BusinessToday speaks to Srirangam Srirangarajan, Altair’s Managing Director for Southeast Asia, Australia and New Zealand on the importance of smart manufacturing and how it could benefit businesses in the current pandemic
“Smart manufacturing, in simple terms, is about connecting the machines on the shop floor with other possible systems with a goal to improve productivity and reduce costs,” says Srirangam Srirangarajan, Altair’s Managing Director for Southeast Asia, Australia and New Zealand.
As a result, in current times especially during the present Coronavirus outbreak, as disposable income in the society typically shrinks, this will leave consumers to look for cost-competitive options at times even against their brand-loyalty. “Naturally, the service providers and manufacturers will have to look for innovative ways to cut costs to protect their turf and in cases even to survive. And for businesses, there can’t be anything more profound than keeping it alive,” he adds.
Srirangarajan also highlights that smart manufacturing is an integral part of Industry 4.0, where it offers data driven cost optimisation in multiple ways, from simple inventory optimisation, shop floor equipment efficiency improvement through predictive maintenance to reduce loss of productivity due to breakdowns, supply chain optimisation as well as improving business agility.
“It’s about collating all the data available in a factory in multiple formats, in certain cases combining the data with a few other technologies like engineering simulations, where required, and analysing different aspects of it with a clear aim to cut costs,” Srirangarajan tells BusinessToday.
He further shares that the process also helps redistribute human resources in areas requiring value-added involvement while most of the routine repetitive tasks are taken up by automation and technology. While smart manufacturing had prior start even before Covid-19, the ongoing circumstances has made it a central topic for discussion.
According to the Covid-19 Business Impact Survey 2020 by Ernst & Young (EY), businesses have accelerated the adoption of technology in response to the pandemic with 37 percent of SMEs and 32 percent of the large and listed companies surveyed mentioned the steps they have taken to expand or upgrade their technology capabilities.
‘Data-driven’ is expected to become the keyword going forward, with digital transformation spanning design, engineering, production, distribution, marketing and sales, procurement, and finance. The role of human-power will shift from repetitive tasks to decision making, designing, defining, and enabling.
The Altair managing director also believes that organisations will change based on the needs or some extraneous compulsions. In the case of local manufacturers, both those factors are at play at this point in time. He opines that for manufacturers who want to be part of the global supply chain and increasingly play a bigger role in the global market, it is imperative to adopt technology and digitalization that are aligned to international standards since the business environment demands it.
Srirangarajan shares that the reluctance to digitalisation springs from multiple factors and these include the process being viewed as a capital-intensive exercise and elitist and with some decision makers being in business for long, they might come to believe that decisions are made by gut feeling and not data.
“There’s also the inability to understand the trade-off between legacy investments and current business circumstances as well as the lack of understanding about Return-on-Investment (ROI),” he highlights.
Absence of in-house expertise as well as security concerns, Srirangarajan stresses, cannot be an afterthought. While the security concerns can be handled technically, the lack of requisite skills within an enterprise does dissuade and further delay adoption.
“Starting right is half the job done. Identification of a relevant and high impact business use case is most important. Manufacturing organisations spend too much time and effort trying small initiatives across multiple business areas with no definite value coming forth and technology fatigue sets in that dissuades them pursuing all such initiatives further.
“Each organization has unique challenges. My advice to SMEs would be to not get bogged down by the jargon; start small, define the problem, and more importantly choose the right technology partner. The bottleneck could be delayed input from supply chain, inventory management, unscheduled downtime, monthly reconciliation and warranty. Each of the above would require different tools to be deployed,” he tells BusinessToday.
With the government’s continuous efforts towards digital transformation, and multiple programs to drive the adoption across the industry, Srirangarajan says Malaysia is well poised to embrace it. There are certain perceived challenges as mentioned earlier which results in a bit of reluctance.
“However, the winds of innovation are so strong globally that it will become imperative to adapt or get swept away. Covid-19 maybe another trigger point for the local enterprises to rethink their digitalization strategy and move timelines forward. The future of Smart Manufacturing in Malaysia is now,” he concludes.