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The digitized 80:20 factory will outlast our lockdown

In some ways, covid-19, the biggest humanitarian and economic challenge of our times, seems to have simultaneously hit both the pause and fast-forward buttons on our reality. At the same time that it brought markets, businesses and airports to a standstill, it nudged processes that were moving at glacial speeds onto the fast-track. Within weeks of the lockdown, schools and universities moved to online learning, courthouses started convening remotely, and governments began announcing policy measures that had long been in the works.

In many ways, the outbreak drove businesses to make a quantum leap in digital adoption. For some, this meant pivoting to remote-working almost overnight, by deploying video-conferencing and instant-messaging across their operations. Early adopters include many public-sector enterprises that have traditionally straggled to board the digital bandwagon. Coming out of their bureaucratic shells, these enterprises empowered their employees to work from home, a prospect that seemed inconceivable in the pre-covid world.

For others, especially companies in the manufacturing sector that were forced to operate under 80:20 circumstances, i.e., in an environment that demanded 80% productivity with only 20% of the on-ground workforce, the leap meant much more. These businesses had to innovate and digitize not just to create a safe space for their workers, but also to tackle other unique challenges. Sometimes, the digital moves yielded unexpected rewards.

As covid cases began to rise in India, a manufacturer of essential goods started using an RFID-based app to track its workforce, so that if the need arose, managers could contact-trace and quarantine at-risk employees with precision. The app resulted in other discoveries: it enhanced the company’s time-and-motion analyses, helping identify inefficiencies in the facility design and workflow. The company is freeing up capacity earlier spent on non-core activities (such as searching for spare parts or moving between machines) and implementing measures to boost the productivity of its employees and machines.

In another case, to reduce contact between its factory staff, a chemicals manufacturer retired attendance registers and in-person handovers between shifts at its factories. It now uses an app to record attendance when workers board the shuttles. This app transmits data to the mobile device of their supervisor, who allocates tasks for the shift even before they arrive. The employees receive details of their allocation on their devices and proceed directly to their work-spot upon reaching the factory. Not only does this minimize crowding, it also saves time spent on roll-calls and work allocation.

In a move to enhance workplace safety, an automotive company is allowing only technicians who work directly with machines to enter its facilities. The rest of its maintenance crew has been working remotely, diagnosing wear-and-tear and scheduling maintenance with the help of an app that processes and displays in real-time data captured from sensors fitted recently on the machines. This has raised productivity, with one crew member now able to monitor two or more machines instead of one. Other players in the sector are considering similar remote-maintenance solutions.

A consumer goods manufacturer we spoke to is solving complex logistics challenges posed by India’s staggered exit from the lockdown using data analytics. With pockets of customer-demand and movement restrictions for commercial vehicles changing rapidly across the country, viable routes can become impassable, and vice versa, within a few days or hours. To ensure the seamless movement of its fleet in this constantly changing environment, the company is using a logistics control tower to process location data from the drivers’ mobile phones, as well as up-to-date zone-wise data of covid cases to re-route its trucks on their way on a real-time basis.

It is not only manufacturers, vendors too are innovating rapidly to stay ahead. We know of an automation solutions provider that offered only an enterprise-wide industrialization solution till just a few months ago. Prompted to change gears, the company introduced a subscription model for its solution, that too at a machine-level, and consequently received traction from not only its target clients, but also companies that were never on its radar.

Examples like these are many—companies scaling their digital adoption because of the lockdown and discovering pockets of efficiencies and profits in their day-to-day operations. As India’s lockdown is gradually eased, many of them are likely to retain their newly discovered ways of working. Over time, these moves could drive home an important lesson across India Inc: when it comes to digitization, thinking big and bold often has the larger pay-off.

Armed with their new digital experiences, companies might be able to move their digital pilots more quickly to the roll-out stage and escape what we call the “pilot purgatory”. Catalysed thus, digitization could permeate to all aspects of India’s manufacturing, leading to a productivity surge across the sector. This could be instrumental in helping India achieve its long-standing goal of increasing its gross domestic product share of manufacturing from 17% to 25%, and drive the Aatmanirbhar Bharat mission.

Soumyadeep Ganguly and Neelesh Mundra are, respectively, partners in the Delhi and Mumbai offices of McKinsey & Co.

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