D Shanmugasundaram, Managing Director, S&T Engineers (P) Ltd

COVID-19 has impacted the way businesses function. Do you think automation in manufacturing will help companies achieve their goals with this pandemic around?
The manufacturing industry in India has always been dependent on manpower and it continues to be so. So, when a pandemic like COVID-19 emerged, it disrupted our production process. We were unable to operate in an environment with limited access to manpower due to the lockdown. Our production lines struggled to be capable of reconfiguring to build the things we needed most in the past few months. But disruptions are inevitable. To overcome future disruptions and to build manufacturing efficiency, we need to design systems that are robust, scalable and flexible. In times like this, automation could definitely help. It can perform the manufacturing process with greater uniformity while conforming to quality specifications. Automating manufacturing operations can increase the production rate, which means higher output per hour of labour input.

Yet, why are some manufacturers reluctant to adopt automation in their manufacturing process?
For manufacturers, it’s always about how they can achieve the best output with the lowest possible cost. They have been understandably reluctant to turn to automation for several reasons. To make manufacturing automation work, a large capital budget is needed. Alongside, there is also a fear that automation will take away jobs.

What is the most important lesson you have learned from the COVID-19 outbreak?
COVID-19 has fundamentally changed the culture of the workplace. It has helped us strengthen our digital capabilities and stay engaged with customers. We have also learned to create a more resilient workforce with additional focus on health and well-being. The pandemic has redefined leadership in the organisation. Now, much more importance is given to safety and hygiene implications for not only employees, but also customers, suppliers, business partners and society. Clarity of thought, decision-making, and effective communication should play a major role to shine through this crisis. Amid difficult situations, we have also learnt to become more patient. Although we struggled with the uncertainty around, the lockdown period seems pacifying in terms of quality time spent with family.

In this uncertain time, what measures have you adopted to keep your team productive?
Our major focus is to deal with the present situation and make sure we function efficiently. It’s more about how we deploy our workforce and distribute tasks that can leverage on their strengths. Concurrently, we strategise on ways to help the company emerge stronger. We believe that if a company has to succeed, it must take care of its employees. So, we manage our employees’ concerns regarding the risk of virus infections at the workplace, interacting with customers and even travelling for business. We provide back-end staff with remote and flexible work options. There are constraints on providing these options for personnel who work on field. But for them, we try to emphasise on the necessary precautions they need to adhere to in order to stay safe. We are doing our best to provide a cleaner and safer work environment for our employees.

What changes are you planning to make in your production and business operations?
We have synchronised our activities, including manufacturing, logistics, supply chain, and labour planning while re-positioning our current inventory. We will be able to stabilise and beat the crisis by understanding opportunities in the market with economic stimulus plans announced by the Centre. We are focusing aggressively on liquidity and working capital, optimising production, and frequently reviewing inventory levels. Meanwhile, we have been emphasising on updating our business plans to reflect the changes in the marketplace, supply chains, and customer as well as trade relationships.

What short and long-term opportunities do you see in this crisis situation?
As a short-term opportunity, most companies have got tooling orders for the production of COVID-19 protection products. As China is facing a global backlash following the pandemic, European companies are likely to move their production units to India. In fact, Von Wellx, a German footwear company, has plans to set up its unit near Agra.

Owing to the availability of low-wage skilled labour and new foreign direct investment rules, economists are hopeful of India attracting many more such investments. Although we may not see its immediate effect make it in the short term, the shift will help India in the long-run and make it an alternative manufacturing hub.

In his speech on May 12, Honorable Prime Minister Narendra Modi announced a self-reliant mission to accelerate domestic production. While some say, this will reverse globalisation, there is a possibility that it will boost in-house manufacturing.

What will manufacturing’s new normal be after COVID-19?
The COVID-19 pandemic hit manufacturers in an unexpected way. Demand, supply, and workforce availability are affected globally at the same time. Social distancing and employee safety measures will be the new normal for manufacturers. While skilled workers are able to shift to remote work as the default operating mode, most factories will need to be designed to manage operations remotely. They will need the digital tools and infrastructure to support such activities.

The Indian government is likely to use domestic manufacturing as part of their plan to build up strategic resilience to the current crisis. Digital tools and processes will uptrend across industries to manage supply chain risks. Automated manufacturing is expected to create new opportunities for digital-savvy workers.

The post COVID-19 impact would witness a lot of in-house manufacturing taking place. However, a well-charted framework can mitigate disputes in line with the new normal.

What policy changes or support do MSMEs need in such a challenging time in order to revive?
Often described as the backbone of the Indian economy, MSMEs have been severely affected by the pandemic. In the lead up to the lockdown, manufacturing already started to slow down, disrupting the availability of qualified and trained manpower. A recent survey by All India Manufacturers Organisation found that 1 out of 3 MSMEs considers itself to be beyond recovery, whereas 32 percent expect to recover in at least six months.

Swift action has been taken under Atmanirbhar Bharat to revise MSME definitions with effect from July 1, 2020. The new definition abandons the difference between manufacturing and service MSMEs, and classifies enterprises on the basis of combination of invested capital and annual turn-over. This will help MSMEs grow by lifting the low capital thresholds that was hampering their ability to expand.

The Finance Minister’s Atmanirbhar Bharat package wagers on credit support for MSMEs at large. Although the emergency credit support can serve those MSMEs that have a good credit history and established banking relations, there are also concerns about MSMEs’ ability to repay in years to follow owing to volatile market conditions.

However, the government should support MSMEs until they revive by being liberal in granting loans and extending the payback period. Much more needs to be done in the form of immediate measures to revive a sector that employs millions of people.

By Nishant Kashyap

Courtesy: The interview was first published in TAGMA Times

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