The Indian manufacturing sector is contributing 16 percent to the country’s GDP. To accomplish US$ 5 trillion economy, the manufacturing sector must develop at the speed of the service sector. Indian manufacturing should compete with Chinese and other Asian markets to attain this growth. According to the report of the World Economic Forum on Global Competitiveness, Indian manufacturing notably stays behind other rising Asian countries on Technology Readiness. India’s rating is 1.8 compared to 5.8, and it is of developed Asian countries.

Germany is at the top of technology readiness, globally. It is surprising to see that the Indian service industry is thriving on technology but its own manufacturing sector is falling behind. Indian manufacturing must jump from Industry 2.0 to Industry 4.0.

Industry 3.0 and Industry 4.0

Industry 3.0

Industry 3.0 was started with electronics. It was started around 1970 with the commencing of the use of electronics to fetch automation in production by the use of Programmable Logic Controllers (PLC). Such automation needed manual intrusions and inputs.

During this period, Information technology was put to use for data processing in manufacturing. It was started with Material Resource Planning (MRP) which grew into ERP in the 90s.

Industry 4.0

The Fourth Industrial Revolution is also known as Connected Factories. This is the period of smart machines, production facilities and storage systems that can independently exchange information. These are interfaced with business applications to activate actions and manage the manufacturing process without human interference. This exchange is made feasible with the Industrial Internet of things (IIoT).

Industry 4.0 incorporates the following –

Cyber-physical system: A mechanical tool that is carried out by computer-based algorithms.

The Internet of things (IoT): Interconnected networks of machine devices and vehicles rooted with automated sensing, scanning and monitoring potentials.

Cloud computing: Offsite network hosting and data backup.

Cognitive computing: Technological platforms that use Artificial Intelligence.

How do Indian SMEs shift to Industry 4.0?

Currently, Indian SMEs are using CNC and retrofitted machines on their shop floors. The use of PLC, the data logger is widespread. The process industry has executed Supervisory Control and Data Acquisition (SCADA) systems.

Utilization of Information Technology is becoming common. Finance and Inventory are handled through software. Many name this software as ERP but these are far away from the actual meaning of being Enterprise function. Real-time material and machine planning are not accomplished by many. The primary reason for not employing ERP in real sense is the accessibility of real-time data. Due to scarcity of realistic data this software is not conveying the benefits expected like lowering inventory, recovering availability and best application of the man and machine.

Some have seen many failed implementations of ERP in the SME sector. This has formed a negative opinion about what ERP can actually convey SMEs will have to know how to select the right ERP, right implementation partner and their own role in managing change in their organization for successful execution. SMEs should provide good emphasis on making their team mindset prepared for the alteration and adjust to the new way of working.

Industry 4.0

With the experience of working with several Indian large and SME companies, one of the biggest challenges is to persuade employees to enter data. Hopefully, Industry 4.0 will come useful for today’s industry as it does this work autonomously. In Industry 4.0, people will be connecting the machines and equipment to their ERP. This lets all the shop floor data accessible to ERP in actual time. This data can be quantity produced, quality produced, and quantity accessible in machine buffer.

In particular, from the SME leadership opinion, they can notice all the factory status and alerts on their mobile devices. This will aid them to be nearer to their customers than staying trapped in the factory premise.