Disruption & Digitalisation – A Perspective
Published on : Sunday 05-04-2020
Just when we felt disease has been largely tamed, the recent pandemic makes us become more humble, says Sivaram PV.
Business world is in a state of disruption. The disruption has been sudden and complete. The extent and duration of disruption is as yet not certain. Only certainty is that it is huge and global. But, as we lurk in a state of confusion and shock, and reeling under the impact of the disruption, as well as the impact from knee-jerk responses by government, people and business world, it is a time to also review and take stock, and then to formulate a strategy to minimise the effects. All along in the previous decade and longer, various organisations and governments announced their “VISION 2020”. But surely none of us had a nightmare like what has come about today! But then we are not going to just wait for the crisis to be over. We want to make action plan for what must come tomorrow. Do note, we like to analyse the situation from the stand point of our expertise, which is application of automation in industrial manufacturing, and application of digitalisation.
Relevant questions at this juncture would be:
- Is this the first time that the world is experiencing such a massive disruption?
- How did we handle it earlier?
- What is different this time round in the nature and size of disruption?
- What has caused these differences?
- How was our preparedness to handle such events?
- What tools are available to us, and what we could have put in place over the years?
- How shall we move forward as soon as the worst is over?
- How can digitalisation help?
Let us take up these questions one-by-one.
1) Is this the first time that the world is experiencing such a massive disruption?
Definitely this is not the first time! Almost exactly hundred years ago, the world was hit by a pandemic of influenza, called Spanish Flu. But at a periodicity, repeatedly, we have been hit by natural calamities, by man-made ones like world wars. For business and manufacturing in particular, there have been also financial meltdowns like a near collapse of banking and finance a little over a decade ago. We have been getting early warnings, every now and then. I take an example of climate change. It looks gradual, and we think we can extrapolate, but there is a potential that it can suddenly become a massive change.
All disruption is not necessarily negative. An example of a positive disruption would be invention of the microprocessor. Another could be advent of Internet. And then the smart phone. The latest, where the effects are yet mild, but with a potential to become massive is Industrial Revolution 4.0, also called as Digital Transformation.
2) How did we handle it earlier?
We struggled our way through! We took recourse to strong and wise leadership, and people worked unitedly and made sacrifices and we always turned out after the episode stronger, and hopefully a little wiser. But also, each time, we took help of technology in small and big ways. The challenges raised by the crisis also gave impetus to innovation and helped advancement of technology.
3) What is different this time round in the nature and size of disruption?
Actually it is the world that has changed profoundly! We are much more connected, not just in interpersonal interactions in social and cultural matters. Any news are transmitted around the global at the speed of internet. Even rumours, speculations and fake news spread at the speed of Whatsapp. This has the effect of amplifying effects of even small changes, even in any remote corner of the world.
In business and industry as well, supply chains and markets are widespread and global. Any changes, any shortages or delays, etc., has a domino effect in most unexpected ways. An epidemic in China could create shortages of medicines round the world. Hence this time round, and in next times, there will be no insulating any one country or industry or activity from the effects from the rest of the world. Like it or not, we are in the same boat.
4) What has caused these differences?
We are on the eve of third decade of second millennium. Our markets are bigger, connectivity is tighter, and dependencies of people and businesses on one another and on inter-operation are larger. All of these differences arise from just one factor which is both the problem and the solution – technology. Speed at which transactions are executed is very high, which has also fuelled expectation of results to be similarly high! Compared to every other period since the Renaissance and the First Industrial Revolution, technology has entered into everyday life at an increasing pace. The growth has been even higher than a geometric progression, it has been exponential. Hunger and poverty, even though not eradicated, have been driven back.On the dark side, we have adversely impacted nature and the environment. Climate change is lurking to take a big swipe at us. Just when we felt disease has been largely tamed, the recent pandemic makes us become more humble.
5) How was our preparedness to handle such events?
Well, to put it rather bluntly – less than satisfactory. Various measures were announced and implemented worldwide rapidly and efficiently, but still there is huge suffering. False information spreads faster than authentic instructions. Individual acts of leadership and courage of many people get foiled because of indiscipline of few. In other words, world has known what could be fallout of such an event like a massive outbreak of an infectious disease, yet systemic preparedness was less. Most glaring is a missing training to people at large regarding the essential steps in event of a massive outbreak.
6) What tools are available to us, and what we could have put in place over the years?
In terms of society and governments at large, many tools are available. These are available as pieces of information, available as folklore. However, all this information is in an unorganised and diffused state. There are several alternative prescriptions and remedies. According to me, a very important step would be education and training. Specific topic would be reaction in times of national emergency. This drill must be practiced and honed periodically and regularly.
As in every such emergency, a huge stress falls on manufacturing industry. At early stages, demand for goods will drop sharply. Manufacturing capacity may also drop, due to less availability of skilled workers. Not every industry can scale down quickly. As recovery commences, demand will grow, but may be for different goods or goods with a different specification. This could mean adjusting the processes for a different product mix.
Recovery having started, has a potential to surge suddenly. At this point, ability to scale up at short notice is the key, else market gets captured by an agile competitor.
So, what tools are to hand?
Digitalisation – or Industry 4.0 has been specifically conceived for this quick and nimble addressing of sharp variations in demand. Our government has been trying to nudge industry, particularly MSME, in this direction. Another tool is more comprehensive and inclusive automation of production process. This should help to quickly ramp up or down production of essential goods and services. We have a large pool of technical manpower. There should be a training system to prepare them to handle the complexities of occurrences like the one at hand.
7) How shall we move forward as soon as the worst is over?
Let us begin by hoping and praying the worst will be over very soon. There are two phases for the way forward. The first is to participate in the recovery, to reach normalcy early. The second would be to learn lessons out of the episode – things that went well, and things that could have been better. Thereby, start implementing the learnings back to their own system. For the phase one, companies should prepare to deal with small deviations in delivery schedules and perhaps in quantities. Government should also help by condoning delays in tax matters, etc. The aim should be to bring the local subsystems to gear at the earliest. The phase two is important. Usually when phase one is done and things are recovered, a tendency arises to go into business-as-usual mode. This should be actively avoided.
- Let us be very aware and conscious that there will be in future some more disruption from yet unknown quarter!
- For business and industry captains, best way to mitigate the effect of disruption is – Insist on standards – products and procedures.
- Rely on open standards. Open standards will help you to reduce single-vendor dependency.
- Force inter-operability from vendors and implementers.
- Lay down procedures for dealing with emergency situations and periodically reinforce them.
- Give back to the system by participating in educating students and apprentices.
Sivaram PV, Non-Executive Chairman, B&R Automation India, has been associated with the company since its inception in India. Leader of B&R Education Network, he is currently engaged with Educational Institutions to add elements of Automation into Engineering curriculum of all branches.