The term Industry 4.0 was first introduced at the Hannover Fair in the year 2011. The aim was to use the high innovation capability of Germany to make the industry more competitive. This shall reduce the outflow of manufacturing to Asia, especially to China which had become the manufacturing hub in Asia. Industry 4.0 improves manufacturing efficiency and increases flexibility by introduction of cyber-physical systems in manufacturing. It is highly capital intensive and fits perfectly to the needs of manufacturing in high-cost countries. But there are also lots of opportunities in India.
Today, although China is still the manufacturing leader in Asia as well as the world, I feel that India is in a unique position. The software services sector is the key knowledge component in India, and since Industry 4.0 combines traditional manufacturing with IT and the Internet of Things (IoT), India can become the major industrial hub in Asia if it plays its cards right. Global companies are introducing pilot projects in India on Industry 4.0. Initial results show up to 30% productivity increase, significant cost reduction and reduction of stock. Shortcomings are in predictive maintenance, quality improvement, energy management, and there is a great reduction in calibration effort.
“The solutions developed in Germany are optimised for the needs of a highly automated manufacturing setup and is very capital intensive. A direct transfer of these solutions to India does not make sense.”
The solutions developed in Germany are optimised for the needs of a highly automated manufacturing setup and is very capital intensive. A direct transfer of these solutions to India does not make sense. The different needs of a low-cost country require a tailoring of these solutions. Indian factories have begun their digital transformation and are rapidly scaling up their units.
The IT sector being the major contributor to India’s GDP, it is already mature to build and maintain complex solutions for the smart factory and optimise them for the needs of India. Therefore, the entire connected industry solution package can be built within the country in the near future. Apart from being a low-cost country, India also has a great potential of highly skilled individuals as a majority of the population are youngsters age 28 or under, who are largely capable of addressing an array of IoT related solutions. However this will not reduce the existing total labour involved in manufacturing but boost the industry because of increasing competitiveness of the economy. Industry 4.0 will change the qualification of the people needed. There will be less blue collared employees as their skill sets will be upgraded and more IT and data specialists in the coming days. This will also bring a new era of growth and wealth for the masses of the country.
The pressing question now is where do you begin the implementation? Does one take the green field (new plant) approach or the brown field (upgrade of existing plant) one? I personally believe that the easiest part is always to introduce the new solutions while building a new plant. But upgrading existing plants and their machines to provide information in the required methods is a faster way to introduce Industry 4.0 and also this allows a much quicker ROI. The onus, however, remains on organisation leaders and how the company is placed in the industry.
Most companies start with their implementation of Industry 4.0 methods in existing plants, but they need to overcome severe challenges. Industry 4.0 is all about data. The access to this data needs to established, which surely is a challenge in case of existing machines. In addition, while connecting the machines to the internet data security has to be assured by appropriate measures. The traditional approach –that the fence around the premises guarantees security — is no longer sufficient. Missing standards in Industry 4.0 complicates the situation even more. With the introduction of Industry 4.0 new business models also evolve. Nonetheless, I don’t think these obstacles will be able to slow down the success of industry 4.0 in India and other low cost countries.
At Bosch India, we are implementing industry 4.0 projects in all plants. Adaptation to latest IoT technology and upgrading our existing machinery is a continuous process for us striving to achieve the best results in the world. We want to set an example of the best IoT infrastructure in the country and continue to churn out leading quality products.
Published in HuffPost (October, 2015)