Indian manufacturing industry: Embracing digitalization is the need of the hour

Industry digitization is expected to develop new business models and present significant potential for small and medium-sized businesses. In order to meet customer demand, meet corporate objectives, and remain competitive worldwide, it is now imperative for every manufacturing organisation to go through a radical change using digitalization.

Every manufacturing company in India has tried-and-tested procedures, theories regarding product development, and success experiences. However, as we explore the global market’s potential, these best practises are being called into question, and there is a need to use digitization in order to achieve the desired outcomes in terms of the following objectives:

Introduction of New Products: Due to the ever-changing needs of customers, manufacturers must introduce products more quickly, despite the increasing complexity of their products. When it comes to traditional competition, the larger and more powerful adversary has always prevailed over the smaller and more agile one.

Enhance flexibility: Customers wish personalised products but don’t want to pay more than they would for mass-produced items. As a consequence, manufacturing must be more versatile than ever before, resulting in customised mass production.

Better quality: Today, customers reward high-quality items and penalise low-quality ones by endorsing them online. Companies must have closed-loop quality systems and traceability in order to assure excellent product quality and meet regulatory obligations.

Improve efficiency: In today’s market, a sustainable and environmentally friendly product is not the only factor that determines a company’s competitive advantage; rather, energy efficiency in the manufacturing and production process also plays a significant role.

In brief, leveraging the potential of digital transformation allows a company to gain a competitive edge by doing things better, quicker, and cheaper than their competitors. Even while manufacturers are aware of these advantages, they have difficulties in implementing them in their organisations.

Embarking the digital journey

We will never be able to digitalize without creation Smart production facilities (factory), As a result, we must focus on achieving these goals in accordance with the needs of our customers, the size of our company, and the industry in which we operate.

Future factories, known as “smart factories,” will transition from automation to autonomy, enhancing real-time connectivity between machines, physical systems, and people (IoT). The shop floor connectivity, sophisticated robotics, adaptable automation, virtual and augmented reality systems, and effective energy management are smart factory’s greatest strengths. The automotive industry is responsible for setting global standards for the general manufacturing sector. The automotive ecosystem has grown significantly in India over the past two decades as well.

Only a portion of the value chain has been digitalized at this time. A truly smart factory necessitates that data enter the value chain at one point and then travel through it as needed. In the case of a manufacturing defect, for example, the product specification will enter the value chain at a specific point in order to determine where the defect is located and its nature. When a smart factory is used instead of a manual process in the value chain, it can automatically identify the problem.

The importance of realising a return on investment (RoI), along with the willingness of employees at both the top and bottom levels of an organisation, are the primary factors that will determine the success of the implementation of digitalization.

Graphs depicting the relationship between demand and supply suggest that if a significant amount of automation or digitalization is not implemented, it may not be possible to fulfil the requirements of customers. This will be the case in many different industries, including those requiring precision, speed, and flexibility, such as the automotive, defence, marine, and high-end manufacturing industries. The small and medium-sized businesses (SMEs) of India need to get ready for this tremendous opportunity. However, in order to adopt digitalization, small and medium-sized businesses require a significant amount of new capital. One of the most significant obstacles that small and medium-sized businesses in India are confronting at the moment is the lack of available financing. Despite the fact that state-owned SME growth funds, lenders, and companies in the mainstream banking sector are offering expansion and working capital loans, these loans are not even close to being adequate and are frequently out of reach for most people.

Global MNCs are innovating at a faster rate than their Indian counterparts, and Indian SMEs are constantly playing catch-up to stay competitive. When small and medium-sized enterprises (SMEs) in India begin partnering with internet of things (IoT) platforms that enable higher levels of efficiency, this will be a significant step forward for smart manufacturing. Because of this, small and medium-sized businesses (SMEs) will need to collaborate with larger companies that provide robust, well-proven, and cutting-edge digitalization solutions during the next decade. The digitalization of all value chains, strategic partnerships, innovative funding, and turnkey solutions that can make Indian factories smarter, more productive, and more efficient are urgently needed right now. Fast!

Leveraging digitalisation

Because of pressure from global original equipment manufacturers (OEMs), Indian businesses have only recently begun investing in digital technologies. The OEMs want Indian businesses to have digitalization systems so that they can keep track of what is happening at the supplier and customer ends of the supply chain.

Whether it be in design or manufacturing, the world is moving toward digitalization at this very moment. The assistance provided by digitalization can be utilised to leverage investments in digital technologies for the purpose of improving the effectiveness of already-established manufacturing processes and also for communicating clearly with customers regarding business orders.

It is possible, with the assistance of digital technologies, to transform a largely isolated discrete supply chain into a fully integrated ecosystem that is completely transparent. This can be done by bringing down the walls that separate the two. One can decide whether to implement complete digitalization at every point of operation or only for some pockets of operation based on the size of the industry and the scale of the operation. This decision can be made based on the scale of the operation. It is preferable to have complete digitalization for an industry that operates on a large scale. It is an option worth considering for businesses operating on a medium scale, particularly for projects involving inventory control and the simplification of production procedures, as well as for sales and after-sales service. Integrating the supply chain is something that cannot be generalised across all industries because it is contingent on the size of the industry.


The inference that chasing cheap labour rates is no longer a competitive strategy is a driving factor propelling the global adoption of more manufacturing and process automation. Maintaining competitiveness and flexibility requires embracing cutting-edge technology, with automation being a critical component for this transition’s success.

Digitization is becoming a reality thanks to substantial technological improvements enabled by the Internet of Things, such as open software platforms, open communications, open data models, and powerful embedded processors. The term cyber-physical systems (CPS) is used in digitization to describe the interaction of physical and computational systems, including embedded intelligence at all levels, such as machines, sensors, actuators, production parts, subassemblies, and products being manufactured. CPS are made up of physical items like mechanisms that are controlled or monitored by computer-based algorithms. Mechatronic drive systems, which use processors and communications built in motor drives to conduct coordinated activities in a packaging machine without physical gearing, are a recent example of CPS application. This saves money while also giving more flexibility and reliability.


Digitalization can aid in the capture of a wide range of data that can be used to improve performance and productivity through the use of analytics. It’s possible to use analytics to improve asset utilisation in a variety of ways—including real-time predictive maintenance, which helps manufacturing companies avoid machine failures on the factory floor and thus reduce downtime. Another application is the optimization of manufacturing operations to increase productivity and energy efficiency.

We must move forward and get ready for the digitalization of everything. It is unavoidable, seeing as there is no way to get around it. The issue of cost presents the greatest obstacle for a nation like India. Therefore, we still have a very long way to go. This is not merely a transition; rather, it is a revolution. When everything becomes global, our primary rival will also be progressing at the same rate.  Companies are required to identify the technologies that will assist them in achieving their business goals and the desired return on investment (RoI), and then invest in those technologies. 

The article has been written by Rajiev Luthra, Director at Luthra Hydro Pneumatic Industries

Leave a Reply

Your email address will not be published. Required fields are marked *