They say change is the only constant.
One has to agree that truer words haven’t been spoken.
In India, change came with the Liberalization, Privatization and Globalization drive in the 1990s. A need like no other was discovered to establish quality domestic enterprises that could eventually compete with global enterprises and create their own niche in the international markets. Thus the Government of India (GOI), started creating a conducive environment for Small & Medium Businesses to allow them to develop to their full potential and be leaders in the global markets.
SMEs themselves, while in their nascent stages could learn a lot from the way industry leaders functioned and organized their firms. These leaders were well established in their sectors, had capital and with relevant R&D, they developed products seamlessly. Adopting their business models and best practices worked as a template for such businesses which they tweaked to suit their purposes. This technique is as relevant today as it was then.
Observing and adopting industrial leaders helps SMEs establish global standards from the word get go. This works like a stamp of approval consequently enhancing their client/customer base.
These industry leaders try to fully utilize the resources that GOI mobilizes to facilitate ease of business. The manner in which they avail themselves of flagship programmes like Make in India, Digital India, StartUp India is worthy of replication by SMEs to counter the talent, capital, and resource crunch they face.
Success stories encapsulate in them how, albeit with countless failures, excellence was achieved. Keeping a track and analysing the life cycle of a company from its inception is therefore a good way of clearing hurdles while in the process of establishing or even introducing new technology in small businesses.
Closely following these leaders, SMEs understand the basic formula to succeed, which is: the goal is to identify something larger than transactions to provide purpose and meanings to their ventures.
In order to effectively comprehend what industrial leaders are doing differently , instead of considering the whole firm, we traverse department wise. Meaning, a firm has several departments that perform specific tasks yet. In each of these departments practices have been inculcated to gain higher efficiency.
Herein, broad compartmentalization in a standard SME is taken into account. The production innovation department designs products innovate them and produce them. A marketing department develops a strategy to place the product within the user’s reach. The Accounting & Finance department handles the industry’s financials and performs audits as and when required. The Purchase department tackles inventory, purchase, logistics, and other such operations. Finally, the Human Resources handles industry personnel.
The driving factor in today’s product innovation are the novel technologies that the Fourth Industrial Revolution offers.
The Fourth Industrial Revolution (or Industry 4.0) is the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology to achieve a shift from mass production to customized production which is heavily in demand. The technology involved could be Internet of Things (IoT), Artificial Intelligence (AI) and Machine Learning (ML) , robotics and 3D Printing and nanoparticles These are said to be helping countries increase efficiency, enable high levels of product customization, and improve speed to market.
Due to the aforementioned advantages, the Indian manufacturing sector too has been slowly transitioning to Industry 4.0 over the last two years. But the Covid-19 pandemic has necessitated that the pace of this transition be quickened.
Innovation in production through practices can be brought about at various stages of product development –product creation/design/development, process innovation and tech upgradation.
Tools like Big Data. AI and ML help navigate data being produced when it comes to any industry and can be used to find patterns. Further analysis could yield conclusions that help create products. This is a practice being widely inculcated in today’s industries.
For example, pharmaceuticals. Using a machine-learning algorithm, MIT researchers have identified a powerful new antibiotic compound. This program was run against Broad Institute’s Drug Repurposing Hub, a library of about 6,000 compounds. This yielded the compound termed Halicin.
An Indian startup called Nocca Robotics uses the trio of Big Data, AI and ML for clean technology and created Noccarc A600 and Noccarc S200 both being waterless solar panel cleaning robots.
To address the dire COVID situation in the world they also created two critical care medical devices- Noccarc V310 – an ICU ventilator and Noccarc H210- High Flow Oxygen Therapy Device. Both the products are clinically validated and certified for IEC standards. The products are indigenous, with top of the line specifications, yet affordable, making it available for serving every tier of the society.
Digital transformation initiatives are expected to cover in-bound, in-plant (movement of goods within the factory), and outbound logistics to establish digital continuity across the value chain. Sectors like textile, automotive, pharma and healthcare would be among the earliest to adopt higher automation.
The manufacturing sector has several of its processes heavily dependent on its workforce. But certain companies have taken initiatives to lessen this.
Process innovation in Assembly Lines and Factory Floors
Bajaj Auto is one of the earliest adopters of cobots – collaborative robots- in India. Bajaj Auto is the biggest Indian customer of Universal Robots, a Danish company that builds cobots.
Cobots are much smaller than industrial robots. An industrial robot’s area of movement needs to be fenced whereas cobots can work side by side with humans on the factory floor. Bajaj has deployed 150 cobots in its factories and at vendor sites and its aim is to have “man-less assembly lines” in two-three years.
Bajaj Auto’s Vice President of Engineering, Vikas Sawhney says that if a job is hazardous/repetitive or requires applications to be done of consistent quality, that task needs cobot.
L’Oreal India in Pune uses cobots. New Engineering Works an MSME in Jamshedpur, uses cobots for auto components’ machining, leading to a 40% increase in their productivity.
In this regard an Indian start up called GreyOrange can also be mentioned. With its tagline “Inventory in Motion”, it has developed an AI enabled software brain that they call GreyMatter. Robots leverage GreyMatter software built into their core to communicate with other robots and with the central system, creating continuous feedback between the algorithms in the software brain and the real-time operations on the floor.
Flipkart, Myntra, DTDC, GoJavas and Jabong are among the e-commerce and logistics firms that use these robots to automate distribution at their large warehouses across India.
Process Innovation in Process Control:
Automation was earlier confined to the control room of plants, but now it’s a part of anything that could lead to safer operations, nimble workforces and an enhancement in productivity.
In a highly regulated pharma industry, there’s a common control system that controls the manufacturing process parameters like temperature and humidity. This control now is a combination of sensors, AI and IoT that ascertains when the control parameters are about to leave the range thereby triggering a response where automation takes corrective steps. This is seen in companies like Cipla where real-time data is used to achieve closed-loop operations and reducing incidents through monitoring and safety controls.
The potent trio of ML, AI and Big Data have the potential to lower the cost and time of drug trials, to better determine patient outcomes with established drugs, and to better design new drugs. It’s achieved by embedding IoT tech in most of their operations which helps collect real time data throughout the life cycle of the product. For example at the patient end, Cipla is upgrading their inhalers with IoT devices to help in patient education, drug adherence and dosage administration.
There are AGVs (Automated Guided Vehicles) that can make production dynamic and scalable. An AGV is a portable robot whose movements are controlled by a combination of software and sensor based guidance systems. Sunil Mathur, MD and CEO of Siemens India says “With AGVs, manufacturers can improve the production process and optimize the manufacturing flow. It allows them to change their manufacturing lines into a flexible and modular production. AGVs are the backbone of the digital factory”
McKinsey Global Institute indicates that by 2025, 3D printing could have an economic impact of US$ 200 to US$ 500 billion annually. SMEs employ this technique to achieve even the most complex product customization.
The 3D Printing industry has revolutionized the process of production. Morphedo is an Indian startup recognised under GOI’s StartUp India scheme. Its an online 3D printing services platform for rapid prototyping and customised part manufacturing for businesses. They also provide 3D printing consultancy, 3D designing for 3D printing and 3D scanning for reverse engineering. Other such Indian startups are Supercraft3D, 3Dexter, etc.
Interested in cutting-edge technology, mobile phone specialists Case24.com analyzed findings from online 3D printing services provider Sculpteo, who surveyed 1,000 professionals (from a range of industries) to better understand how they are using 3D printing technology. Above is an infographic of the same.
TECHNOLOGICAL UPGRADATION & MAINTENANCE:
Existing machinery and tech has to be slowly phased out in favour of the Industry 4.0 tools for superior manufacturing. However this does not entail completely discarding the existing systems. One of the practices the company’s today are seen observing is revamping the old upholstery through technology to perform the same task as an advanced version of that machine would perform. This is tech upgradation and it greatly helps companies in cost optimization.
For example, again citing the use of cobots by Bajaj Auto, it is seen that cobots can be easily integrated into existing production environments thereby automating various production and manufacturing tasks. The programming of a cobot is easily accomplished through what is called a teach pendant and requires no special installation or even programming experience helping them facilitate tech upgradation.
The company ABB manufactures wireless, pocket-sized, smart sensors that can be screwed onto older motors to sense temperature changes, vibrations and electromagnetic strength around the motor. It uses IoT and Cloud Computing to upload data to a cloud where it is analyzed and sent back to the operating system for optimizing performance and predictive maintenance for that motor.
‘Out of sight, out of mind’ is one phrase that accurately sums up the need for marketing your brand.
In this era, the audience is being bombarded with information, so what does one do to successfully drive home their message? How does one identify their target audience? How does one retain their existing customer base and how to create sufficient buzz around your product to keep yourself relevant in the market? Most of these goals are achieved by the Marketing department in a company.
For any business, the marketing strategy follows certain tried and tested methods to create a thought-provoking campaign that lasts in the minds of their clientele.
- Prior to starting a marketing strategy, it is imperative to define a target market and keep them in mind to generate content. All platforms that have the presence of the target audience need to be used. Case in point: Asian Paints reoriented its marketing focus on women after a research found that it’s the women of the house who primarily make decisions when it comes to home décor.
- Before strategizing, establishing a clear idea of what the brand has to offer and creating their logo and imagery accordingly. For example: matrimonial sites like shaadi.com , jeevansaathi.com
- Two-thirds of small businesses rely on websites to connect with their customers. Websites are the tools that showcase our availability to the customers and are also a mode of contact initiation.
- Social Media Marketing is a key feature in any strategy developed today. Running Facebook, Instagram, Snapchat, YouTube accounts to express one’s brand and keeping it in the public eye is essential. Some brands using SMM to their advantage are Sabyasachi, Vogue India, Pizza Hut, etc
- Search Engine Optimization (SEO) is the practice of creating web content in a manner such that the search engines are able to detect their content and display them higher in the search ranks. This increases visibility to the site, ropes in potential customers, thus increasing conversion rates. Today wherever there’s an emphasis on content marketing, SEO comes into play.
- Mobile-friendly email marketing is another such domain. Zomato, Fasoos, and Dominos pursue an aggressive email marketing strategy.
- Combining online and offline marketing strategies to avoid “putting all your eggs in one basket”. Amul is a good example. Whenever there’s a new issue, the Amul girl has its poster ready. Their boards are present across cities and Amul has a strong digital media footprint.
- Sharing knowledge through webinars, blogs, YouTube tutorials like the Indian cosmetic company Nykaa does.
- Tools like Pay Per Click (PPC), Google Ads, Google My Business tools are employed by most companies.
- Use of Market Automation Tool (MAT) like Omnisend, Marketo, MoEngage, WebEngage, Eloqua, etc. for dynamic behavioral marketing. Not many companies in India use Behavioural MAT which is mostly used by e-commerce platforms like Flipkart, Amazon. Recently, Flipkart bought Appiterate, a mobile marketing automation platform in line with its “mobile-first” policy.
Marketing automation software is designed to help capture leads, develop relationships, and move prospects through the sales funnel at scale. It includes several categories of functionality: email, social media, web marketing, multi-channel marketing, and analytics. It harnesses customer data from multiple sources and helps develop marketing strategies and tactics that work across different mediums.
Although it has some similar features as is present in CRM (Customer Relationship Management), MAT is chiefly used for marketing department and CRM for sales and purchase.
ACCOUNTING & FINANCE
SMEs (Small and Medium Businesses) generally require bookkeeping software, which focuses on recording financial transactions via a general ledger and managing payroll unlike ERPs which are tailored specifically for individual companies.
True SME accounting software is distinguished by having better tools for financial data management, reporting, analytics, tax preparation, etc. SME accounting tools have become increasingly affordable in recent years, making them the preferred choice for most businesses.
Some of the leading products suited to small businesses are:
- Tally which has been in the market for more than 20 years and is used widely
- TranZact is free and aimed at SMEs to digitally transform their business process from inquiry to dispatch.
- QuickBooks requires training for new users, but it is convenient to use with an accountant and other financial services, because most providers in the space are already familiar with it.
- FreshBooks is a bit simpler and requires less training;
With the advent of Industry 4.0, CFOs would have to continually reinvest themselves to deliver accurate, concise and real time results. Therefore innovations in Accounting Softwares cannot be missed by them. Some innovations are:
- Cloud Based Accounting
Cloud based Accounting Tools enable accountants to access financial data anytime and anywhere delivering real time realities on their fingertips. This helps enhance constant collaboration between accountants and clients.
For example: ZOHOBOOKS is a cloud based computing accounting software catering to Indian manufacturing sector companies like Lion Picture and Frames, Popcorn Furniture, etc..
- Accounting Software Integration
Accounting operations involve different jobs like – manage invoicing, process payment, handle payroll, track inventory, and manage financial reports. They may rely on different software solutions. A lack of synergy between these solutions will be tedious for the company.
Herein Accounting Software Integration could work wonders. This integration can help automate the information sharing between various accounting operations quickening the overall process. It reduces chances of errors, redundancy and makes the bookkeeping clean.
For example: Integrating Tally software with TranZact platform.
- OPTICAL CHARACTER RECOGNITION (OCR):
The Optical Character Recognition (OCR) technology allows accounting firms to automate and accelerate manual entries. Accounting firms can leverage OCR technology to convert textual information to digital files using scanners and mobile device cameras.
Giddh software offers this facility for manufacturing firms.
- ARTIFICIAL INTELLIGENCE (AI)
Artificial Intelligence (AI) makes it easier for accountants to accelerate and simplify data related tasks – bookkeeping and transaction coding.
Apart from automating repetitive tasks, AI will further enable accountants to deliver functions of higher value like business strategy implementation and financial advising.
- MACHINE LEARNING (ML):
It’s a sub field of AI and can be used to create detailed reports by extracting financial information from various resources. It improves visibility of spending patterns, earnings, and more by offering tools to track changes in business finances.
According to Accenture, use of robotics could reduce accounts operations cost by 80%.
Robotics can be used to automate repetitive tasks, entering financial data, saving the financial data in relevant formats, generating reports, and performing tax operations – quickly and accurately. Though different businesses will have different requirements, Automation Anywhere RPA (Robotic Process Automation) jumpstarts the transformation of Finance and Accounting operations by eliminating manual processes to reduce costs, strengthen controls, improve accuracy, accelerate financial reporting, and empower employees.
- NEXT GENERATION MOBILE APPS
An upcoming option is next gen mobile apps that secure the mobiles provided by the firm under the bring your own device (BYOD) strategy that can help access and record financial transactions of sensitive nature anytime and anywhere.
Integral to any manufacturing industry is the Purchasing department. It broadly focuses on sales, inventory, customer support and collaboration .The software that manages these tasks is known as CRM (Customer Relationship Management ) System.
When it comes to handling Indian SMEs, Zoho, Freshsales, and Maple CRM are some CRMS based in India tailored for SMEs.
Certain trends are being estimated in 2021 when it comes to innovation in CRMS. They are:
- ARTIFICIAL INTELLIGENCE – BIONIC CUSTOMER SERVICE:
Bionic service gives sales executives the best action to take while maintaining an empathetic human touch, critical to the entire process.
This is enabled by AI used in CRMS which applies AI to customer interaction, analyses it and quickly recommends the next best steps, thus helping guide agents past any blind spots in the process.
Sprint, a large US telco, serving almost 60 million customers implemented this and revolutionized its customer care services thereby increasing its NPS by 40% and had an eightfold increase in customer upgrades.
- ANTIQUATED SILOS TO CHANNEL-LESS INNOVATION – OMNICHANNEL FOR CUSTOMER BRAND ENGAGEMENT:
Businesses need to stop building IT solutions from the outside in and start building out from the core of the business. This results in a unified system that drives customer engagement on every channel – a shift from email and chatbots to Facebook and Alexa. By moving from an omnichannel to a ‘channel-less’ strategy, each interface is delivered insights from the same centralised ‘brain’ (AI) that enables a consistent experience regardless of the device they may be using.
Optus removed their existing silos and integrated their channels to make real-time decisions to generate personalized offers. By integrating their CRM and mobile, Optus achieved customer interactions to create one-to-one, real-time, contextual offers in less than 200 milliseconds and increase relevance.
- IOT AND AUGMENTED REALITY – PREDICTIVE CUSTOMER SUPPORT THAT RELIEVES SELF-SERVICE FRUSTRATION:
Businesses aspire to solve customer dilemmas even before they arise. But as customer service solutions shift from offline to online mechanisms, it’s difficult to gauge customer emotions through languages or tones. Not receiving requisite answers could lead to customers’ frustration. So customers’ state of mind cannot be ascertained which is a death knell for businesses
Augmented Reality (AR) and IoT can help here. If the device is IoT enabled, then using AR his issues can be resolved visually in real time. Similarly software installations and fixing bugs could be carried out as well.
HUMAN RESOURCE (HR):
Human Resource is a term used to describe the individuals who comprise the workforce of an organization.( although it is also applied in macroeconomics to, for example, business sectors or even whole nations.) Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources).
Human resources may set strategies and develop policies, standards, systems and processes that implement these strategies in a whole range of areas.
Established businesses like TATA employ an Ethics Counsellor to smoothen internal friction in their company. JP Morgan Chase runs a Women on the Move Programme that empowers their female employees. Starbucks had shelled out $250 million to provide education benefits to all its employees. These are great initiatives but for small businesses it’s not possible.
SMEs have to grapple with many problems:
- SMEs face a resource crunch and require better methods to solve the complexities for better cost optimization on their assets and requirements.
- Cost is a major constraint in introducing many HR practices that can hugely benefit the workplace and employees and SMEs have a cost restraint as well.
- SMEs are struggling to fill the talent gap, identify the right talent, find a skilled workforce, and retain talent. This is challenging when you have to create an entire department.
- Most SMEs do not focus on Training and Development activities. What they fail to realize is that T&D is a huge motivator for employees who associate their individual growth with such programs.
- Vendor management, complexities associated with the workforce, compliance, workforce administration, and the need for smart analytics are seen in SMEs.
SMEs can overcome this issue by HR Outsourcing and using Cloud HR.
MSME like Ekincare which is a SaaS company, needs HR Solutions. They outsource this service to Keka HR and Payroll software which is a cloud-based HR for the seamless working of their organization. Ekincare itself delivers the product ‘Ekincare’ which is a health management software used by their clients like Barclays, who integrate their product with their own HR systems to provide healthcare solutions to their employees. EZ Payroll is another Cloud-Based HR launched by Excelity Global.
Today, the manufacturing sector is tethering on the line that crosses from acceptance of Industry 4.0 to the actual adoption of these technologies.
In this respect, India seems to be doing good. Capgemini Research Institute, recently published a research titled, ‘Small Factories @ Scale’ Asif Moonim, Senior Director- Operations Transformation Leader Capgemini Invent summarizes it, “We found 30% of factories were transformed into ‘smart’ in the last two years in India. This number is expected to go up to 40% in the next five years. We also found that manufacturers in India are ahead of their global peers with respect to investments in smart factories. When it comes to deployment and integration of digital platforms and technologies, Indian companies have relatively higher adoption of manufacturing technologies than their global peers in some areas.”
Traditional process improvement initiatives like Lean and Six Sigma have helped the manufacturing industry to identify ideas that can drive productivity, but with Industry 4.0 those ideas are getting implemented fast and that too at organization level. We are moving beyond digitization to digitalization with a fundamental change of technology redefining business models and providing new value chain opportunities, rather than just automating a single process.
It’s evident that innovation through Industry 4.0 is no longer a buzzword. It has now become a reality for Large Enterprises and a vision for Small and Medium Enterprises.