Bringing Manufacturers to the Tech Table

Ramesh Subramanian,
Global Delivery Head, Blue Star Infotech.
Information Technology (IT) is playing a pivotal role in the manufacturing sector. In this article, Ramesh Subramanian, Global Delivery Head, Blue Star Infotech, highlights some of the IT trends in the manufacturing sector. The article further talks about the relevance of digital technology and the role of IT in chemical industry.

As the manufacturing sector witnesses a paradigm shift from implementing traditional techniques to using contemporary mechanisms for improving operational capabilities, one can’t help but credit the technology or IT industry for playing crucial role in enhancing the manufacturing process. International Data Corporation (IDC) predicts that by FY16, the business opportunity in the manufacturing domain will be valued at USD 68 billion in IT Services. The reach of IT has been boundless and industries across verticals have benefitted in terms of revenue as well as quality with the integration and incorporation of IT or IT services in their systems.

The adoption of technology in Indian manufacturing sector has been slow for years, barring a few like automotive, chemical manufacturing which are at par with their global peers. The manufacturing sector was stagnant for years with a declining contribution to national GDP, and plethora of complicated challenges like unskilled worker, poor infrastructure, lack of vocational training, use of traditional tools and technologies making it incapable to compete in the global market.

However, the launch of the ‘Make in India’ campaign has given a boost to manufacturing sector and is luring even the smallest of the small manufacturer to go big, there is only one industry they are pinning their hopes on to realise their vision of increasing output – IT/Technology!

Today’s manufacturing enterprise, is juggling a range of conflicting demands. From reducing lot sizes to increasing product flexibility and from improving product quality to reducing delivery time, manufacturers are left with no choice to optimise resources, improve efficiency and to satisfy customer demand. To achieve this objective, producers must have access to correct, reliable and timely information. IT tools such as Database Management Systems (DBMS), Enterprise Resource Planning Systems (ERP), CRM and computer-aided design tools support the manufacturers to finetune its processes as needed.

IT trends in the Manufacturing Sector
  • Metamorphosis of the Manufacturing Model: Large scaled centralised manufacturing plants are now passé. Current units comprise of a network of plants located closer to centers of demand. This emphasises on the optimum collaboration between logistics and supply chain divisions since manufacturers seek to reap maximum benefits of lean processes in a widely dispersed setup. Visualisation and tracking technology play an important role in this process.
  • Hybrid Solutions: Producers have begun to rely on technology to solve manufacturing-specific problems. The application of mobility platforms to enhance supply chain systems is a shining illustration of emerging business processes. Another indicator of this evolving aspect of the manufacturing is the reliance on big data and business intelligence to draw and analyse market trends which forms the foundation of determining output levels
  • Sustenance and Design: Sustainability is one of the vital elements that manufacturers focus on in order to stay ahead of the curve. Sustainable manufacturing requires a total makeover in design which will enable production of environmentally sustainable end products. Integration of IT enables organisations to create significantly differentiated products
  • Agility and Simplicity: Today, manufacturers are looking to do away with complex processes and swap them for smooth, swift and seamless internal business operations. By eliminating outdated techniques and by focussing on facilities that enable faster ‘lift and shift’ operations is allowing firms to move their centers of production closer to the point of demand
  • Virtualisation and Digitisation: With the application of Big Data and predictive analytics, mobility, social media to day-to-day activities, more and more manufacturers are using simulation and virtualisation tools to understand the aspects such as demand parameters, customer behaviour and products approximate performance levels under virtual conditions. This reduces testing time required as well as the time-to-market for the product

Role of Information Technology in the Chemical Manufacturing Industry
Peter Drucker famously said that “Innovation is the fuel of corporate longevity. It endows resources with a new capacity to create wealth.” Technology has and will play a very crucial role in chemical manufacturing sector due to its complex nature of operations. Chemical manufacturers need a very holistic view of their operations keeping in mind the profound challenges they have – rising input costs of feedstock and energy, competition from emerging countries, complexity in accessing customer demand, constant product innovation and stringent environmental regulations.

The digital technologies will bring in major impact on the chemical sector. Digital technology innovations such as visualisation, artificial intelligence, analytics and BI are playing a crucial role in creating a vast, in-depth repository of valuable data. The chemical industry is using IT tools to churn out wealth of information from this data that is helping them to improve operational efficiencies and reduce costs.

Relevance of Digital Technology
By embracing digital technology chemical manufacturing companies are well positioned to grow, collaborate and have a competitive advantage in the industry. Some areas where technology will play a crucial role in chemical manufacturing sector is given below:
  • Improved Communication and Collaboration and Understanding Changing Market Demand: Digital technology works as an enabler for improved communication and collaboration within supply chains. This is an important factor that differentiates a small time chemical manufacturer from a market leader.
  • Favourably Contributes to the Environment: Often perceived as environmental hazards, chemical industries are now turning to IT in order to reduce carbon foot print of its waste materials. Technology tools are providing them with reports on measuring output capacities of their plants and their corresponding waste products. Manufacturers are able to regulate production capacities in a way that the output does not adversely affect the environment.

According to a research study conducted by IDC on a sample of 192 manufacturing companies from the Fortune 500 companies, it is determined that chemical industry approximately earns USD 800 billion in revenue and is growing at a rate of 4.4 per cent. In its endeavour to improve its customer reach and increase revenue, the chemical industry is now updating its traditional processes with the help of technology to work closely with its distributors and develop its supply chain orientation. Some of the key areas where IT is supporting the chemical industry are given below.
  • Improving Customer service: Previously, this industry may not have given as much importance to customer service as it does now. Today, chemical manufacturers realise the importance of repeat business and the cost savings it renders vis-a-vis finding new clients. Many manufacturers are relying on IT to develop a robust customer service technology roadmap that will help them to resolve the shortcomings in their approach in fostering strong customer relations.
  • Social Media Applications: For the chemical manufacturers, social media tools goes far beyond getting ‘likes’ or posting fancy pictures of its equipments. Social media serves a far greater purpose in terms of garnering customer insight, researching on markets trends and improving marketing capabilities. Also, trend tracking and adjusting supply chain are additional benefits that social media offers to this sector.
  • Big Data and Analytics: The chemical manufacturing process is not only complex but also requires collaboration among different divisions of a plant. In order to ensure a smooth trajectory, IT provides support in ensuring that production processes are regulated and optimum production levels are identified. This reduces unscheduled downtime and maintenance costs thus earning higher returns on investment.

Technology is relevant to all manufacturers today regardless of their size, revenue or area of expertise. However, it is necessary that manufacturers employ those tools that best suit their business in order to reap maximum benefits. With the amalgamation of IT with production processes, the industry is no longer operating in isolation but rather in collaboration. By employing IT tools correctly and focusing on digital transformation India can definitely realise the vision of making the nation a manufacturing hub.