The manufacturing industry has steadily grown in India. We have manufacturing capabilities in all sectors and product categories. However, we keep discussing about the competitiveness of Indian manufacturing in global market. Every industry must compete in the global market. Even if they do not export, they have to compete with products imported from other countries.
The NITI Aayog has projected that our GDP could touch the $5 trillion mark in the next five years but that, however, cannot be achieved by relying on domestic consumption solely; industry must increase its share in the global market through exports.
Profit is, however, not an indicator of excellence, therefore manufacturing excellence initiatives are essential to increase competitiveness. Management systems have evolved with time to find various parameters contributing to excellence and to measure the score on each of these parameters. It is a very analytical and systematic approach wherein the subjective element is replaced by the objective element. This analysis leads to identifying gaps and once gaps are identified, they must be removed for the industry to gradually move into the direction of excellence.
I believe that every industry must have a dedicated team to work on manufacturing excellence that works closely with operations but is independent of normal operations. Improvement processes involve massive data collection, the analysis of which helps identify several opportunities in the continuous process. Some of the steps that the industry can take towards this are as follows:
- Technology upgrade: Every plant, small or big, must have a technology upgrade programme where a dedicated team studies the development in the specific area; benchmark against global industries; prepares a plan; and executes the same to keep pace with changing technology.
- Quality systems: All industries must have quality systems in place. Quality assurance teams must be set up independent of quality control and production. All procedures must be written down, and deviation from the standard operating procedures must be recorded.
- Internal audit: All industries must have internal audit system in place. The scope of internal audit should cover financial, commercial, and technical activities. Audit process must identify deviations from standard procedures and bring it up for discussions so that corrective action is taken.
- Quality by design: Plant must be designed and machines/equipments must be selected to deliver desired product quality .
- Scale of operations: The small capacity plant has a limitation that makes it difficult to be competitive, hence the scale of operation must be increased that can justify investment in good machines, in quality systems and employ competent persons that can improve both quality and productivity.
- Knowledge sharing: Industry must facilitate sharing of knowledge with all stakeholders. It can also be called an inclusive approach where the commitment of top management to quality productivity, environment and safety is conveyed to everybody and excellence becomes the agenda of the whole company and not only the top management.
- Strengthening the supply chain: Large corporates must work closely with their suppliers to ensure that supplier systems are strengthened. This will help the industry and will also improve the suppliers’ performance.
- Maintenance practices: Maintenance function must be given importance to ensure consistent production, consistent quality, and cost optimisation.
The FICCI-EFESO Consulting (India) Survey on Manufacturing Excellence that was released during the FICCI-UNIDO Dialogue on Swachh Udyog – Manufacturing Excellence in India on 12 April, covers three axes of Manufacturing Excellence viz., Process, Human Dynamics, and DigiTech. Through a range of questions, the survey tried to understand the maturity of the Manufacturing Excellence journey in Indian organizations.
The survey says that while 50% companies adopt either of structured operational excellence methodology such as TPM, TQM, WCM, etc., while only 13% are leveraging digital technology to predict product, equipment, and process failures. 41% companies of those that participated in the survey said that they have adopted traditional Key Performance Indicators (KPIs) to ensure people work towards company objectives, while only 6% understand Key Activity Indicators (KAI).
The survey report will be available to all on the FICCI website, and I urge everyone to go through it to understand the barriers that the Indian companies faced and the solutions they adopted. The survey received over 150 responses from Industry leaders across manufacturing sectors.
The author is Chair, FICCI Taskforce on Manufacturing Excellence