Digitalisation of organisation at each level is required
Published by : Industrial Automation
Atul Dave, Managing Director, SICK India.
Barring a few engaged in essentials, the manufacturing sector has come to a near standstill in past weeks. What are the dimensions of impact of this lockdown?
The lockdown is definitely going to impact almost all the sectors – manufacturing, services, etc. Except for Pharma and Food industries, all companies have stopped functioning. This will impact the revenue and profit generating ability as well as entails long term problems of sustainable workforce, cash flow and credit crunch. The investment decisions have almost come to a stop and most of them are either delayed or cancelled. We already hear GDP forecast in the range of 1 to 2% from projected forecast of 5 to 6%.
With supply chains disrupted, how difficult would it be to restart regular operations after lockdown? How do you plan to cope with shortage of skills in this phase?
Every organisation may respond differently to the prevailing situation and changes offered by the lockdown. Though every company is more than willing to kick start the operations once the lockdown is lifted or relaxed, most lack the confidence about opportunities available in the market and how the business will progress. The new set of rules post lockdown and safety measures will certainly affect the way business was being conducted. More cost has to be incurred to ensure that we maintain social distancing and keep our workplace and workforce safe. This additional cost needs to be passed on to the ultimate customers. Moreover, the tight capital market situation will result into cash flow problems if business sentiments continue to be poor. The support offered by government for MSME sector will be handy but we need to wait and watch how effective it will be.
It is very clear that lockdown cannot be continued forever. The easing of restrictions and lockdown will slowly result into manufacturing activity kicking in with less workforce and their first priority will be to execute the backlog and the pending orders. Once normal manufacturing resumes, even at low rate of production, I feel confident that slowly it will start moving the giant wheel of Indian economy. Shortage of necessary skill to cope during such situation may force us to look within and develop in-house skills or look for hiring such skills on short term basis if at all it is absolutely must. Innovation and smart thinking may have to compensate for shortage of skills since in current time, no one is going to invest on additional skills which become redundant once the normal situation is restored.
Going forward, what strategies should manufacturing companies adopt to minimise the impact of lockdown like situations in future?
One cannot prepare for such unforeseen events like the Covid-19 pandemic. However it may make us more agile and alert in future. Companies may always think twice before going for big investments or big projects with longer time line. Everyone would like to be more lean and fit and ready to shed extra fat. Minimising the inventory, tighter cash control, cost cutting measures and just in time delivery, etc., will be the norm. Investment in human resources will also be curtailed and people might look for temporary hire or project based hiring rather than investing huge amount in people skills. Digitalisation of organisation at each level is required. Every process needs to be automated and should be devised in such a way that it is possible to control and monitor it remotely via digital means without physical presence.
Covid-19 has reshuffled the pack, as far as preferred destination for outsourcing is concerned. How should India gear up to derive maximum advantage?
We expect that more and more companies will look at India as a preferred sourcing hub for their requirement of raw materials, finished products or machineries. Changing world politics post Covid will accelerate this process. India might become the preferred manufacturing hub if more companies shift their base to India. In order to derive maximum advantage, we must provide prospective businesses with proper infrastructure in form of Land, Electricity, Roads, Port, Air/Sea connectivity, etc. Ease of doing business with less regulation and speedier resolution of approvals from government should be the mantra. We should also look into reforming the labour laws to attract global manufacturing in India.
In what way has Covid-19 changed the parameters for evaluation of digital transformation in terms of cost, RoI, and manpower?
The process of digital transformation has received a boost due to Covid-19 with those undecided now feeling the need to digitise everything. Though India has taken a leapfrog in digitalisation in certain areas like Banking/Finance, etc., the current Corona scare has led all the sectors kick starting on digital foot prints including education sector, which is currently conducting digital classes using apps like Zoom, Google hangout, etc., covering hundreds of students. The work from home culture has drastically reduced the travelling cost as well as the cost to run the offices. Many companies are thinking of giving up office space and adopting WFH, which is also a boon to employees who are spared the gruelling commute to work that causes much loss of time besides mental stress. More digitalisation will eventually lead to optimisation of manpower with some roles becoming redundant. However it is premature to comment much on this at this stage.
Will this lead to an increased demand for robots and cobots?
Non availability of labour post lockdown and social distancing norms at manufacturing places coupled with additional benefit of monitoring and controlling manufacturing places from remote will certainly lead to exponential surge in demand of robots. In India, we have less automation and use of robots compared to our more advanced western counterparts, so this may now change with more automation of plants and increased use of robots. Since you cannot do away with presence of human workforce at manufacturing places, cobot will become a necessity. More and more collaborative robots are required so that both Robots and Human can work together without any harm.
Since the future is going to have many people in the ‘work-from-home’ status, how do you plan to change your recruitment, training and other HR policies?
One change I foresee in recruitment is that we look for a talent which is well versed in digital aspect of business. One who can work remotely without any supervision and yet produce the results. The traditional face to face training for employees will be passe. We expect that HR policies will also undergo changes to accommodate new environment where many people will opt to work from home full time or for some days of the week and the way we measure key performance parameters of the employees since the physical contacts will be less.
Atul Dave is a Mechanical Engineer with over 35 years of industry experience encompassing all major verticals like Factory Automation, Logistic Automation and Process Automation. After working in Senior Management roles like CEO/MD in various European MNCs engaged in Automation and Sensor business, Atul joined SICK in early 2014 as Managing Director and is successfully leading the organisation.