Leading for Growth

How can the Indian manufacturing sector become self-sustainable through innovation and increasing technological capabilities?

Jamshyd Godrej: There are far too many interdependencies to pay heed to before we head toward the concept of self-sustainability. We should first concentrate on the areas we are competitive in and where our value additions can really matter. The way to improve manufacturing is through bringing innovation and increasing our technical capabilities as well as process building of organizations through their people. Incorporating productivity philosophies and good practices like Kaizen and so on to bring in constant, continuous improvement is yet another method. In my view, there are numerous areas to bring in internal improvement of an organization to make it better and more competitive as they make a meaningful difference in manufacturing. The idea of self-sustainability should be seen through this lens.

 

Is Industry 4.0 applicable for the Indian manufacturing sector and what is its usability in today’s manufacturing phase and in future?

Godrej: This is a fair comment that Industry 4.0 is not something that is universally good for everything and everyone. There is going to be a small segment of manufacturing where Industry 4.0 will make a significant difference in the way things are done. But it is not going to affect more than 5 percent of the Indian industry. May be in five years, it could be 10 percent. The concept will slowly evolve in terms of its value and applicability. To deploy Industry 4.0 properly, one must be able to bring in effectiveness in the manufacturing processes in terms of productivity, quality, output etc. Although it is an important aspect for the growth of manufacturing, its applicability is quite limited at the moment.

 

How is e-mobility to affect the machine tool industry?

Godrej: It’s good to have an ambitious plan for electric vehicles due to the various benefits of using them in the city by reducing the tailpipe emissions. However, it’s still an open question whether we really will get great benefits from e-mobility from the economy perspective as coal-based power plants are being used to charge the electric vehicles. Until we have understood the holistic benefits of e-mobility, it is difficult to say how beneficial will it be for the economy. We, today, do not have the capability for the essentials that go in e-vehicles such as electronics, software, and batteries. These are meant to be imported. Hence, we are needed to yet evolve in
that area.

However, the machine tool industry is not likely to be impacted for the next 10 years. But at the same time, it should understand the effect of e-mobility on various parts of the supply chain in the automobile industry. The machine tools that go to make engines, transmissions and other parts of the automobile and e-mobility supply chain will be impacted. The share of internal combustion may come down slightly, but since we have a lot of growth at the same time, the machine tools industry will not see any major impacts for the next decade. But we should study the effects after that term on the machine tool sector.

 

How are emerging sectors such as Defence, Space, Aerospace, Railways, Medical equipment adding value to Indian manufacturing and can these emerging sectors change the overall outlook of the Indian machine tool industry?

Godrej: Sectors such as Defence, Space, Aerospace and Medical are much more specialized and hence, they increase the capability needs of machine tools.  With the rise of these hi-tech areas, the capability of the type of machines needed for them will also change a lot. Undoubtedly, there will have to be a better policy to meet these segments. There are two parts to railways: the traditional and the high-speed railways. There is a big shift in the technology needed for meeting the machining requirements for high-speed trains. Hence, the demand from machine tools industry for that will be quite significantly different from what it is today.  

These emerging sectors are to become increasingly important in the economy. Clearly, the capability requirement of the machine tool industry will have to be in line with the needs of these emerging sectors. If we are meeting the needs of different sectors which may be more relevant from a global perspective, then clearly our position and outlook from a global point of view should be much better.

 

Largely, the Indian machine tools sector is dominated by small and medium enterprises (SMEs). What should be done to empower them so they can contribute majorly to the Indian economy?

Godrej: There are two parts of the SME sector. One is part of the supply chain and other is involved in making complete solutions for the SME sector in manufacturing. Where they are involved as a part in the supply chain, the demands on them are going to change very quickly because, in my opinion, the supply chain will demand a lot of changes to meet the emerging markets we just spoke about. The part of the SME which takes care of the SME manufacturing sector will also change rapidly but it will have to concentrate more on the solution aspect as opposed to the supply chain.

There are not enough suppliers of equipment in the SME sector who really look at the full solution for the SME manufacturers. They are suppliers of different things but not integrated solutions. The manufacturers who cater to the SME sector, the discreet manufacturers, need to change their outlook in order to
provide solutions.

 

Which means that there should be more technology upgradation and, presently, technology acquisition is the biggest challenge in the Indian manufacturing sector.

Godrej: Oh yes! New technology acquisition comes through a variety of ways. One can either buy, or be part of the consortium, or can develop their own, or can work in conjunction with universities and other R&D institutes. There are many ways for that to happen. It is not possible for any industry including the machine tool industry to not keep on improving technology.

 

IMTMA has been in the forefront of connecting the industry with academia. Many R&D projects are being undertaken with the support of IIT Madras.  Should Government create similar opportunities for many other sectors within manufacturing so that Indian manufacturing industry moves towards excellence?

Godrej: One of the major thrusts of the academia like IITs should be to work jointly with the industry. IIT Madras has created an incubation center and is working closely with the industry. This kind of activity is required to be replicated by all engineering institutes that deal with manufacturing. The Government’s role should be to encourage the academia to be more industry-oriented and create incubation centers for R&D that the industry can use.

 

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