Covid 19 has brought in a lot of learning to the global community of manufacturers. 1. Never put all the eggs in one basket. Meaning: it is too dangerous to have the entire manufacturing in a single geopolitical boundary. 2. Industry 4.0 needs to be pushed strongly. 3. Cheaper place does not mean cheaper yield by the time it reaches to the consumers.
There is a consistent endeavor from the large 3rd party manufacturing countries including US, Japan and EU over the past one month. These countries are incentivizing their manufacturers to relocate the manufacturing base out of the China – the manufacturing hot spot for the last decade. These countries are also earmarking billions of dollars of budget to assist them in the relocation.
Although this thought was coming to the people for a long time but due to heavily tilted advantage of labor regulation, better skill and better infrastructure, China was always remained a favorite. But over the period Chinese labor cost has been higher compared to other countries – specially India. Secondly, China has better and bigger skilled labor force than any other country. Third: being a communist country, labor management is much better in China.
However, this pandemic – Covid 19 have taught the entire manufacturing bosses around the world a big lesson. That despite the advantages, their investment is at risk. There is no taker for their products now. They are incurring huge loss as the days pass by.
On the other hand, Covid 19 has turned the tide in favor of India as it has become a favorite spot for the manufacturing alternative, although there are many other countries that people are counting. But the advantage of India is that it has a decent English-speaking skilled labor force. Its strong software & services background is a bonus. India has a large labor force. Last but not the least India is a democratic country, where press and media is free to criticize the bad acts of the government.
So there a strong opportunity for India is to adopt mass scale Industry 4.0. technology and attract the manufacturers. It is not that easy as it sounds. But the advantage and opportunity is that its labor force has migrated to their own states, which means the chances of getting back to the cities will take some time and no one know if they would get back or not. The hardship they have gone through for last one month will remain as an indelible mark in their psyche. These labor force had disowned their traditional agriculture- based activities of the rural India and adopted urban industrial opportunity but this scar in their memory will certainly not permit them to disown their own places anymore. If there would be any migration, it would be of skilled forces.
This makes the chances of Industry 4.0 in India much stronger. The cyber-physical systems, or the Internet of Things (IOT) combined with Operation Technology (OT) in the existing manufacturing and future manufacturing facilities can make Industry 4.0 possible and the smart factory a reality. The floor can be managed by a combination of robotics or automation and skilled labor force. The entire process to manufacturing to even last mile interface – until the consumer would be data driven including the demand generation. What we need to look at is a robust cyber security perimeter around the system so that it becomes extremely difficult for the hackers to penetrate. We already are about to implement 5G network, which solves the bandwidth issues.
As the global situation evolving, many of India’s skilled IT manpower are waiting to come back from global destinations, who can be asserts for the mass manufacturing vision. Otherwise also, India would attract highly skilled IT workforce living in various diasporas with its changed avatar.
Apart from this broadline technical assessments, there is an immediate and fast track requirement of government impetus. The government should immediately start looking at long term manufacturing goals. It can work around better land and electricity pricing and tariffs. Also look at tax holidays for the foreign and domestic manufacturing. It should start incentivizing domestic investment also. Government should start working with banks and other lending agencies to ease lending terms for the manufacturing purpose. The existing Indian industrial estates or corridors can be given a makeover. There are many industries which are sick due to lack of government support can come to the forefront. Mind it: manufacturing is the first line of organizations to absorb our millions of labor force.
The prediction of various European and American organizations about India becoming a superpower in manufacturing is already there. People in various forums were talking about this but the situation was not so conducive as it needed trust to distrust some theories. Now the time has come that India rises to the occasion and adopts Industry 4.0 technologies and obliges the global community. The world needs the country. Its own citizens need it to happen too.