Manufacturing sector sees cultural barrier in digital shift: L&T Tech CEO

The $500-mn worth company developed a digital technology platform UBIQWeise to offer smart factory services to businesses

L&T Technology Services said manufacturing companies across different nations would need a major "cultural shift" before they adopt to new technologies such as internet of things (IoT).

Chief executive officer of the engineering services arm of L&T, Keshab Panda, said he has seen major cultural barrier amongst customers across different global markets towards digital transformation, even as the manufacturing sector is readying for Industry 4.0, the age of smart factories.

Panda, who is an aerospace engineer and worked on India's light combat aircraft Tejas and on the country's satellite programme, said the shift towards technology-enabled manufacturing practices, where data from machines will automate operations, amongst customers across the globe "have just started" and majority of them are worried about the transformation and customer experience.

"The engineering transformation, I believe, has started (and) 75 per cent of our customers are still thinking about how to go about it. There is a big cultural shift. If you go to a manufacturing house they are working on some design for 30 years, you tell them to do differently, world over there is a big cultural stop there," said Panda recently sharing his experience after speaking to some clients in the US.

Both Indian IT services players and engineering solutions provider see this industrial transformation as a bigger opportunity going forward. Companies across different markets such as Japan, Germany, US are gradually moving towards an era where information technology and machine data will determine efficiency in a factory or a manufacturing unit with the introduction of Industry 4.0.

The $500 million Indian engineering services company developed a digital technology platform in the past years called UBIQWeise to offer data-based (IoT) smart factory services to businesses. L&T Technology has similar platforms for industries such as transportation, healthcare, telecom, and utilities.

The company earns nearly 14 per cent of revenue from the digital technology-based services and counting heavily on these platforms to bring faster growth.

While Panda said the digital transformation in manufacturing and allied sector would take some more time; he pointed out that with the availability of more machine data companies such as L&T Technology Services should ensure data security.

"Clients are asking how do we improve the customer experience...We have 257 patents filed in areas like IoT, smart building platform etc. The question is: what problem are we going to solve, what value we are creating. We will work more on more on that area," added Panda.

The company's other platforms for the engineering services sector include i-BEMS, Smart Mesh Network (i.e. for better use of energy) and others.

Panda believes given the increased push for digitalisation of factories "data security" would be a major priority for businesses and the services providers including L&T Technology Services need to "do more" on that front.

K S Viswanathan, Vice President, (Industry Initiatives), Nasscom, however, said manufacturing companies across geographies are making their blueprint ready for the shift, if not transitioning "leaps and bounds".

"It is partially true. Many companies are getting their blueprint for shift from analogue to digital. Big companies globally such as GE, Daimler, Mitsubishi and others have drawn out plans and working on it. But Indian service providers do not have large format domain knowledge ready yet and on many occasions they are co-creating," said Viswanathan.