Manufacturing is the new disruptor
It is now the turn of traditional manufacturing to undergo massive disruption with the advent of additive manufacturing
The one disruptor that has impacted jobs the most is technology. And even after 50 years, Moore’s Law is still impacting technology whereby computing power doubles every two years. These developments will continue and perhaps become more disruptive in the days to come. There is almost no real world problem for which a technological solution is not available (climate change, energy sources, raw materials, clean water). The challenge is making technology affordable and accessible.
It is now the turn of traditional manufacturing to undergo massive disruption with the advent of additive manufacturing. The term “additive” has turned the basic concept of manufacturing on its head. Traditionally, manufacturing meant starting with a piece of raw material and reducing it into the desired shape using various tools and processes. The basic operation was to “subtract” material to make something useful.
In additive manufacturing, material in a powder state is progressively “added” together to form a new product. Material waste is substantially reduced, combinations are created that result in new materials with even better properties. The process is much faster, change from one product to another is quite simple and therefore scale is not a pre-requisite. There are fewer limitations in designing a product in terms of shapes and contours, thereby creating many more possibilities to design and make products with significantly improved performance.
For example, in an aircraft engine, the fundamental principles in design are having a material that can withstand high temperature and pressure, be as light as possible, have the ability to transfer heat quickly and have convoluted but smooth, tiny passages for efficient fuel injection. An increasing number of components of an aircraft engine are now 3D printed. They are lighter, have better performance and faster to make.
If we look at cars, a lot of space is taken up by the engine and the radiator. If the size and weight of the radiator and engine is substantially reduced using 3D printed components, it would result in far more efficiency and better performance.
A tooth implant or a knee joint made exactly to one’s specific needs, created within minutes — all conceivable using additive manufacturing. What’s common is having a capable 3D printer. Everything else could be designed for a specific individual. Additive manufacturing not only facilitates advent of newer materials with unbelievable properties, it also allows manufacturing to be decentralised and customised.
What does this mean for the traditional value chain of manufacturing? For the future of materials? What about the future design of factories? The logistics industry? Will warehouses be needed anymore? Can 3D printing “factories” be built in city centres? Most importantly, what skills will be needed?
This disruption is beyond Industry 4.0. It is not a futuristic science fiction idea; all these developments are happening as we speak powered by the Industrial Internet. So is the manufacturing revolution and our ‘Make in India’ programme geared towards these new realities? Let us consider or re-consider.
Why do we want to ‘Make in India’? If the answer to this question is only to increase jobs, then perhaps the rationale is wrong. Manufacturing will indeed create jobs but they will be fewer, high value-add jobs. Further, if manufacturing is viewed only through the lens of the number of jobs, then we risk a decline in productivity and would make us uncompetitive in the global economy. The low labour cost, wage arbitrage rationale when setting up manufacturing, is short-lived. Wages soon rise and there is always another country that will offer lower wages.
So then why should anyone “Make in India” ? Because India has a great advantage in this new world of manufacturing. Every country has its own ‘Make in country’ programme, with domestic demand as the key driver. India has a $2 trillion economy, growing at 7 per cent per year.
The continued need for all kinds of goods and services, including infrastructure and defence, is its most significant advantage. Second, the Indian youth have the aptitude for IT and science; skills core to this new world of additive manufacturing. Third, the Indian mindset of frugality manifests itself in design and in manufacturing. The world is looking for affordable/frugal solutions and India can leverage this capability for export. There is hardly any other world economy which can combine the above three attributes of market size, talent pool and the right attitude.
So what should India be doing to encourage ‘Make in India’? First, India needs to take urgent action to skill and train people to take advantage of new jobs that will open-up, including reskilling of the existing workforce to meet new manufacturing requirements. Product design for additive manufacturing can be the new “outsourcing” service from India.
Second, we need to look at manufacturing as a long-term activity with the mind-set of investing, taking risk, and reinvesting profits in newer technology. Both entrepreneurs and the government need to appreciate this fact.
What about exports? Exports can add further opportunities in addition to domestic demand. If we are globally competitive and offer a compelling value proposition (like frugal innovation), then we can overcome any trade barrier. India should leverage its export credit agencies while competing with other nations in getting access to markets particularly in Africa and South East Asia.
India has done brilliantly in the services economy but we have lagged in manufacturing. A “traders” mindset spilled into manufacturing resulting in a shortterm focus, expectation of quick returns and minimal investment in innovation. With disruption in manufacturing, we have a golden opportunity to seize the moment.