India has its strengths in manufacturing and a strong supplier ecosystem to capitalize opportunity. However, the Indian manufacturers have to adopt best practices to eme reliable supplier base.
Energy transition presents itself as an imminent big opportunity and India is in a sweet spot to capitalize from this opportunity strategically between Europe and China. Considering that both are in two ends of the India has its strengths in manufacturing and a strong supplier ecosystem to capitalize on this opportunity. However, the Indian manufacturers have to adopt best practices to emerge as a reliable supplier base.
Different challenges faced by Indian manufacturers include:
Non standardized processes/No documented Standard Operating
Procedures (SOPs) leading to high level of rejection and rework
High level of attrition of operating team
No structured skill development program
Inefficient Supply chain planning leading to delivery issues
Spot purchases for all categories leading to cost leakages
All these issues make Indian manufacturers less competitive inspite of advantages compared many developed countries.
Indian manufacturers have to embrace competitiveness in every aspect of value stream right from Projects to Operationalization. Some of the key levers they could adopt include:
1. Early Equipment Management: This is a best practice adopted by leading companies in the Project stage where a cross functional team is incorporated in the machines in collaboration with the OEM. This method thus ensures that problems are identified in advance and helps in crashing the ramping up time to the tune of 50%.
2. Analytics and Digital led Manufacturing: Given the new generation machines come with inbuilt ability to store data and are smartly enabled, manufacturers should plan their Data Strategy right from project stage
itself in terms of the different data points that need to be collected from each machine, how they could be extracted and stored in a data lake, what can be the different analytics use cases that can help for business benefits, the different dashboards that need to be enabled across levels etc. This will help in “Precision Problem solving” and achieve higher order results in a shorter time frame.
3. Diligent root cause analysis: One of the best practices adopted by practicing organisations have seen immense value from this process. Rootcausing has also been made easy with smart machines which collect data on a real-time basis that can be used for analysis.
4. Digital Standard Operating Procedures (SOPs) and One Point Lessons (OPLs): SOPs have been practiced for quite some time in manufacturing but what is important is the improvisation loop which is often missed. One-point lessons (OPLs) help support SOPs by detailing a single point in SOP, which often is the step which is wrongly done leading to issues. OPLs are a good way to engage operating team as well to contribute their ideas for standardization of processes. Companies today use Digital SOPs and augmented reality to train operators on the floor to make usage more effective.
5. Result focussed Skill development: Attrition in the operating team is a challenge faced by manufacturers owing to opening up of new opportunities in the sector. While this is good from an employment perspective, it puts enormous pressure on the manufacturing ecosystem to maintain efficiencies and quality. So, companies should embark on a Result Focussed Skill Development (RFSD) program where the different manufacturing issues and defects happening on the floor are analysed for root causes and operating points where standardization/skill upgrade is required. A customized training program/simulation methods are developed based on those highlighted areas leveraging digital tools and the effectiveness of deployment are measured in terms of reduction in Digital simulations help in a big way in evaluation of candidates for specific situations. While right recruitment addresses part of the problem, ensuring retention is equally important by defining the right job descriptions for the incumbent along with the right reporting structure to provide clarity and freedom of work.
6. Category Management: Strategic Sourcing forms a critical aspect of enhancing competitiveness. This involves defining the right category strategies including global or local sourcing, channel optimisation in terms of manufacturer vs trader, number of suppliers per category, type of contracting (Spot/Rate contracts), Zero based costing, Price indexation, Logistics unbundling/bundling, Value Engineering based on functionality, timing and quantity of the buy etc. Category management has to be practiced on a regular basis based on demand supply changes and decisions have to be dynamic based on situations. This also involves development of Sourcing intelligence among the buying team through subscription to the right databases and trending indices globally & locally.
7. Powered Supply Chain Planning & Execution: Customer Order Fulfillment maximization and Cost to Serve optimisation are the two cornerstones of effective supply chain planning. This involves challenging the existing planning assumptions, measuring the current baseline against key metrics and redesign of every aspect of supply chain right from demand planning, production planning, procurement cognizance of these issues, adopt these levers of competitiveness to capitalize from the Energy transition opportunity.
