Whenever we think about the globalisation of business, a few basic things come in our mind as far as the manufacturing sector is concerned:
- Concept of "production in high volume" to meet the business requirements of total profit by the continuous thinning of profit from per unit.
- Continuous effort to reduce the cost of production.
- Ensure the reliability of your system from receiving the order from the customer and till your product reach in customers hand as per his overall requirement.
- Your capability to adjust yourself with the changing expectation of the customer in quickest possible time.
- If we can upgrade our system as per the above points, there will be no reason, why cant we beat competition in the international market.
We may not have same advantage as our competitors in other countries have like low labour cost, liberal labour laws, huge subsidies, low interest rate and cheaper power cost, a hassle-free environment and other government. incentives. But in India, all things are not so bad. We have a lot of talented courageous entrepreneurs, engineers, scientist and huge number of highly skilled and trained manpower who is capable of accepting this challenge. But first we need the firm determination to achieve it. Today, the way we doing the things may have been right 15 to 20 years ago when everything was under the tight control of the government regulation. At that time there was only two car manufacturers and one scooter manufacturer. It was a sellers market. Now the situation has turned around. Today, all international brands are available in all type of products at cut throat competition. The Indian companies, who were enjoying all type of protection and were doing monopoly business find themselves in soup. Now there are only two alternatives, either upgrade themselves and face the international competition or start winding up.
In this transition phase some companies are doing very well. Even any foreign brands are not able to make any significant dent on their market. But there are so many others, who are not able to face the competition, and are disappearing from the market.
How should manufacturers prepare for this?
They have to do a lot of introspection and at the same time they have to model themselves on similar type of globally successful enterprises. In more organised. They have already crushed our machine tool and other capital equipment sector with cheaper and better quality products with unmatched delivery lead times. For example, consider die casting machines; where an Indian company takes more than 6 to 8 months to deliver it, while the same is available from Taiwan within 3 months at your doorsteps. The same is true for all types of machine tool products and special purpose machines. Close to 90% of the worlds computer hardware is made in Taiwan. Over time costs come down manufacturing sector, Taiwan may be an ideal model for us. Their manufacturing sector is and features increase. And their salary structure is approaching the US levels. How are they able to do this? One had visited Taiwan and tried to find out the reason behind it. The main reason is the well organised and disciplined support of small and medium type of industries behind the big industries. They are manufacturing the parts/subassembles with high reliability of quality, quantity and the delivery times to main industries. The buyer industry focuses on assembly only. This is also true for the machine tool industry.
In the case of tailor made machines / special purpose machine, they work on "modular" concept. As needed, they have standardised the various units like drilling, tapping, milling, boring heads, slides, indexing units, PLC, electrical items. Most of these units are readily available with manufacturers. As soon as they finalise the design, all these standardised units are available for with a phone call. In India, we dont have this strong base. Most of the big companies are manufacturing most of the parts in house. Due to larger overheads, the cost of the manufacturing is more. Because of the limited demand they work in small batch units. They use general purpose equipment for manufacturing which ultimately proves more expensive and low productive than the dedicated high volume manufacturing system. All this pushes the cost up and kills their viability in competitive market. Moreover, most of the Indian machine builders have designs that make it very difficult to make even smallest modification. Alternatively, if they design even a dedicated system on modular concept it would be very easy to accommodate any changes in product as per the market demand. Also, if the product becomes obsolete the modular system will allow them dismantle the machine and re-build it with minimum costs. The modular concept also allows quick response time to changing customer needs; greater reliability (by the use of proven standard module); lower maintenance cost and better spare part planning. All this leads to low cost and high productivity. Next most important step is the adaptation of automation. It is not necessary to go for very hi-fi automation in the first stage itself. In the first stage we can start it with the introduction of as much as low cost automation necessary to reduce the human factor from the process. This leads to lower rejection of product, reduced labour force, consistent quality, and higher productivity.
The different phases of automation suggested are:
Phase 1: The application of pneumatic, hydro-pneumatic and hydraulic system with independent control for clamping, de-clamping and locating purpose.
Phase 2: Design independent controls that may be synchronised with rest of machine. You may also add some other controls for self-diagnosis. In a machining cycle, the operator will have enough time to prepare the material for the next cycle.
Phase 3: Reduce down other labour intensive / non value-added activity of operation.
Phase 4: Identify the operations which may be clubbed together by making some dedicated systems (SPM).
In summary, if your target is to "to reduce the cost of the production", then the following strategy should be followed :
- Remove/reduce the all non value added activity in the process.
- Reduce the role of human factor, which is responsible for the quality and quantity of the product.
- Reduce the overall manufacturing time.
It is a continuous journey for continuous cost reduction; improvement in quality with maintaining the reliability of the system and ensuring the ability to response the changing customer needs.
Automation plays a vital role in making industries viable in global market.Yes, it will need investment. But this investment always pays in long run. The need of automation is every where. Even today, many pharmaceutical companies are still relying on manual packing of syringes and needles which is so unhygienic. Similarly, in food industries, there is great scope for automation for hygiene and cost. In manufacturing sector, simple low cost automation can make the process safe and cost-effective.
Start evaluating the need of automation in your plant? Assess the following :
- Cost of manufacturing - difference between your cost of manufacturing and that of your competitor
- Cost of quality - amount of money lost in manufacturing in rejected items. Workers safety and health hazard.
- Reliability of the system
This assessment will make need of automation clear. Once we know the need of automation, it is very easy to pin point the process that needs automation. Instead of rushing outside, use the in house available talent, and the knowledge available around to develop the simple devices may be the better alternative. It will give you more confidence. Everyone of you can feel the benefit of this. Systematic analysis of the process and problems will help you find out the appropriate solutions. Take full advantage of outside consultation for this.
Each success will boost you improve the process further and the day will come when you will be much ahead of your global competitor.