Manufacturing scenario in India post COVID – 19

#SCM #Covid19 #Manufacturing

Sumit Shandilya, Director – IIPE India

Mr. Shandilya is an ‘Operations and Quality Management Consultant’ and a trainer. He is a key professional for deployment of Quality Management System, Lean Manufacturing System, Six Sigma, TQM, TPM, Problem Solving and Operational Performance Excellence. He has been a recipient of numerous prestigious awards for his contribution in Industry like National Merit Award, Speaker of the Session Award, Best Researcher Award, Best Trainer Award, Best Consultant Award, Young Leader Award and so on. He is Adjunct Professor – Operations & Supply Chain at BML Munjal University

The covid-19 highlighted the preparedness and the risk management for disasters and pandemics throughout the world. It has brought global manufacturing and supply chain into the realignment mode and now the world’s focus is on how these sectors shall supersede its own legacy which has been created over the years. The intensity of the current pandemic was so much that the entire globe was baffled. The so called “developed nations” were caught completely off-guard with their dwindling health care systems and infrastructure. The crisis led a heavy blow on the already struggling global economy, people lost their jobs and it seemed like everything was a constant and frozen. Well, we say “there is always a light at the end of the tunnel” or “every night is followed by a day” but the damage which has been done by this coronavirus shall be felt for years by many who lost their dear ones.

On the other hand, if we focus only on manufacturing sector then globally the GDP dug the way right through the ground towards the inner core of the earth. Though, India and China are the ray of hope for the industries and the investors but these two countries have also faced the wrath of this pandemic. While in US, the numbers of cases are still not stabilized, India has shown a tremendous improvement in controlling the cases. Moreover, the vaccine development in India has showcased the world the power and prowess of the country when it comes to the capability and performance. The country is almost ready and economy is reviving. Moreover, as per the Cushman & Wakefield’s Manufacturing Risk Index 2020, India is the 3rd most preferred destination for manufacturing considering cost competitiveness and operating conditions.

Is the world over-dependent on China?

If we have to find any, then there is also a silver lining with this pandemic, especially for Indian manufacturing sector. The world’s second largest labour pool (as per ILO’s statistics of 2018), India has now become preferred destination for the Industries across the world and to be specific, more preferred than China. The last statement can be debatable mentioning the fact that China has been the manufacturing hub of the world with almost 33% of the planet’s manufacturing being done by the country but the overdependence on China is now in front of everyone. After this covid-19 when world realized that majority of their raw materials and products are imported from the largest populated country, the global business houses and the governments are now coming to the terms that they are over depended on China. One such country is Japan, who have asked their manufacturers to shift the base to some other overseas country where India being a prime contender is eyeing the sweet spot to dominate.

Impact of China-US trade war and the new government

The new US government is bringing new laws and modifying the existing trade terms with several countries. The Biden led government would definitely have the agenda of this trade war with China in their priority as the US-China relations are a case study in itself to understand. Meanwhile, India being an ally to US and a strategic partner can harness this opportunity. With the promising budget for FDI, India should lure American and European countries to establish their base here in India thus, boosting the employment and the economy.

Safety, Health and Environment

One of the biggest gains due to the covid-19, Indian manufacturing houses have realized the importance of safety and health of the manpower. Now, the data and statistics suggest that expenditure on health, safety and environment is quite commendable by the Indian manufacturing organizations as they are spending more on safety and health of their employees as compared to the pre-covid era. Also, India has now learnt the art of work from home (WFH) though they need to put a policy and a framework in place for WFH for realizing a long term and sustained benefit for and from their workforce.

Self-reliant and the Digital India

The boost of Aatmanirbhar bharat (self-reliant India) has given an Invitation to the world to make in India and buy from India. The government is asking other countries to come and prefer India as their manufacturing partner. This would definitely give them the advantage of the strategic policies, location, cheap labour, multi-skilling and digital transformation of the country. Moreover, the integration of technology and adoption of automation including the Industry 4.0, Internet of Things (IoT) or Analytics is expected to change the dynamics of the manufacturing sector in the coming years. Also, this pandemic has acted as a catalyst in the upgradation of the manufacturing industries to such technologies. This is also going to boost the supply chain along with the service sector of the country.

With all the better hopes for the future and the promising situation considering the scenario for manufacturing sector, India as a country still needs to work on their Infrastructure. This has been one grey area where the country lacks and this also has been one of the concerns for the overseas manufacturers. There is no doubt that India’s strategic location, manufacturing policies, cheap labour, adaptation & upgradation to the latest technologies would always be the highlight and would attract global manufacturing organizations but it’s infrastructural issues would refrain them for considering India as their sustainable partner for the future. There is no element of doubt that this pandemic has created a lot of mess in the country but a planned and strategic effort would help the country in taking a leap step in manufacturing for the globe.

The views are totally personal to the author.