Smart Manufacturing for MSMEs: How Supporting Pragmatic Growth for the Economy?

The fourth industrial digital revolution in production has emerged from the comprehensive networking and computerization of all production areas. Equipment, machinery, materials, and products apprehend environmental conditions and processing status via sensors communicate with one another via embedded software and thus optimize the production process in an unprecedented manner. From an industrialization point of view, the states have the highest number of smart manufacturing for MSMEs in India.

Smart Manufacturing: Ease of Doing Business for MSMEs

Smart Manufacturing has become the need of the hour. As the pandemic propels, there is a speedy shift towards automation (MSMEs) required to be made part of the transition to ensure more inclusive growth and foster poverty alleviation. The Coronavirus outbreak caught all unschooled companies digitally on the back foot. In the aftermath of a pandemic, industrial automation has seen acceleration across various sectors. It had a visible impact on operations in factories due to the fear of disease. Conversely, digital natives have managed to keep operations ticking from the outset as they are conversant with the remote working model.

Indeed, digitally equipped companies have been part of the ongoing Industry 4.0 paradigm from its early days, introducing automation in traditional manufacturing and industrial activities by deploying smart technologies. Besides automation, the smart business and manufacturing practices comprise big data capabilities because of the internet, artificial intelligence, machine learning, and another similar one.

Fourth Industrial Revolution Benefits

The pandemic only accelerated the transition as more corporates quickly realized all the advantages of remotely managing industry operations backed by the accurate cybersecurity levels. As a result, the companies kept the business continuity plans going without any effect of lockdown restrictions & minimal access to the physical units.

• The advantage of learning the digital connection, the entities better-managed supply chain disruptions. However, some of the digital latecomers have been fast-tracking digital and automation programs.
• Supported by 24 hours connectivity, automation, advanced analytics, and smart manufacturing for MSMEs, ‘acceleration’ is the buzzword in adopting the Industry 4.0 or Fourth Industrial Revolution norms.
• Additionally, the automation and AI-enabled tools are especially beneficial for sectors grappling with the severe shortage of workers—some of migrated to their native towns because of the closure of manufacturing units during a lockdown.
• Despite various advantages of Industry 4.0, one crucial segment is missing the digital journey. Significantly, smart manufacturing MSMEs play a pivotal role in India’s economic development by driving employment, exports, and inclusive growth opportunities.

Business Barriers & Inclusive Development

In the role of promoting inclusive development, the MSMEs miss a global automation journey, which will exacerbate economic inequality. While addressing the issue, MSMEs need to leverage the support that a government and industry ecosystem offers to work for a common cause in overcoming the challenges.

Inadequate Infrastructure

The sector must be availed infrastructural technology and skilled manpower in tune with the global trends. Some of these include no easy access to capital, a lack of skilled employees, and a plethora of rules and riders in embracing smart manufacturing for MSMEs that are more attuned to serving large companies. Consider the skills shortage.

Obsolete Technology

Except for a few industries, the MSME sector is characterized by low and outdated technical practices, making it a handicap compared to other emerging market’s technological levels. Furthermore, even large sections of the workforce have been unemployable in an Industry 4.0 ambiance. Accordingly, apart from the upgrading academic curricula, working persons should be provided opportunities to upskill or reskill in ascertaining they remain relevant for the new roles in an age of automation.

In this scenario, the industry, academia, and the government must all collaborate in enabling the emergence of an Industry 4.0-compatible workforce. Such skilling initiatives must be fast-tracked via subsidies, tax incentives, and other supportive measures for MSMEs to acquire the requisite Industry 4.0.

Branding and Marketing

The MSMEs’ branding and marketing activities are extremely low due to low exposure of the market, low promotional outputs, and the high costs involved in branding the products. Integrating smart manufacturing for MSMEs realm is also needed because the world of connected devices and sensors offers the treasure trove of data that can drive better business outcomes through substantial insights. Moreover, connected gadgets make up the Industrial Internet of Things’ edge devices, which is the fountainhead of Industry 4.0.

Limited Access to Global Markets

The inward performance of foreign companies has been highly successful in India, but the outward performance of the Indian companies is not a success story as a result of globalization. Since many MSMEs are suppliers of the raw materials and other goods for large corporations, they are also impacted if vendors in the value chain are not completely compliant with the latest smart manufacturing protocols.

Hence, if MSMEs are mainstreamed into Industry 4.0^[1], all stakeholders stand to gain. Corporates gain from an indigenous and reliable supply chain gives the government higher tax revenues and society at large from many more inclusive outcomes and opportunities.

Mission Smart Manufacturing for MSMEs

• Increase capital investments in the state.
• Provide quality infrastructure for industries to flourish.
• Promote in ease of doing business to create a business-friendly environment.
• Generate maximum direct and indirect employment and opportunities of self-employment for both skilled and unskilled workforce.
• Provide pro-active support to MSMEs (micro, small and medium enterprises).
• Skill the workforce of a state to ensure employability and empowerment.
• Ensure balanced, sustainable, and inclusive economic development.
• Promote a spirit of innovation and incentivize entrepreneurship among youth.
• Ensure effective implementation of the policy.

An Initiative towards Aatma Nirbhar Bharat

In emerging economies like India, inclusive development is particularly pertinent in addressing COVID-19 impact. The MSMEs are critical for ensuring that economically vulnerable people can have suitable opportunities to rise above the poverty line. These cohorts include migrants, women, and minorities, who have a better chance of exiting poverty by taking employment in MSMEs spread across India. MSME sector assumes a central role in driving the government’s Make in India initiative for an Aatma Nirbhar Bharat.

Through the Fourth Industrial Revolution’s new-age business model, smart corporations and digitally-enabled MSMEs can enjoy a symbiotic relationship that promotes greater production efficiency, ensures lower time to market, and higher service satisfaction for customers other stakeholders.

In the Nutshell

The small and medium scale sector has been assigned an important role in the country’s industrial economy on account of some of its inherent advantages like low capital intensity, high employment generation capacity, GDP and export earnings, regionally balanced development, and even distribution of wealth and income. The fourth industrial revolution has begun and also offering attractive opportunities for industrial companies. However, the industrial internet is not an end in itself. It is closely tried to clear economic objectives and holds the potential for clear differentiation in global competition.