The Japanese had mooted the concept of robots moving to mainstream in manufacturing, replacing labourers. It did not work perfectly the way it was fancied (the imperfection was aptly exploited by Chaplin in Modern Times, putting himself as a guinea pig before an automatic feeding machine; the age-old satire remains refreshing even to this day).
Civilisation had a different version of it in store – instead of the labourer, processes got more automated, thanks to the digital age. The automobile industry still uses robots in crash tests and extreme driving simulations. Autopilots, as they are called, are robots that would vary speed and direction to test the limits of a product prototyped by an automaker.
Nonetheless, the vendors, who make auto-components, would need autopilots too – to test the speed and direction of processes. This may sound fanciful; yet, process automation has taken off the ground in the SME auto sector, where prospering business is the pay-off to fierce competition. For the Indian auto SME, this bandwagon is wide open, provided it overcomes a few challenges.
The vicious cycle of IT investments chasing changing processes
Many of the processes in SMEs are still evolving. Hence, deciding on a process before digitisation runs into a vicious cycle. More often, SMEs resort to a word-of-mouth ERP system, hiring expensive consultants, only to realise that what they have achieved is a bigger accounting system that pretends to do much more. Eventually, many such projects digress from the core objective of improving efficiency.
Efficiency, again, is not just about cutting cost but developing capabilities as opportunities unfold. This would mean keeping processes dynamic and optimised at the same time. One pitfall in the pursuit of efficiency is that we end up cutting capital budgets to find little effect on the variable cost. Yet, with the need for dynamic cost structures, like different ingredients in the same product made for different customers, our handle on the variable cost components is the determining factor in competitiveness; this would sustain efficiency in the long run.
From an IT perspective, digitising processes is not the sole answer, unless the system renders the right process on demand, each time finding a new optimising avenue.
Processes made to opportunity; execution at one touch?
To visualise this, consider a mid-sized auto-lamp manufacturer, who would supply to multiple automakers, each having different specifications for its models. One automaker may put more emphasis on night-driving safety, hence would like lighting systems designed for better lateral illumination. Moreover, models would have varied battery power, affecting the electrical parameters of the lamp. Consider the aesthetics, knowing that auto is a very fashionable industry; a lamp would have to comply with different casing designs. When an auto-lamp maker is beckoned with orders of such diversity, he would have to leverage product modularity and sharing of resources in the most efficient manner. The optimisation may span demand planning, design, production scheduling, and distribution, not to mention different lead times attached to those. It would then need processed information to find the most efficient way to consolidate orders.
Normally, not many SMEs have the wherewithal to look at this aspect from an end-to-end perspective. Rather, most optimisations are local and manual. For example, production schedule is often left at the behest of the plant manager, who would optimise within the immediate job orders placed on him with resources available on the shop floor. Hence, processes, for end-to-end optimisation, demand IT systems to be enablers and prescriptive at the same time.
Sadly, let alone the limited knowledge on choosing right systems, SMEs are still grappling with the problems of volatile IT staff in the segment and scarce capital budgets. Right IT at the right time, for the right purpose, and paid for as it is used, remains a pipedream; or is it?
Turn on the tap; let the processes flow
Change in technology is driven by adoption; even compelling innovations would have to change their course to attain commoditisation. The same has happened to IT of late. On demand and prescriptive systems, but with no capital investment, is what we call ‘IT on the tap’.
This is not a fanciful thought, but a well-adopted paradigm in mid-sized manufacturing.
IT service delivery has changed. With remote management capability, a diverse set of systems can be delivered incrementally and in concert, while being hosted remotely. This has made the adoption cycle shorter, bearing less risks. For example, one may simply start with the modest milestone of automating plant schedules based on changing demand patterns. The sources of data (like plant control panel systems, or the PLC, and order records) could be shared over a secured network to an accomplished ‘IT on Tap’ provider, who would deliver the needed optimisation rules on the browser to users with discretionary control (systems referred to as SCADA). To the SME, it is IT rented and paid on usage – no capital investment. Moreover, transition to IT on tap is quicker, sometimes taking less than two to three weeks for the system to go live.
IT on Tap is the answer to the Indian auto SMEs need to bridge the efficiency gap, which is widened on a global turf. Having it, the domestic and world market looks bigger to us. Question: Does the downturn actually affect the decision to embrace it, when capital investment is not incidental here?
If anything at all, the reliability of the IT provider does matter.
At TCS, we claim that our ‘IT as a Service’ for the SMB does not stop at on-demand IT but extends to on-demand processes, testing the process limits in speed and direction. One would only pay for IT on usage, keeping capital investment aside. In turn, we would render processes helping the SME autopilot its efficiency journey.
Ramaswamy is Global Head- SME with TCS.
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Updated Date: Nov 24, 2009 15:05:47 IST