Sonam Motwani, the founder of Karkhana.io, a B2B on-demand manufacturing startup, shared valuable insights on building factories for the future (Industry 4.0) and emerging sectors in the Indian manufacturing landscape. She spoke at YourStory’s flagship event, TechSparks Mumbai, on the challenges and opportunities facing micro-enterprises in this crucial sector.
Challenges for Micro-enterprises
- Talent Shortage: Motwani highlighted the significant hurdle of limited managerial and technical talent hindering the growth of micro-enterprises in manufacturing. Despite constituting over 80% of the sector, these small businesses often lack the necessary resources to thrive.
- Data-Driven Approach: She emphasized the prevailing reluctance to adopt a data-driven approach in India, where decisions are often based on experience rather than on data analysis. This hinders the understanding of demand and machine productivity, crucial aspects for Industry 4.0. Motwani pointed out that even with the vision of Industry 4.0, many MSMEs (Micro, Small, and Medium Enterprises) struggle to capture basic data, making it difficult to make informed decisions.
- Standard Operating Procedures (SOPs): Sharing her experience with Karkhana.io, Motwani explained that initially, they faced challenges convincing establishments to adopt standard operating procedures. This highlights the need for on-ground efforts and demonstrations of the platform’s benefits to encourage broader adoption of SOPs.
Karkhana.io’s Solution
Motwani emphasized the critical role of data in driving improvements in the manufacturing sector. Her company, Karkhana.io, aims to bridge the gap by creating an operating system for MSMEs. This platform helps them:
- Access Demand: Connect with larger original equipment manufacturers (OEMs) globally, providing access to new business opportunities.
- Standardization: Implement standard operating procedures, leading to improved product quality and consistency.
- Systematic Sourcing: Establish a systematic and reliable sourcing system for materials and components.
Industry 4.0 and Tech Adoption
A report by Rockwell Automation indicates that despite the vision of Industry 4.0 with technologically advanced and interconnected factories, MSMEs in India currently allocate only 35% of their budget to technology adoption. This reveals a significant gap between the overall vision and the reality at the grassroots level.
Additional Challenges for MSMEs
- High Capital Costs: Acquiring and implementing new technologies often requires significant upfront investment, which can be a major hurdle for MSMEs with limited access to capital.
- Time Constraints: Resource constraints can make the technology adoption process lengthy and time-consuming, further hindering growth aspirations.
Emerging Sectors in Indian Manufacturing
MSMEs form the backbone of the Indian economy, constituting over 6.3 crore businesses and contributing more than 36% to the manufacturing output. However, this crucial sector faces challenges in keeping pace with innovation.
While India has a strong traditional presence in automotive and textile manufacturing, several emerging sectors are experiencing significant growth:
- Internet of Things (IoT): This rapidly growing field presents exciting opportunities for manufacturing various connected devices and equipment.
- IT Hardware and Electronics: With increasing demand for technology products, this sector offers promising growth potential.
- Electric Vehicles (EVs): The automotive industry is undergoing a transformative shift towards electric vehicles, creating new opportunities for manufacturers involved in this space.
Conclusion
Motwani concluded her talk by highlighting the value creation potential in the manufacturing ecosystem. She believes that moving beyond commoditized processes, businesses should focus on transforming components into finished products, generating lucrative margins for all participants. This vision underscores the importance of continuous innovation and adaptation for the future of Indian manufacturing.
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