By Veerendra Jamdade, CEO, Vritti Solutions
In the bustling world of Indian manufacturing, something remarkable is happening, quietly but significantly. It’s a transformation driven by the integration of Industry 4.0 solutions into inventory management and supply chain operations. This shift promises to make India more efficient, cost-effective, and competitive on the global stage.
The Challenge of Inventory Management
Managing inventory has always been a challenge for businesses in India. Regular physical audits of inventory, necessary for internal control, tax compliance, and meeting statutory requirements, used to eat up a lot of time and resources. These audits, often done quarterly, semi-annually, or annually, involved matching data from systems with physical counts, and the results were then shared with company auditors.
Traditional inventory audits took anywhere from 3 to 10 days, causing significant financial and operational strain. With Industry 4.0, the same can be done without halting operations.
Recent case studies have shown the remarkable impact of Industry 4.0 on inventory management. Applying Industry 4.0 to manufacturing inventory management led to an impressive 70% boost in efficiency, cutting inventory auditing time by 60% through automation. The studies found that Industry 4.0 features could synchronize more than 50,000 items within just two minutes.
This transformative technology easily fits into existing ERP systems and allows data access from any Android phone. It eliminates manual efforts like tag writing and register maintenance, reducing administrative time needed for physical inventory audits by an impressive 80%. This automation ensures 100% accuracy in item and location selection, further enhanced by barcode and OCR scanning.
For companies with a turnover of Rs 500 crore, adopting Industry 4.0 could save a whole shift, resulting in significant production cost savings ranging from Rs 15-20 lakhs. Integrating Industry 4.0 into inventory management not only improves accuracy but also brings substantial cost and time savings.
Amazon changes it all
Beyond inventory management, India’s supply chain and warehouse management systems have undergone significant changes. India was once behind advanced economies in terms of upgraded supply chain infrastructure until Amazon arrived.
Amazon demonstrated the seemingly impossible, delivering goods to regions previously considered inaccessible with record-breaking delivery times. Amazon’s success prompted Indian companies to rethink their logistics management and approach, realizing that efficient deliveries could become a reality with the right strategies.
Amazon‘s success also influenced courier companies, pushing them to reduce average delivery times from 7-10 days to just 2-3 days while remaining cost-competitive.
Warehouse Automation in India, a long way to go
Despite these advancements, warehouse automation in India is still in its early stages. Only about 5% of warehouses have implemented mechanization and technology. Full automation is primarily seen in large e-commerce corporations, and the use of robotics for material handling is nearly non-existent.
Around 20% of warehouses are semi-automated, using Warehouse Management System (WMS) software for receiving and dispatch, but these systems often lack precise product location tracking.
An astonishing 75% of warehouses still rely on manual processes, resulting in inefficiencies, errors, and a lack of real-time inventory tracking. This presents both a challenge and an opportunity for improvement.
Choosing the Right Partner
Small and medium-sized enterprises (SMEs) embarking on their Industry 4.0 journey should carefully select their collaborators. It’s crucial that these partners offer comprehensive Industry 4.0 solutions that leverage AI, ML, and IoT-based technology. Their offerings should seamlessly integrate with existing ERP suites and be adaptable to the unique needs of each client. They should have a deep understanding of the technical demands and challenges faced by Indian manufacturers. Furthermore, their pricing should remain competitive, and their services should cover both factory and warehouse automation, using cutting-edge technology to drive efficiency and significant cost savings.
ERP Compliance a must to embrace Industry 4.0 for SMEs
While Industry 4.0 holds great promise for India’s manufacturing sector, there are some considerations to keep in mind. Small and medium-sized enterprises (SMEs) may need to become ERP compliant before fully embracing Industry 4.0. Currently, Industry 4.0 factory solutions are primarily targeted at companies with turnovers exceeding Rs 500 crore. However, in the next 4-5 years, there’s growing potential for adoption among mid-size and large companies. The shift towards automation is expected to accelerate as more businesses see the value of modernizing their operations.
The Future of Warehousing Automation
Looking ahead five years, it’s projected that 100% of warehouses in India will undergo digitization or become IT-enabled. As logistics plays a critical role in India’s growing economy, every company is expected to invest in this sector. Automation is the primary solution for cost savings and operational efficiency, given that a significant portion of manufacturing costs is attributed to logistics.
India is on the cusp of a technological revolution that promises to reshape inventory management and supply chain operations. The convergence of Industry 4.0 and automation opens up new horizons for businesses, leading to a future marked by efficiency, competitiveness, and sustainability. As India embraces these transformative technologies, it’s poised to become a global leader in supply chain automation and Industry 4.0 implementation.
(Pune-based Vritti Solutions is a leading SME-tech company)
