India needs profound digital transformation and strong IT security infrastructure to embrace Industry 4.0 in the automotive sector, states a report by Grant Thornton – CII. Excerpts from an interview with Saket Mehra, Partner, Grant Thornton India LLP about what this entails.
As the manufacturing and automotive sector across the globe is getting ready for the fourth industrial revolution – Industry 4.0, India is also gearing up for this change. The country is certainly in a position to gain immensely from this transformational paradigm shift in the automotive and transportation industry. However, India needs a major transformation in the functional areas of manufacturing industry to rapidly implement the innovations and embrace this evolution swiftly. Excerpts from the interview:
Could you provide an overview of the status of the automotive manufacturing industry?
By 2020, India is expected to become a major automobile manufacturing hub and the third-largest market for automobiles in the world, contributing approximately 25 per cent of the GDP. With this vision, we see manufacturing companies planning to dramatically increase their level of digitisation and investment in data analytics as a foundational capability to drive innovation and significant improvements in efficiency. This would also lead to key focus on urbanisation, personalisation and digitisation in the manufacturing space. Our report states that Industry 4.0 is expected to transform manufacturing in India by bringing operational efficiencies to manufacturing industries like automotive, electrical and electronics. The industrial revolution will enable information to flow not only from manufacturer to product, but between producers, products and, most importantly, customers. The report further emphasizes that the ability to embrace Industry 4.0 and use the opportunities that will rapidly present themselves will be a key to success in the new global market.
Why has Industry 4.0 assumed so much importance?
World over, the new term, Industry 4.0, is fast gaining momentum. This new, disruptive technology has recently found its curve of progression and has transformed and reshaped the way things are viewed in the manufacturing segment, which also includes the automotive sector. This business era, after Industry 4.0, is viewed as a basket of Information and Communications Technology (ICT)/digitally-enabled technologies. These include developments in production equipment, smart finished products, data tools and analytics that use Internet of Things (which can include 3-D printing, prototypes, connected cars, product lifecycle management, cyber physical production systems among others.) The Indian automotive sector is witnessing a boost and thrust from the Government of India which emphasizes and focuses on introduction of new and revolutionary production processes into the Indian manufacturing system by keeping ICT at the heart of development. Along with this, there is also a great thrust from programmes/policies that include Make in India, introduction of GST and FDI policies (100 per cent foreign direct investment is allowed under the automatic route in the auto sector).
How will this evolution happen?
An industrial change is likely to be witnessed which could be fuelled by the advancement of digital technologies. Prospectively, the fusion of physical and virtual worlds into a cyber-physical system may have a huge impact on every element of manufacturing and the automotive sector. In comparison to Industry 3.0, the traditional industries foresee unprecedented degree of integration between information, communication and manufacturing systems at their disposal, including: a) smart sensors that knit together an industrial IoT, allowing real-time data collection during production processes, b) ubiquitous broadband, allowing large amounts of data to be transmitted between people, machines and production sites, c) cloud computing, allowing the instant storage and availability of date at any location, and d) big data analytics, allowing huge volumes of data to be processed collaboratively. It can precisely be said that Industry 4.0 is a convergence of disruptive digital technologies that are set to change the manufacturing sector beyond imagination, driven by astonishing rise in data volumes, system integrations and connectivity, emergence of advanced analytics and business intelligence capabilities, machine learnings, and improvements in the transfer of digital instructions to the physical world. Companies may evince interest to initiate the efforts to digitise factories as is seen at Siemens, Bosch, Daimler, Deutsche Telekom and Trumpf.
Could you specify about its impact on the automotive sector?
Despite the broadness of the term, most agree that Industry 4.0’s impact on the automotive industry will be significant. There could be a 360 degree change in the way the sector is operating now. Industry 4.0 entails to handle massive volumes of data using business intelligence software to interpret, address and transfer that data to other parts of the business, back to the enterprise resource planning (ERP) system or supply chain partners. Automakers need to increase the number of feasible buildable combinations and require manufacturing processes that can handle large variations. A study of various simulations is the need of the hour. Direct interactions of OEMs with customers will help OEMs to understand and analyse customer preferences and shall help them to strategise a better market approach. Industry 4.0 is expected to bring forth the idea that advances in automotive technology will help the industry focus on key functional pillars such as technology, integration/collaboration and processes.
Will this lead to innovations and new developments?
Cyber physical system-based manufacturing and service innovations are two inevitable trends and challenges for manufacturing industries. Industry 4.0 is leading to major innovations in the automotive industry, as for instance, connected cars. These are vehicles connected to mobile networks and provide wide range of mobility services. It is a vehicle which is able to optimise its own operation and maintenance as well as provide convenience and comfort of passengers using on-board sensors and internet connectivity. It is believed that while the total cost of ownership of vehicles might remain stable for consumers, the dramatic increase in vehicle connectivity may surge the value of the global market for connectivity components and services to € 170 billion by 2020 from just € 30 billion currently. By 2030 it is expected that there will be over 400 million connected cars on the roads globally, up from 23 million from the levels reported in 2013.
Another significant development is automated driving. Autonomy is probably the term that best describes the destination point of technology industry’s trend line. Autonomous vehicles are those in which operation of the vehicle occurs without direct driver input to control the steering, acceleration and braking. Autonomous vehicles are designed so that the driver is not expected to constantly monitor the roadway while the vehicle is operating in self-driving mode. Autonomous vehicles use a combination of technologies to detect their surroundings, including radar, GPS, odometry (use of data from motion sensors) and computer vision. Autonomous driving technology features such as auto-braking, automatic parking and adaptive cruise control are already present in cars and fully autonomous vehicles are currently undergoing road tests by which the autonomous car market is expected to reach $ 42 billion by 2025.
Yet another development is seamless mobile device connectivity via Wi-Fi. The smartphone applications that help drivers track vehicle performance and perform diagnostics, as well as check on location, mileage and even fuel mileage are soon expected to become standard. Wi-Fi connectivity shall also enable software upgrades and new features to be streamed directly to the vehicle. One thing helping to drive the acceptance of Wi-Fi in the connected vehicle is 5G Wi-Fi. It allows drivers and passengers to easily sync and stream content within the automobiles, from portable devices straight to the in-vehicle infotainment system and
rear-seat displays. It also enables high-speed internet and cloud connectivity through LTE telematics or directly from a hotspot connection.
Are there any examples of initiatives taken by leading automakers?
A German luxury vehicle manufacturer has taken an active role in the promotion of Industry 4.0 through its involvement in some of the German government’s research projects. These include Cyber Physical Production Systems (CyPros), which aim to improve productivity and flexibility through the integration of intelligent systems in factories, which promotes flexible robot-based automation solutions. One of the most recent and futuristic examples is the use of Google Glass devices which is an optical head-mounted display designed in the shape of a pair of eyeglasses. It displayed information in a smartphone-like hands-free format. This technology is currently being used in the production of pre-series vehicles which serve as a kind of prototype to allow the company to discover any flaws before full production. The ‘smart glasses’ are fitted with a camera that allows employees to take photos and record videos which they can add to their reports to achieve greater accuracy than handwritten notes.
Is India ready to leapfrog into Industry 4.0
According to International Yearbook of Industrial Statistics 2016 published by UNIDO, with its ranking going up by three places, India has now been ranked sixth among the world’s 10 largest manufacturing countries. India is no exception to this global trend and is steadily increasing its share of global manufacturing GDP. All leading countries are embarking on major initiatives to promote manufacturing by adopting the advancements in internet and information technology arenas. The Indian government has launched the ‘Make in India’ programme. With a plethora of crippling regulations and under-developed infrastructure, the government is focusing more on enabling policies and improving infrastructure for certain key sectors. According to IBEF, the Government of India has set an ambitious target of increasing the contribution of manufacturing output to 25 per cent of Gross Domestic Product (GDP) by 2025, from 16per cent currently. There is no escape from integrating principles of Industry 4.0 with the ‘Make in India’ initiative if Indian manufacturing has to win against global competition.
Major Indian states are taking initiatives to adapt to Industry 4.0. Andhra Pradesh has taken an initiative to capitalize on the IoT potential in the country. The state government has approved the first-of-its-kind IoT policy with an aim to turn the state into an IoT hub by 2020 and tap close to 10per cent market share in the country. The Indian government has created Green Energy Corridors to bring in more renewable energies, make smart grids that will support the variable input of renewable energies and create storage. India has committed over USD 1 billion in this initiative and has started projects in many states, such as Andhra Pradesh, Rajasthan, Tamil Nadu, Gujarat, and Himachal Pradesh. India’s first smart factory, moving from automation to autonomy, where machines speak with each other, is being set up in Bengaluru. It is making progress at the Indian Institute of Science’s (IISc) Centre for Product Design and Manufacturing (CPDM) with an investment from The Boeing Company.
Bajaj Auto was one of the first automotive enterprises to initiate automation in the industry. It commenced the process of automation in 2010 and today it uses 100-120 ‘cobots’ (collaborative robots) in its production facilities. Maruti Suzuki manages seven process shops and five assembly lines by around 1,700 robots. Ford has managed to operate the assembly lines and body shop of its Sanand plant by 437 robots. Hyundai has also taken steps to minimise its labour cost by utilising over 400 robots in its Sriperumbudur plant. The production lines of Tata Nano consist of over 100 robots in the Sanand plant. Also, the need for customer services has increased with several non-automotive companies eyeing the consumer engagement channels beyond the point of vehicle sale. OEMs lose significant opportunities with respect to product planning, newer services, and time-to-market reaction with the lack of customer/vehicle data feedback.