Robots add significant value by providing several advantages over manual labour
Published by : Industrial Automation
Darshana Thakkar, MSME Transformation Specialist and Founder, Transformation – The Strategy Hub.
Over 50% of industrial robots in India are used in the automotive sector. What are the factors inhibiting growth in other sectors?
India is a young country. The rising income of the middle class and a higher percentage of youth is the reason for the increasing vehicle demand. India was the world's fourth-largest manufacturer of cars and the seventh-largest manufacturer of commercial vehicles in 2019. The industry attracted Foreign Direct Investment (FDI) worth US$ 24.5 billion between April 2000 and June 2020 accounting for ~5% of the total FDI during the period according to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94% during FY16-FY20. Two-wheelers made up 73.9% of the vehicles exported, followed by passenger vehicles at 14.2%, three-wheelers at 10.5%, and commercial vehicles at 1.3%.
So increasing demand, price competition and large players in the sector that too with FDI support are capable to make a huge investment in Industrial robotics and having shorter RoI.
On the other hand, the MSME sector which is the backbone of the Indian industry contributes 30 to 35% in the GDP of India and contributes 45 to 50% in Exports. Out of approximately 6.33 crore MSME, only 1.5 % of companies fall in the medium enterprise.
The major hindrance in the growth of industrial robots is the higher initial cost and longer payback period. In the long-term, the robots add significant value by providing several advantages over manual labour in terms of operating costs and productivity, but the RoI generally lies in the period of 4 to 6 years, which deters the market significantly. For MSMEs, RoI still looms over the strategies of short-time industrial operators, thus acting as a hindrance to the market emergence.
According to my experience with the MSME sector, another important factor is awareness about the features of the product along with fear of the unknown and resistance to change.
Robots boost productivity. Can India scale up manufacturing with such a low robot density (4 per 10,000 employees)?
The higher initial investment is the major challenge for the adoption of robots in business operations. However, challenges faced by our manufacturers due to pandemic in terms of migrant labour, social distance and other norms of new normal will be proved a game changer in the coming years.
The low levels of automation in the Indian manufacturing industry itself will be the key driver for growth in the industrial robot space in India, and we can expect this growth trajectory to continue in the coming years once the Covid-19 pandemic slows down its effects.
On the other hand software robots or bots are used to automate some of the process-oriented work streams in enterprise functions such as finance, HR, procurement, etc., and include technologies such as Robotic Process Automation (RPA). India is one of the fast-growing markets for software robots, driven by the presence of a large offshore shared services market and global in-house centres.
One major reason advanced for the low penetration of robots in India is the abundance of labour. How valid is this reason?
Yes. This is right. As mentioned above in the first question, MSME companies contribute significantly to the GDP and exports of India. In presence of an abundance of labour, higher initial investment along with delayed RoI is avoided by many players. However, because of the pandemic the migrant labour and social distancing requirements have created huge disruption in business operations. As a result, the penetration of robots in the new normal environment of the Covid-19 era is expected to increase at a higher rate.
Covid has boosted the applications for robots in general, service robots in particular. Will this now become the new trend?
Yes, Service Robots have very high potential in the Indian market for both in-house applications as well as shared services centres. During and post lockdown in 2020, people in our country have become more tech-savvy. People who never used a smartphone are now managing many things through mobile, online payment, purchase, etc. Social distancing norms and the need to work remotely pushed people to adopt technology faster. Many organisations have developed easy-to-use plug-and-play software solutions which are affordable to Micro enterprises of our country.
India is the second-largest mobile internet user in the world. In 2020 mobile internet users were approximately 44.8 crore. Many automation software has been developed in India in recent years which are mobile-friendly. This mobile app revolution for small businesses will prove a game-changer in adopting service robots.
A new emerging trend for robots in manufacturing is the evolution of autonomous mobile robots. Are these cost-effective?
Autonomous mobile robots are currently seen as a critical component of ‘Industry 4.0' and their adoption rate is expected to increase in the next few years.
The CapEx costs and savings of an AMR system is based on several factors:
1. The type of AMR required to handle the product and operational requirements
2. The number of AMRs required to support the required volume, and
3. The scope of the controls and software required to manage the AMR fleet and operational requirements.
As the initial investment is higher in AMR, but the result it provides is gaining popularity in mid to large size organisations and specific to warehouse management. Following are the key benefits justifying the cost despite high initial investment:
a. Reduced labour cost (up to 70 % cost saving in labour cost)
b. Scalability and flexibility
c. Complex movement tasks are managed easily and safely with internal coordination of different AMR with the help of software
c. Increased safety
d. Reduced accidents
e. Less expensive than many fixed systems (e.g., conveyors and sorters), and
f. Less space is required compared to other fixed systems in many cases.
With increasing payload capacities, can Cobots replace the lighter industrial robots?
Cobots are designed to work alongside human employees, while industrial robots do work in place of those employees. A cobot can assist employees with work that may be too dangerous, strenuous, or tedious for them to accomplish on their own, creating a safer, more efficient workplace. By contrast, industrial robots are used to automate the manufacturing process almost entirely without human help.
Cobots are more easily programmable than robots because they are capable of ‘learning’ on the job. A factory worker can reprogram a cobot simply by moving the arm along the desired track. From there, the cobot will ‘remember’ the new movement and be able to repeat it on its own. Industrial robots cannot be so easily reprogrammed, and require an engineer to write new code for any changes in the process to be implemented.
As cobots are working near humans, they are not designed for heavy manufacturing. But it will take over lighter load applications in manufacturing.
How relevant is RPA in manufacturing? Globally, several companies are now increasingly using RPA for back office activities related. Is this gaining traction?
Robotic process automation (RPA) is the use of software bots to automate highly repetitive, routine tasks normally performed by knowledge workers. Automating repetitive tasks saves time and money. RPA adds value by completing tasks faster, allowing employees to perform higher-value work.
RPA is helping to automatically process and store data without having to perform manual data entry, generate financial reports without spending considerable amounts of time in Excel, and execute customer outreach campaigns without spending hours in the CRM program.
RPA’s benefits extend to both the back office and the C-suite, dramatically improving the efficiency of mundane, administrative tasks. Roughly 25 percent of a CEO’s tasks could be automated through RPA.
Darshana Thakkar is MSME Transformation Specialist and Founder, Transformation – The Strategy Hub. An Electrical Engineer followed by MBA – Operations with rich industry experience, Darshana is an expert in transformation, cost reduction, and utilisation of resources. She has invested 25 years in transforming Micro and Small Enterprises. Her rich experience in resolving pain areas and real-life problems of SMEs helps organisations achieve quick results. Her expertise in managing business operations with limited resources helps clients transform their business practices from person driven to system driven with existing resources.
Darshana has helped many organisations to increase profitability and achieve sustainable growth. She is passionate to support the start-up ecosystem of our country. She is associated with CED, Government of Gujarat as a Business Function Expert in the Entrepreneurship Development program, as faculty for industrial subjects in the Second Generation Program (SGP), and as a start-up mentor and member of the start-up selection committee in the CED incubation centre.