Getting Indian Manufacturing “Make In India” ready

The greatest of world economies are generating millions from their services sector, but can’t think of growth without manufacturing. The manufacturing industry has traditionally helped nations revive their economies — Germany’s industrial boom post-World War I being the perfect example.

 

Although Indian Manufacturing is the 6th largest in the world (as per the latest World Bank reports); it only contributes 22% to the total GDP. Acknowledging these facts, Indian government is trying to promote more and more new ventures through its “Make in India” campaign to scale up the production of various industries. Though these efforts predict a promising future, however, growing volumes and changing times have increased complexities in this sector.

 

GDP India

 

The Struggle Wave

 

Indian manufacturing industry evolved and suffered majorly in the pre liberalization era. Many small and medium sized industries like textile mills and handicraft struggled hard for survival. The PSU’s made to support the socialist side of the Indian economy were fast turning into liabilities. However, post the massive deregulation of 1991, India witnessed unprecedented growth in infrastructure, attracting of foreign direct investments and mushrooming of manufacturing plants. Liberalization opened India’s economy to world, which now faced competition globally including the threat of cheaper Chinese products. This subsequently led to more efficient manufacturing practices that resulted in saving costs, revamped management, reliance on cheap labour and latest technology. However, this reduced employment in the labor intensive industry. Even after these changes, many industries died a natural death and PSUs turned ‘weaker units’ were either dissolved or privatized.

Indian Unemployment Rate

Indian Unemployment Rate

 

Technology, Manufacturing and the New Age

 

Beginning of the 21 st century brought a technological revolution globally. Companies like Google, Microsoft, Facebook, Motorola, etc. started ruling the world. Also, this was the age when the e- commerce boom commenced. This helped the service sector to ramp up its contribution to its current level of 57% in Indian GDP and yet only employ 27% of the workforce. Manufacturing sector shifted from a labour intensive industry to an automated one. Also, the technological advancement led to a shift in type of workers (like from earlier unskilled labourers to the new highly skilled ones like designers, engineers, data scientists, etc.). However, these events led to increasing unemployment levels to 9.5% + in 2004 and 2010.

 

One of the major concerns is that the Indian manufacturing industry now has deficiency of the skilled workforce. Skilled employees are necessary to keep up with fast changing technology of modern times.

 

So, the question that now arises is — “Is the technological advancement in manufacturing helping it create larger impact to the economy by scaling up the businesses or failing them due to supply demand gap of skilled employees?”

 

Problems Vs Solutions

 

This industry certainly needs a major overhaul — industries like Automobiles, pharma, chemicals need a global to local (import raw materials to distribution) change and are highly reliant on transportation and distribution in the last leg and sourcing while Printing/Food/Beverages also need a larger regional level impact. Moreover, logistics which is a major cost centre for manufacturing, in India is still a chaotic sector. There is a clear lack of integrated solutions for most manufacturing companies who have outsourced their warehousing and supply management services. Outsourcing no only adds to cost but also leads to confusion rather than consolidation. The slow transition in shift from labor intensive to automation leads to poorer capacity utilization, inefficient fuel and partial resource optimization. Hence, the overall potential of the industry in corroded.

 

These major impediments were motivation for LogiNext to develop a suite of products that help eliminate at least the logistics problems and accentuate day-to- day efficiency of these manufacturing firms. LogiNext apart from having a tie-up with Google Enterprise, has partnered with Zippr, Traffline, and other enterprises that provide real time data about traffic conditions, weather conditions and building-level accuracy at each latitude and longitude. These data points are gathered on a real-time basis, giving complete visibility over high value cargo to the manufacturing company. The team of 100+ technical experts have designed a Delivery Management system, which helps in resource and capacity planning. Also, the plethora of reports generated on the basis of big data, give an insight for everything, and provides tools that allow increased efficiencies through activities like better resource optimization and budget forecasting which in turn leads to saving millions of dollars.

 

India’s manufacturing sector will be a $1 trillion industry and constitute about 25% of country’s GDP by 2025. It important that this sector is equipped with the latest technological advances and optimization tools to ensure the continued progress. To avail a free consultation on how our solutions can add your logistics process drop us an email at contact@loginextsolutions.com
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