Smart way forward for Indian engineering industry

India is on the threshold of major reforms and is poised to become the third-largest economy of the world by 2030. The country’s manufacturing sector has evolved through several phases - from the initial industrialisation and the license era to liberalisation and the current phase of global competitiveness. Today, Indian manufacturing companies in several sectors are targeting global markets and are becoming daunting global competitors. Many are already among the most competitive ones in their sectors. 

The engineering sector in India attracts immense interest from foreign players as it has a favorable environment and has an advantage in terms of manufacturing costs, technology and innovation. The above, combined with favorable regulatory policies and growth in the manufacturing sector has enabled several foreign players to invest in India. “Thanks to improved monetary and fiscal policies, as well as lower oil prices, the Indian economy has stabilised and now boasts the highest growth among G20 economies," according to the GCI report.

Overall these years the Indian engineering sector has witnessed a remarkable growth over the last few years and has emerged to be a strong player driven by increased investments in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors of the economy, is of strategic importance to India’s economy. Growth in the sector is driven by various sub-sectors such as infrastructure, power, steel, automotive, oil & gas, consumer durables etc. 

In today’s highly competitive and dynamic environment, market competition forces organisations to improve productivity and enhance their competiveness. Consequently, the matter of assessing and improving competitiveness in different industry of several countries has received increased attention in recent times.

In addition, it has been observed that engineering industries need to focus and invest more on operational improvement and optimisation. Value adders/operators play a key role in operations in spite of the application of machinery and equipment. As per challenges raised by the industry, few listed are low productivity, over staffing, poor labour relations, inefficient handling of operator challenges, high wages and lack of trained or skilled workforce. It can be inferred that all these issues are fallouts of lower manpower productivities and, hence, scientific approach towards efficiency improvement is the need of the hour.

India has come a long way and traversed the concepts of quality management systems (ISO) then Total Quality Management (TQM) and now it aims to go beyond these frameworks. The situation demands for building competitiveness across sectors and specifically in the engineering sector which is pivotal growth driver for the country. 

Increasingly organisations from all sectors and all sizes are looking at holistic world class manufacturing (WCM) practices or transformational practices to eliminate inefficiencies across their value chain which ultimately helps them in building competitive setups. 

Further, few of the challenges faced by engineering sector are on time deliveries to customers, flow organisation from raw material receipt to finish goods dispatch, absence of overall equipment effectiveness, issues in labour productivity, customer complaints & rework, absence of inventory management, higher automation cost and absence of improvement oriented culture.

Going forward, integrating world class manufacturing and smart manufacturing practices is an effective answer to these existing problems of the engineering domain, which is coming up steadily these days. It’s renovating the entire idea of manufacturing. Smart manufacturing concept has been present since the early days, yet has merely been an ‘in concept’. However, considering the challenging scenarios now and proven results of the said combination, it is the only effective solution the engineering industry can resort to.

The smart manufacturing excellence practices can be achieved by developing a culture based on factors such as continuous improvement, problem prevention, zero defect tolerance and customer driven just in time production.

Following actions points can streamline the path of smart manufacturing along with world class practices and deal with the challenges in engineering sector:

The said few practices ensure the basic stability of the working environment where the health of machines, continuous flow of material, short throughput time and excellent quality ratio are the parameters that determine the competitiveness of the organisation as well as decide customer satisfaction. Needless to say, customer is king and it is essential to heighten his/her satisfaction levels to delight stage to survive in the market.

Benefits of implementing the tools to face these challenges are improvement in ‘On-Time In Full’ supplies, increase in the yield & throughput, reduction in throughput time, reduction in rejection, increase in labour productivity, inventory reduction by releasing lots of hidden space, and reduction in breakdown time.

These concept outcomes directly add to the bottom-line while simultaneously customers receive on time delivery and high quality products.

Apparently, the organisations are witnessing convergence of technologies and process improvement initiatives with the potential to radically improve the way manufacturers thread processes and systems in the entire product value chain in order to deliver more options and new service models to customers. By each passing day the world of manufacturing is getting smarter and raising the bar, on the road to manufacturing.
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Aakash Borse is one of the founding members and director of Faber Infinite Consulting