-Your-Sleeves Attitude, But This Time With Technology
Speaking at the Manufacturing panel of the The Next Wave of Cloud Innovation series of industry-focused roundtable discussions organized by Forbes India, in association with Google Cloud, panelists agreed that the sector needs to strike the right balance where technology not only saves costs but also adds value.
The answer perhaps lies in Business 101, opined Google Cloud’s Vivek Subramaniam. “The need of the hour is having a deep understanding of what the customer needs and what the customer wants,” said the Principal Architect for Manufacturing at the Alphabet Inc., unit.
“What we are doing with other enterprises is we already have tool sets around e-commerce or the Google Marketing Cloud platform that we have and use our prowess in data analytics, data sciences to process these large sets of information and provide very specific customer insights on the behavior, needs and the interventions organizations take,” Vivek said. “That ensures that the customers get the right product or the right service at the desired time they want.”
On the supply side technology can solve multiple issues like those that crept up during the COVID-19 pandemic, Vivek said. For example, Google Cloud’s supply chain solution called “Supply Chain Twin” provides a real-time visibility of the entire supply chain system, helping identify bottlenecks and issues early on, Vivek added. “So you can minimize any disruption that may happen.”
No one knows the need for such a solution better than Hindustan Petroleum Corporation Ltd. Chief General Manager for Information Systems Jayant Gupta and Sanjay Kumar Suri, General Manager - IS Technology, Bharat Petroleum Corporation Ltd. The sheer size of their supply chains could be considered overwhelming as they span sales, sourcing, refining, distribution storage and sales.
With more than 80 terminals and depots and almost 90,000 retail outlets and 6000 plus distributors, HPCL needs to make the entire supply chain work seamlessly when a customer walks in, Jayant explained. The COVID-19 pandemic accelerated the adoption of world-class technology at the nearly 50-year old state-run refiner.
“You basically have an app where you fill up the money or have an Radio Frequency Identification (RFID) tag already fitted in the car,” Jayant said. “You simply need to drive into an outlet and the petrol attendant understands the kind of fuel that needs to be filled in and you're ready to go,” he added. “Those options are built into the system for you to ensure that you don't have to step out of the way.”
Not to be left behind, BPCL, the government-owned oil and gas corporation founded in 1952, has been using Internet-of-Things (IoT) powered devices to monitor its entire supply chain, Sanjay said. No mean feat when you have to integrate four refineries, 79 retail depots, 54 LPG bottling plants and more than 17,000 retail outlets.
Instead of a pull process, BPCL instituted a mechanism where a customer can choose not to have their liquefied petroleum gas (LPG) cylinder refilled by way of an SMS-based interaction, Sanjay explained. “This is what we have done on the supply chain and the platform has recently gone online,” he added. “This is all about adding value to business to a very large extent.”
Adding value can be done in many ways.
“I will say the pandemic that happened was a victory for us,” said V Venkatachalam, CEO, Raychem RPG. “In many ways before the pandemic we were a laggard as far as digital evolution is concerned,” he added. The firm catering to the energy and utility sectors in India and abroad was largely relying on achieving optimisation through labor arbitrage, Venkatachalam explained.
The pandemic transformed a very fundamental bottleneck in manufacturing, Venkatachalam pointed out.
“Our industry demands that the customer has to inspect the product before it is done,” he explained. “And that's kind of a grandfather clause that exists in English,” Venkatachalam added. “And imagine a pandemic kind of situation where we couldn't move people, people couldn’t come to us,” he said. “We had a massive buildup on finished goods inventory.”
Raychem RPG solved that problem statement by installing cameras and allowing for real-time inspection of inventory, delighting customers and clearing up the bottleneck, Venkatachalam said.
Those challenges are amplified when you are running a global supply chain. And one such Indian manufacturing giant is Vedanta Resources Ltd. Along with various measures to speed up the supply chain and use real-time monitoring, India’s largest mining and non-ferrous metals company relied on predictive maintenance to reduce downtime, said Vineet Jaiswal, Deputy CEO, Center of Excellence (Asset Optimization, Digital, Innovation, IT, R&D, Quality). “We want to know if an asset is going to get down and bring the stock to production.”
And sometimes the solutions can be as simple as someone asking why a particular process was done in an inefficient manner all these years.
Sourajit Ghosh, General Manager for Information Technology at NTPC said it would take six months for approvals to come through owing to different executives having to sign off on files at the state-run electricity producer. Now it takes 60 minutes, thanks to digital approvals. “This is the kind of transformation that has taken place and another great advantage is the total digitisation of our major processes.”
This transformation is easier said than done.
“Digital has to be made a way of working and our leadership needs to have the patience and focus towards ownership both at the line level and the top management,” said Pratik Goyal, an associate partner for McKinsey & Co. in India. “For every penny that we deliver in terms of monetary value, we need to invest a penny in terms of investment,” he added.
“And enablers are in terms of technology, in terms of people that are at this moment in India and the skill shortages in terms of data scientists and data engineers,” said Pratik. “So how do we bridge that gap?”
Nearly 70% of companies undertaking digital transformation are stuck in pilots, said Pratik quoting a McKinsey study.
A large part of the problem is people and driving change management, especially in the old-world manufacturing sector, the panelists opined.
“Change management is often not the easiest thing,” said Venkatachalam. “So something that we developed as a template based on our experience was a simple philosophy around talk and walk,” he added.
“And so when I say it's about articulating the why, what the problem statement is, and if indeed digital is the actual solution,” said Venkatachalam. “It's more about building ownership and evangelizing and creating awareness about digital,” he added. “Sometimes we have to let go of the past and just embrace the solution and make it last.”
The million dollar question so to speak is whether the Cloud or any other solution will keep India’s manufacturing sector on its transformational journey forced upon it by the COVID-19 pandemic. And the answer lies in its people, the same people who on a factory floor would roll up their sleeves to try and figure out what is holding up a production line.
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