“The tool and die sector must be prioritized because it is the ‘mother industry’, and if we are targeting a 25% contribution of manufacturing to GDP, this sector needs to be at the forefront”, says Ashim Sharma, Senior Partner & Group Head at Nomura Research Institute.
By Neha Basudkar Ghate
1- How is India positioned globally when it comes to automation adoption, especially in the automotive sector?
In India, the automotive sector has been leading in terms of robotic installations, but we are still far behind our global peers. One of the outcomes of this is that the manufacturing value-add, in terms of USD per person, is lower than in most other countries. We lag behind nations like Vietnam, China, Germany, the US, and many others. This indicates that a lot of our manufacturing activity has low value addition and is largely manually driven.
2- What are the key levers to increase value addition and improve manufacturing productivity in India?
To increase value addition and productivity, we need to look at automation. This will make us more competitive, which in turn can lead to higher exports and growth in the manufacturing sector. As a result, more people will find employment in manufacturing, where we currently trail behind other nations.
3- Should the push for automation be limited to large companies, or should it be broader across the value chain?
The transformation must happen holistically, not just at the level of large companies, but across the value chain. MSMEs need to be an integral part of this shift, and they will require specific support. For example, in Japan, automation adoption is happening industry-wide across the value chain. Low-cost automation will be crucial in enabling this.
4- What support systems or infrastructure could make automation viable for smaller manufacturers?
We should look at creating shared facilities for automation. A small manufacturer on their own cannot afford automation, but pooled facilities can be a solution, similar to the tool and die clusters in Taiwan, where a common heat treatment facility serves a group of suppliers. We can replicate this model to automate certain parts of the manufacturing chain. Initially, the government can help set up such shared facilities for clusters in specific areas, and eventually private companies can also come together to do the same.
5- Beyond infrastructure, what else needs to be done to ensure successful automation?
There is a need to upskill the workforce so they can be redeployed when automation comes in and function effectively in an automated environment. Additionally, we need to start manufacturing automation equipment within the country; otherwise, our import dependency will only increase.
We also need to promote human-led automation to complement workers’ skills. This will help reduce fears of job displacement. Lastly, it’s important to identify the sectors where we are not globally competitive today, but where automation can help us leapfrog ahead.
Electronics is one such sector that inherently requires a high degree of automation. By bringing in value-chain-wide automation, we can make a mark at the global level. This success could then serve as a base for automation to percolate into other industries. The automotive sector is another where this shift is already happening.
6- Why should the tool and die sector be prioritized for automation, and what specific technologies can drive this transformation?
The tool and die sector must be prioritized because it is the ‘mother industry’, and if we are targeting a 25% contribution of manufacturing to GDP, this sector needs to be at the forefront. In terms of automation technologies, the increasing use of simulations particularly data simulation is a key trend. Additive manufacturing is another area that will benefit the tool and die industry. Process automation is also essential; while some processes like machining and heat treatment are already partially automated, others still require advancement. Since individual players may not have the capacity to invest in these technologies independently, setting up cluster-based common facilities could be an effective way forward.
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