No Humans Involved

“There is free software available on our website. We invite users to learn how to operate robots. That’s where the new jobs are going to be” says Pradeep David, general manager – India, Universal Robots. If one listens to David carefully, the message is pretty straightforward. That as humans we have arrived, once again. While the Industrial Revolution of the 18^th century took away sickles and handed out screwdrivers, it’s going to be a different story this time. Machines will handle machines. In other words, robots will handle production lines. Humans will just oversee. That’s how large factories in the developed world are already looking like. In May 2016, the mega giant of manufacturing Foxconn shocked the world by firing 60,000 of the 110,000 workers in one of its factories in China, replacing them all by robots. It reinforced the scary statistical predictions by some economists that robots are going to eat away 50% of all jobs in next five years.

But coming back to India, David, and Universal Robots, the Danish company set up its office in India only a year back. It seems like the right time as India is transitioning to advanced manufacturing, which involves 3D printing, IOT, and augmented reality assisted manufacturing. The limited use of robots in some processes has been pretty popular in the country, but advanced robotics is new to India. While quite a lot was said about the use of robots (or bots) in information technology, the Indian manufacturing sector, which employs semiskilled hands in large numbers, was considered a very late adopter until Raymond’s recent big bang announcement.

On 15^th of September, India’s largest textile player Raymond announced that it was going to cut its 30,000 strong workforce by a third over next three years. That works out to 10,000 jobs or roughly 2,000 in each of its 16 plants. “Through technological intervention we are looking to scale down the number of jobs to 20,000, through multiple initiatives in technology. One robot could replace around 100 workers. While it is happening in China at present, it will also happen in India,” Sanjay Behl, CEO, Raymond, said to The Economic Times.

To the global and homegrown robotics companies which are just beginning to bet on India, it seems like good news but they are not terribly impressed. “Indian manufacturers need to wake up, when we see number of robots imported into China last year, it was 75,000 compared with our 2,600, which means for every robot we imported, they imported 30,” cautions David. But what is so good about importing robots when we have humans, a lot of them, especially semiskilled and unskilled. And robots can heartlessly take jobs from them.

The main attraction like in any mechanisation process is the productivity gains and safety as human error is eliminated. “Because we have lot of unskilled labour, it doesn’t mean that we have to make our products low quality. If we are not able to compete globally, it will cause even more job losses and poverty,” warns David. He feels Indian labour needs to upskill to face this transitional challenge. David backs up his claims by talking about Bajaj Auto. “They are big users of our robots. Today, they are exporting to 60 countries. Because very early on they decided not to depend on low-cost labour,” he says.

Late show

There isn’t much data available on the extent of automation and willingness to automate amongst Indian manufacturers. Tata Strategic Management Group, the management consulting arm of the Tata Group, along with FICCI did a first of its kind survey earlier this year. A report on readiness of Indian manufacturing to adopt advanced manufacturing trends was revealed in August 2016.

“It highlights the industry’s perspective through a survey of business leaders (including board members, CXOs and other senior leadership) of more than 50 leading engineering companies in India,” says Shripad Ranade, practice head – automotive & engineering, Tata Strategic Management Group. Ranade indicates that larger companies with MNC roots have been leading the pack and the family-run businesses have been a laggard in adopting advanced robotics in India. “Automotive OEMs were the leaders but now others are also following suit. You should keep in mind that this is predominantly to improve the product quality rather than manpower cost reduction at the moment,” says Ranade.

For smaller companies, the inhibiting factor is not cheap labour. Rather, it is the inability to visualise the ROI on investments in automation. But the initial cost of robotics is coming down progressively. There are Indian companies that are offering solutions as well. But nobody is able to answer what are the actual cost savings when a manufacturer opts for advanced automation. “It depends on the cost structure and quality requirements of a particular business,” says Ranade. 

Robotics is a technologically complex industry and requires a supply chain. There has to be a component manufacturer, an electronic system manufacturer and then a designer who designs for a particular industry. While countries like Germany and France have a well developed ecosystem, India is only now seeing some start-ups in the robotics space. 

India still prefers human hands to shape its goods. But things seem to be changing. “Interest levels are extremely high. The smaller manufacturers, mostly from automotive sector, who are not able to keep their factories running 24/7 have employed robots to be more effective. We are also increasingly seeing demand in FMCG and in electronics for inspection services,” says David.

When India wants to make in India (presumably for rest of the world also), it can’t afford to be outdated or inefficient and still be able to sell. Ranade likes to revisit India’s post liberalisation history for adoption trends. While India is way behind China and advanced robotics continues to be a challenge, he draws a rather interesting analogy to foresee how it can evolve.

“India has traditionally leapfrogged technologies. We leapfrogged to mobile phones without going through very high landline penetration. In the same way, India can directly leapfrog to advanced robotics.” Well, if that happens on a good scale, India must worry even more about skilling of its massive labour force, as high-end jobs (or no jobs) will make way for current jobs. In any case, robots will make in India.