The large poster of a woman whose mouth is coated with chocolate is difficult to miss. The tagline says: "We create delicious moments of joy".
But before Mondelez India's Cadbury Dairy Milk can spread that joy, the chocolate, milk, sugar and nuts must all be put together, and the bars formed. Machines, not men, make what you eat. In fact, machines control nearly every process, even wrapping, packing, storing and dispatching the chocolate bars.
The plant in Andhra Pradesh's Sri City packs 6,300 chocolate bars a minute. A 'line of the future' is the centrepiece - a 250 metres long metal tunnel, which resembles a long train coach. Inside, chains, two kilometres long, run and rotate without stopping. Chocolate moulds are attached to this chain. Overhead conveyors carry liquid chocolate and depending on the recipe and size of the bars to be produced, fill the moulds automatically. Machines inside the tunnel then take the moulds through horizontal and vertical vibration, which ensures that the spread of chocolate is uniform. The chocolate is gradually cooled at different temperatures. The bars then fall onto a conveyor, and make their way out of the tunnel. It takes about 18 minutes to turn the liquid chocolate into bars.
The moulding tunnel cannot be opened while it's running, though it is monitored using software. In other words, it is a connected machine fitted with programmable logic controllers that continuously send out live data to a central processing centre. The machine quickly sends information if the moulds have too much liquid chocolate or if there is a quality rejection. A camera system in the tunnel watches out for any abnormality. This avoids wastage and helps in preventive maintenance.
Once out of the tunnel, the bars pass through a metal detector that checks for contamination while a 3D detection system with sensors checks for alignment. If everything is as required, the bars move on to a wrapping machine where they are sealed. Robots finally pick them up and place them into small boxes. The robots also make the boxes from carton sheets, glue the boxes and place them on a spiral conveyor to be transferred to the warehouse.
About 350 people work at this factory but apart from intervening when things are about to go wrong, their role appears limited. Mondelez India calls its Sri City plant an "integrated digital factory". Interchangeably, this is a smart factory.
Just like the many flavours of chocolates, there are many definitions of 'smartness', but the understanding is that smart manufacturing is about compliance with the architecture of Industry 4.0, the fourth industrial revolution. Developed in Germany, the Industry 4.0 concept is similar to what the Japanese call e-F@ctory. While Industry 4.0 has become popular over the past five years, Mitsubishi Electric had started talking about its e-F@ctory automation solutions in 2003. e-F@ctory is about integration of operational technology at the shop floor with information technology. So is Industry 4.0.
"While Industry 3.0 focussed on automation of single machines and processes, Industry 4.0 concentrates on end-to-end digitisation of all physical assets and their integration into digital ecosystems with value chain partners," PwC says in a report. "Generating, analysing and communicating data seamlessly underpins the gains promised by Industry 4.0, which networks a wide range of new technologies to create value."
Industry body the Confederation of Indian Industry (CII) recently defined smart manufacturing using similar principles. "Smart manufacturing brings together close-looped digitalised processes, people, and connected assets, leveraging a virtual platform across design, manufacturing and services leading to mass customisation, speed, quality, productivity and security," it states.
Enabling all these outcomes implies adoption of exponential technologies - the technologies that enable Industry 4.0 include smart sensors, automation devices, new robots, Internet of Things (IoT), cloud computing, location detection technologies, human-machine interfaces, augmented reality, 3D printing, artificial intelligence (AI), big data analytics, and mobile devices, among others.
Many of these technologies are at play at the Mondelez factory and in greenfield factories of many leading manufacturers in India. While no factory in India is 100 per cent Industry 4.0 complaint, many companies are taking baby steps, and choosing projects that make sense. The reason why they are interested in smart factories is not difficult to see - the rest of the world is doing it and India must keep pace to be competitive. India also has a productivity gap. Indian manufacturing's contribution to the country's GDP has remained stagnant at about 15-16 per cent for many years.
"Our labour productivity compared to world standards, is low. We are 10-15 per cent lower compared to countries such as Japan, Korea, and the US. However, we are improving. In the auto industry, people are becoming more skilled," says Sridhar V, Group Vice President and Director of Honda Motorcycle & Scooter India.
India also needs to close a quality gap that it faces with the best in class, and leapfrogging to newer technologies will enable that.
The two factors that work to India's advantage are good telecom connectivity, and that it is an information technology giant.
"The ecosystem is supportive. More than 80 per cent of the country has good coverage of 4G, 3G, etc. Second, the government has launched many initiatives like Make in India. Bodies such as CII have realised how beneficial it is. India is also a super power in terms of IT," says Andreas Wolf, Joint Managing Director, Bosch India, adding that the market for 'Connected Industry' is expected to touch $79 billion by 2020. Of this, India will be at $3 billion. "This is an assumption. India can do better if we do it right."
Smart factories, meanwhile, are giving rise to other new businesses - from start-ups selling products and solutions, to big system integrators finding a goldmine in helping factories turn digital. Start-ups, particularly, have mushroomed in industrial IoT, smart energy management and robotics.
CII has also identified an approach to help drive adoption of smart manufacturing. It wants to create an Industry 4.0 India platform, with the idea of partnering countries that have already implemented such programmes.
Learn From the Germans
The poisonous spectacled cobra, vipers, water and green snakes, hares, tortoise.. all inhabit the terrain around German auto-component maker Bosch's Bidadi plant, an hour's drive from Bengaluru. But inside the hangar in the factory, cobots, or collaborative robots, take over. These are easy-to-use, flexible robots that can work alongside humans. They can sense when a human comes near them, and stop functioning. Traditional robots do not have such sensory abilities.
The factory, which started in 2015, makes common-rail fuel injection pumps among other products. This is a good place to see Industry 4.0 in action. Bosch has been one of the earliest proponents of smart manufacturing.
The company put together a small team in 2015 and divided its strategy into three parts. In the first part, between 2015 and 2016, the India unit wanted to learn. Select employees were sent abroad to copy and paste whatever made sense. After 2016, Bosch India came up with its own solutions, developed in India, for India. The company is now in its third phase of implementation. "In 2018, we wanted to play in the Champions League of Industry 4.0 at Bosch globally," Wolf says. The Bidadi plant, he says, is among the best in class when it comes to Industry 4.0. "Between 2015 and today, we have launched more than 300 projects in the organisation internally. More than 160 have been completed successfully. We are a leading user and have also given a lot of the projects to customers," he adds.
To make this shift, the company started with training the leaders and decision makers. "Most managers and leaders don't belong to Generation Y. We have not been brought up with Facebook and Twitter. But these guys are the deciders - which is why we need to train them first," says Wolf. The leaders were trained on topics like machine learning and artificial intelligence.
One of the projects implemented successfully was the spindle monitoring system. Bosch's machining centres run high speed spindles that make up to 15,000 revolutions per minute (RPM). Vibrational sensors can now predict when the spindles are likely to fail. This helps the company schedule maintenance without disrupting the workflow. Similarly, the company implemented an Early Warning System to stop product rejections, and thereby wastage. Supervisors in legacy factories would only come to know of product rejections when it reached an alarming level. At Bidadi, Bosch implemented a software in each station; whenever failures increase, an automatic trigger is received by the supervisor.
Bidadi is a greenfield factory, and it is easier to implement smart processes there. But brownfield plants can also be retrofitted. Another German company, Siemens, has shown how to, at its factory in Kalwa, Mumbai.
The factory, which started in 1966, makes low-voltage switchgear and other industrial control products. Until two years ago, it didn't look anywhere close to being smart; and the factory couldn't meet new demand. "We make contactors (a part of switch gear), a small complex product, at this factory. We were able to do 40 variants of this contactor on the production line, but our customers were demanding more variants. (It was) not a viable proposition," says Sunil Mathur, Managing Director and CEO, Siemens India.
Siemens decided to digitise the factory as part of a global strategy and as part of a Euro 1 billion investment commitment.
A product lifecycle management software was implemented; the factory was interconnected with a portal and a manufacturing execution system that enables design of products, data management, automation, process simulation and product traceability. Machines were connected via sensors and a cloud-based IoT operating system. The retrofitting took three years and the new facility started operations in February 2018. The results, says Mathur, have been encouraging. The factory has metamorphosed into the third fully digitalised factory of Siemens globally, after Amberg (Germany) and Chengdu (China). "From making 40 product variants in three manufacturing lines, the factory now makes more than 180 customised product variants in just one line. It took an average of 21 seconds to produce one product before digitisation; now, it takes nine seconds," says Mathur. Products were checked for 22 quality parameters earlier; now it is 68. From just supplying locally, the factory now produces for the world.
The Americans Aren't Behind
Mohandas Narayana Pillai was a Quality Leader in Advanced Manufacturing at GE's precision engineering factory at Chakan, near Pune. Till the time he worked at the company (he left in September 2018), he didn't have to move around on the about 30,000 sq. ft-factory floor, to go about his job. He could monitor the quality of products in the making, raw material movement, and delivery schedules remotely.
When Business Today met him earlier in 2018, he showed us several charts and tables, finally pointing to a small red mark on his mobile phone. "This is an L3 error which occurred in yesterday's delivery to the customer. It means there was an issue in handling the product at the airport or on the way," he said. Not just Pillai, even his bosses based in other cities such as Delhi or even in the US can monitor the entire production process remotely. Like other Industry 4.0 factories, GE's Chakan plant is a connected factory. The factory's enterprise resource planning or ERP system is linked to the Manufacturing Execution System; so is every other machine. At machine level, overall equipment efficiency is digitally monitored real time to decide production schedules like availability of forks or lifts, raw material trucks, workers and machines. Much like the Bosch plant, the machines in the GE plant too are sensor connected to send warnings on possible breakdowns.
This GE factory is, however, a step ahead: it is a shared factory. Set up with an investment of $200 million in 2015, the factory is multi-modal or one that is capable of making many products for many industries. At present, it makes over 1,000 precision products weighing between 10 grams and 100 metric tonnes for four industries - power, oil and gas, transportation and aviation.
"This is GE's only multi-modal facility in the world that caters to multiple high-tech products for multiple industry segments. In the future, there will be shared factories with multi-skilled employees," Amit Kumar, the former Vice President of Supply Chain at GE India and South East Asia, had told Business Today. Kumar left GE in September 2018.
Workers wear blue jeans and black T-shirts. There are about 600 of them in the factory, with an average age of 24 years. They work silently. The workers recruited here are diploma holders and have been skilled to handle the complexity of working in a multi-modal plant. They are divided into 30 cells under three Centres of Excellence (CoE). One CoE, for instance, could be fabrication. An employee at a fabrication CoE working on a train engine part today could be fabricating for an aircraft engine component tomorrow.
There are other American companies that operate smart manufacturing units in India as well. Midmark, a global hospital furniture maker, is one. A few years ago, the company acquired Janak Healthcare, a Mumbai-based firm, with a history dating back to 1951, that sold 25,000-30,000 hospital beds a year. These included intensive care beds, emergency and recovery trolleys, two section labour tables and India's first electrically operated hospital bed. The production facility, at Umbergaon near Valsad on the Maharashtra-Gujarat border, however, wasn't modern. About 100 workers would be engaged in cutting and bending hollow steel pipes and sheets in lathes, presses and milling machines. The sheets and pipes went on conveyer belts for various coats of paints, with workers manually spraying them in small enclosed chambers.
After taking over the Indian company, Midmark decided to set up a new, fully automated plant for pre- and post-process treatments as well as painting in an adjacent plot. The manufacturing lines are now sensor-controlled and function without much human intervention. While the old pre-treatment/powder coating line employed 44 people in two shifts, the new automated line requires only 12 people in one shift to handle double the operations.
"Our daily production increased from 700 sq. metres to 2,000 sq. meters. The life of coating (of products) has increased by 50 per cent and input costs have reduced from Rs 160-180 per sq. metre to Rs 100 per sq. metre," says Sumeet Agarwal, Managing Director of Midmark India.
The Indian Show
At CII's Smart Manufacturing Summit in October 2018 in Delhi, Vijay Sethi, the Chief Information Officer (CIO) of bike maker Hero MotoCorp, took the audience through an animated presentation. He spoke of the four industrial revolutions starting with water and steam power in the 1780s to now, an era of cyber physical systems. He also spoke about why Industry 4.0 is important, and how Hero MotoCorp was progressing on this journey. The company's Global Parts Centre in Neemrana, Rajasthan, comes close to being a smart plant. (Hero MotoCorp did not entertain Business Today's request for a visit to the plant). In his presentation, Sethi reflected on what it would take to be Industry 4.0 compliant - like the Bosch experience suggests, it requires change in management and competency enhancement. Towards the end of his presentation, Sethi stopped at a slide with a picture of commandos. "CIOs," he said, "need to lead from the front". Otherwise, it's going to be "Bye bye! CIO".
With increasing digitisation and the need to stitch equipment to Cloud, the role of a CIO is on the rise in manufacturing industries. Sethi is aware of what's going on and so is his organisation, as are most large Indian manufacturers. Reliance Industries (Jamnagar complex), Asian Paints (Khandala, Mysore and Rohtak plants), L&T heavy engineering facilities at Hazira, Powai, Ranoli, Taleagaon and Coimbatore for defence, aerospace and nuclear industries, already conform to Industry 4.0 specifications. For instance, L&T uses real time data of plant and machinery from its construction sites to improve performance. Digital engineering and design, satellite-assisted surveys, safety training with virtual reality, radio-frequency identification (RFID) to track manpower and material movement, are among the steps that are part of the change taking place across L&T's verticals. The company is also setting up an Analytics Centre of Excellence.
These Indian companies, however, form only a tiny fraction of those readying for the future of production. The World Economic Forum, in collaboration with A.T. Kearney, came up with a Readiness for the Future of Production Report 2018. Countries were clubbed into four buckets depending on their readiness in what the report called drivers of production (technology, human capital, trade and investment, etc). While the first two categories, Leading and High Potential, meant 'positioned well for the future', Nascent and Legacy groups indicated 'at risk for the future'. India was clubbed as a legacy country, ranking No.44 in drivers of production. The US topped; Germany was at No.6.
Business Today's interactions with Indian manufacturers indicate three concerns. While many of them run Industry 3.0 systems, or have factories that are automated, they are going slow on Industry 4.0 because of "socialist" compulsions.
"We have promising technologies. Factories can think on their own, organise themselves, because of which you can do mass productions of customised orders with 1 per cent of the labour force that we have today," says Mukul Saxena, CTO of electrical equipment company Havells. "However, we have a system where we are socialist in our approach. Yes, we need more modern factories but we have to create employment for these many people," he adds.
State governments have started insisting that new factories employ a certain number of people locally. "When Indian companies are thinking of adoption, they have to keep pace with what's happening from the government's regulation point of view. Some of it (Industry 4.0) is required for companies to be globally competitive, but often, you can be globally competitive even without going all out," says Saxena.
The second concern for Indian manufacturers, particularly the smaller ones, is return on investment (RoI). There is no hard data yet, but Saxena seems certain that going all out on Industry 4.0 would shrink factories. "I have the capability of reducing my floor print by 40-50 per cent easily (floor print could be the length of the assembly lines). From sequential assemblies, the whole concept is about machining centres. Each machining centre can do what was historically done in four or five different steps. The centre can have four or five different machines. A lot of operations can be combined," he says.
The early adopters at Bosch, meanwhile, say there is a clear and quick RoI. "You will be surprised but it (the cost) is less than you think," says Wolf of Bosch. "Internally, we released a project with a payback period of maximum two years. It differs from project to project. We have implemented a smart manpower solution in one of our plants. In case of an emergency, you know where the people are, and if they are safe. What is the cost? It is mainly software," he says.
The cost of hardware is falling too. Cobots are cheaper than traditional robots. "The cost has come down dramatically; the reliability has increased. You don't need 10 people to maintain a robot any longer. The overall equipment efficiency is far higher than 90 per cent," Wolf adds.
In December 2018, Business Today held a roundtable discussion in collaboration with PwC on 'AAA+ Future of Manufacturing: Automated, AI-Powered and Additive'. Vijay Sharma, Senior Vice President at Jindal Stainless, was one of the speakers. His company started investing heavily in new digital programmes over the last one year. Machines talk to each other, the warehouse and other parts of the supply-chain are connected to one system, and customers are engaged through Cloud platforms. "There is predictability and our quality levels have improved a lot. That is why we are able to compete in Europe, against China as well," he says. The company's customer satisfaction surveys show more consistency in those who are satisfied versus the unsatisfied.
The last concern is around people management, especially in companies that run a large number of brownfield factories. ITC, for instance, has a diversified portfolio of businesses from personal care to food and runs more than 200 factories. Roy John, Chief Engineer and General Manager of Operations at the company, who also participated in the BT roundtable, says the factories have a wide variety in terms of technology adoption and people. It has robots and cobots, and runs programmes on data science. "In terms of people, there are the highly educated (employees), young people, old people, and people who don't know how to read and write," he says. Many may not know English - machine interfaces are mostly in English. Implementing smart practices is a challenge in such an environment.
How did ITC handle this complexity? "In the north, many people would not understand English and most displays were in English. So we made manual handwritten correspondence to each screen; got somebody to write it out in Hindi so that people could understand," John says. "My experience is that in the legacy factories with older people, if you go and tell them that this is what needs to be done, they will go and do it. The younger generation is a little bit difficult, since they have a mind of their own," he adds.
It may take some time but a methodical approach to training people, similar to what Bosch did in Bengaluru, could help in better change management. More evangelising from bodies such as CII will help too. Eventually, Indian manufacturers of all shades, will join the show.