Automation Market to Reach $2000 Million by 2016 - Frost & Sullivan

As the world economy evolves into a global marketplace, competition presents itself in the form of domestic and international players. The recent downturn in the global economy has heightened the need to gain a competitive edge in the discrete and process manufacturing industries. Firms are continuously striving to increase their productivity, profitability, safety and sustainability. As competition increases, companies willing to invest in various automation solutions will more likely be successful in the long-term .

With India emerging as a ¬Global Manufacturing and Supply Hub  in several areas, innovation and efficient manufacturing have become part of the new ¬Indian Mindset.  The current economic landscape makes this an ideal time to launch an Automation Technology Fair in India. The first automation show, showcasing global competency, the India Automation Technology Fair, IATF 2013, organised by Automation Industry Association (AIA) and Messe MŁnchen International India (MMI India), recently.

Present at the Inauguration Panelon ¬Innovation Exchange-A Spring Board for New Solutions  were Armin Wittmann; Exhibition Group Director, Automatica; K Nandakumar, President, AIA; B R Mehta, Sr Vice President, Reliance Industries; Raghavendra Rao, Vice-President, Frost & Sullivan; P Mahajan, Director(Technical), Engineers India Ltd; V P Raman, Divisional Director, Engg, Mott McDonald; U S Deshmukh, Group General Manager, ONGC and Ram Keswani, Chairman, VES Institute of Technology.

Nandakumar, President, Automation Industry Association (AIA), Chairman & Managing Director, Chemtrols Industries Limited said, "AIA brings together for the first time, all the leading automation technology players in the country for a common and customer focused cause. The Association s primary aim will be to increase knowledge and awareness levels when it comes to cutting edge automation technologies and help Indian industry leverage these for greater productivity, efficiency, quality and consistency - the key to global competitiveness. India is behind the curve on deployment of automation technologies in manufacturing and maintenance. Less than 1 percent of manufacturing GDP comes from automation and instrumentation, whereas in developed economies the percentage is more like 5 percent. By 2020 India needs to go Global and that is possible only with enhanced investment in automation."

In the current automation scenario, islands of automation have created several challenges because the lack of integration has impacted operational excellence improvements. While developed countries have already started focusing on the integration aspect, the Indian manufacturing sector is still nascent with regards to the current levels of adoption of manufacturing solutions.

Raghavendra Rao, Vice President, Frost & Sullivan said, "India is a perpetual nation having perpetual growth. Challenges in automation adoption that we face in India are availability of cheaper alternatives, lack of clarity on ROI and lack of clear regulation. India has the largest bank of skilled workforce where there is money, market and people. We have to give a serious look on lower margin and higher growth."

He further added, "Increasing demand from manufacturing activities in the country has forced manufacturers across different sectors to focus on attaining operational excellence. This would also necessitate the integration of automation and business systems, resulting in a shift towards the global trend of complete shop floor to top floor integration."

Automation Adoption in Key Sectors
In India, levels of automation in most industries are far from their respective global norms. The penetration of automation in sectors such as food and beverages and mining, is below global standards and hence these sectors lag behind in terms of competitiveness. Apart from financial aspects , one should view spend on technology as a performance enhancer, rather than an expense.

Power, oil and gas and automotive industries have always been leading adopters of different automation technologies. The complexity of processes and need to optimise plant operations as well as enhance margins has resulted in oil and gas being at the forefront of automation adoption.

U S Deshmukh, Group General Manager, ONGC, said, Oil and gas industry is the major user of automation. Automation industry can lead us to a better environment. Safety and security is the major concern in oil and gas sector and automation plays a major role in providing security solutions.

Given the rapid progress in the automotive sector and the fact that India is becoming an innovation hub for small cars, the adoption of automation technologies has increased. Following the progress made by these sectors, other sectors such as chemicals and fertilisers, cement, and metals among others have started to realise the benefits of adopting advanced automation technologies.

Investing in intelligent automation and control systems to optimise manufacturing, plant optimisation, and control and process monitoring systems, is the way forward for the Indian manufacturing industry. In this increasingly competitive and globalised environment, India continues to experience inertia in keeping up with global trends or in adopting new technological innovations.

As India progresses in its pursuit to become one of the preferred manufacturing destinations, current practices have to make way for adoption of 'everything smart'.

Manufacturing Sector to Drive the Next Phase of Economic Growth: Manufacturing has been an important contributor to India's GDP, revolving rapidly over the last two decades, since economic liberalisation in 1991. The manufacturing sector has contributed a consistent share of around 15 percent of the GDP over the last decade. However, compared to global benchmarks of manufacturing s contribution to GDP in advanced economies, it is evident that Indian manufacturing has massive untapped potential. One of the critical aspects that finds resonance in global manufacturing is the focus on Automation as a change enabler. Developed economies and certain developing economies have adopted automation to improve process efficiency and quality parameters.

Manufacturing will play a vital role in India s survival from turbulent economic crisis and in driving India s economic growth. But, it is automation that will make the difference between survival and thriving, and, between incremental contribution and rapid industrial revolution. Automation market participants with their global expertise and vast resources have the potential to transform current Indian manufacturing practices and bring these on par with global standards.

This will enable manufacturers to attain global manufacturing competitiveness even as they capitalise on India s inherent strengths. India has witnessed a growth of 10.9 per cent in capital investments in manufacturing over 2004-11. Manufacturing has accounted for nearly 15.4 percent of the GDP in FY 2011-2012, belying its immense actual potential. If India is to supersede the current advanced economies, the capital investments in manufacturing automation should touch USD 2000 million by 2016.

The report highlights that the advance economies continue to drive innovation in manufacturing and automation sectors. It stats, "Manufacturing in advanced economies has gone through various stages of evolution, shapes at each stage by the imperatives of its time. The present is no exception." Futher, the report talks about how automation has evolved "to meet the changing needs of the manufacturing and business environment."