MANUFACTURING 2023: SHAPING FACTORIES OF THE FUTURE

By OEM Update Editorial January 11, 2023 2:58 pm

Industry experts from machine tools and industrial manufacturing shared their insights into the future of manufacturing factories, indigenous technology adoption, digitalisation, and manufacturing growth in 2023.

The Indian machine tool industry, spurred by technical advancement, is expanding due to ongoing innovation. It concentrates more on the human-machine interface to contain costs for product manufacturing. Digital manufacturing is the cutting-edge trend in manufacturing, emphasising additive manufacturing. The future of manufacturing revolves around automation and digitalisation of workflows, sensors and cobots, and Industry 4.0 manufacturing is transiting to industry 5.0.

The Indian economy is poised to grow around 6 to 6.5 percent in 2023, so manufacturing should grow by at least 7.5 to 8 percent to achieve this growth. According to the S&P Global India Manufacturing report, PMI increased to a 3-month high of 55.7 in November 2022, exceeding market estimates of 55.0 and staying above its long-run average of 53.7. A more robust upturn in factory orders helped increase the PMI in November. As per the report, demand, resilience and marketing efforts boosted overall sales. Purchasing Managers’ Index (PMI), as we all know – is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

The future of manufacturing will be shaped by machine tools and manufacturing technology  that involve parts and components, accessories and systems, metrology and CAD/CAM cutting tools, tooling systems, and new-age metal cutting technologies. That also implies paying attention to technical education, reskilling the workforce, and creating engineers for tomorrow.

Manufacturing outlook in 2023

Manufacturing is based on tenets of technology adaptation. We all know that in 2019–20 economy took a downturn for various reasons. It is now reviving and progressing into the future. The manufacturing outlook in 2023 seems optimistic. Mr. T. K. Ramesh, Managing Director, Micromatic Machine Tools, Ace Micromatic Group, says, “The country has achieved higher peaks, starting from 2022. Therefore, we anticipate nominal growth to remain equivalent to last year or even better in 2023. Manufacturing is rearing its head with the integration of the latest technologies. However, an analysis of what is happening worldwide still in the grip of the recessionary economic trend may yield the results by the second half of the following year.”

Advantages of industry 4.0 and tech trends

The manufacturing industry is experiencing a significant surge in demand. Mr. Avil Kumar H.N., Head of Software Services – Industrial Quality Solutions, Carl Zeiss India (Bangalore), remarks,
“People are experiencing the needs for cloud solutions and software being addressed. The foundation of the smart factory is taking its shape. The industry is pushing the implementation of AI.” To cite an example, businesses prefer visual inspection systems over systems that can really be used to monitor the quality of production lines. Elaborating further, Mr. Saju S. R., Head of Product & Process Engineering Smart Power Division, Electrification Business, ABB India, talks from a different perspective. He says, “To control the processes, attempts are being made to gather information and provide feedback to the system. So, intensive efforts are on to experiment with feedback mechanisms.”

Manufacturing is shaping with IoT and advanced possibilities like artificial intelligence, augmented reality, and virtual reality to derive full benefit from industry 4.0, “There is currently a 3D simulation software programme accessible for increasing the production capacity continually. Some settings in the simulation programme allow one to feel real-world standard development. These shorten the turnaround time and raise the standard of the final product.”

Future manufacturing growth

A voluminous growth is happening in the start-up industries with the promotion of the government of India schemes like Atmanirbhar Bharat and Make in India campaigns. Mr. Ashwin Deshpande, Country Head- India, Intech Additive Solutions, states, “The government is making an effort to encourage and develop the indigenous manufacturing in the defence and space industries with support from PLI schemes too, to a certain extent. Many existing businesses that produce medical devices, equipment, and supplies are bracing up indigenous technology. They strive for business aligning with the make-in-India concept and going global. There is enough optimism about the spread and use of technologies in the field of additive manufacturing. In the next few years, companies will expand. There is enormous room for growth. So, we are hopeful.” Budgetary support from the government is expected to tread the path of atmanirbharta in manufacturing.

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The budget is all about fiscal pronouncements that need to be made, at least from a business standpoint. Multiple allocations have been pronounced, including PIL support for manufacturing.

According to Mr. Ramesh, it takes time for the green shoots to start, as it is about implementation. GST was a remarkable thing that I came across. It’s been about four years, and its effects are visible a year from now, which has a multiplier effect. The corporation taxes are at their highest level. It will be a constructive step if some rationalisation also occurs in the import-export policy. There is an impending need to reduce input material tariff structures and provide the necessary infrastructure as promised to support manufacturing. Such budgetary impediments need more government focus to boost manufacturing investment and economic growth. Most organizations are willing to make it in India and follow the industry 4.0 concept.

Technology demands reskilling workers, which may range from user to management level. Emphasizing the importance of skill development, Mr. Avil Kumar expects, “After the infrastructure is in place, attention should be on the skill development of those who use it. Additionally, to provide impetus to skill development, the budget must emphasis how to enhance workers’ skills. It may be done through academic curricula, research and skill development council actionable areas may be expanded. The needed investment can be included through the financial budget.”

Mr. Ashwin opines that government funding should be provided to academic institutions. That will enable them to invest in new technologies like 3D printing technology. It will help faculty members to develop their skills and work more closely with businesses developing and creating practical industry-related programmes. Armed with the new skills, they may conduct more research for creating new text material. Therefore, a larger budget should be set aside for the academic community to utilize newer technologies to empower industries.

Furthermore, Mr. Ramesh opines, “We already have sound policies, and the law should be amended when necessary. The focus has to improve the existing implementation. We must have a better situation. Nowadays, many schemes are afloat. Whether it is the government or an industry like ours, the question is how much we can derive and how much we can deliver. Resultantly, we must roll up our sleeves and deliver.”

A good amount of research was carried out towards the PLI scheme. The expansion of the PLI scheme for the electronic and semiconductor industries will be a game changer in 2023 and 2024. Sounding very optimistic, Mr. Rajesh Nath, Managing Director, VDMA India, said, “Overall, the Production Linked Incentive scheme will boost the country’s manufacturing activities, attracting FDI inflow, generating jobs and leading to increased exports. The long-term vision is to gradually develop India into a global manufacturing hub and boost employment opportunities in the country.”

Indeed, manufacturing is advancing with schemes in force and efforts towards enhancing skill development. According to key findings by S&P Global India Manufacturing PMI, output and sales rose at the quickest rates in three months, supporting job creation and input purchasing. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, commented, “India’s manufacturing sector continued to perform well in November, despite heightened recession fears elsewhere and a deteriorating outlook for the global economy. It was business as usual for goods producers, who lifted production volumes to the greatest extent in three months amid impressive evidence of demand resilience. New orders and exports expanded markedly in the latest month.”

The respondents are confident in the buoyancy of demand for their goods and their ability to lift production further in 2023. “Companies were also aided by a substantial cooling of cost pressures in November, which prompted them to purchase more inputs and add to their inventories. The overall rate of input cost inflation slipped to the joint-lowest in 28 months. Buyers of Indian manufactured goods likewise gained from this retreat in cost inflation, as 92 percent of surveyed firms left their selling prices unchanged from October.”

The road ahead

The world is behind Industry 5.0 now. Predominantly, optimism is on the horizon concerning the future so far as smart manufacturing and better control of machines are involved. Suppliers to the Indian manufacturing sector were able to deliver inputs promptly, signaled by an improvement in vendor performance. Finally, firms were confident that demand would remain strong in the coming year. As a result, they foresee growth in production volumes. The global slowdown will impact domestic demand-led economies such as India, Indonesia, and the Philippines less. India’s output will expand by 7 per cent in the financial year 2022-2023 (ending in March 2023) and 6 percent in the next financial year, as per S&P Global agency estimates. Demand strength boosted manufacturing growth in India, with companies noting the quickest increases in new orders and production for three months. A strong notion is prevalent that manufacturing can contribute 1 trillion USD when India becomes a 5 trillion USD economy. Moreover, firms are strongly convinced towards growth prospects, with optimism driving another round of job creation and technological initiatives. Finally, confidence prevails in both the buoyancy of demand for goods and their ability to further lift production in 2023.