Global supply chain realignment to favour India as a manufacturing hub
Realignment of global automotive supply chains after the pandemic is a huge opportunity for India to emerge as a global manufacturing hub, says Josh Weiss, President, Hexagon Manufacturing Intelligence.
With most developed countries adopting a ‘Beyond China’ strategy after experiencing the adversities of logistical challenges and market downturn triggered by the pandemic in 2020, India is fast emerging as a key alternative to become the next global manufacturing destination for the automotive industry.
While the country offers a huge advantage in terms of relatively lower manpower costs compared to other markets especially in the West, its manufacturing ecosystem is evolving and gearing for the future, with the rapid adoption of automation, digitisation, and Industry 4.0 technologies.
According to Sunjay Kapur, President, Automotive Component Manufacturers Association of India (ACMA), “A lot of shopfloors are already implementing Industry 4.0 solutions and companies can really benefit from the implementation of automation and AI in critical operations such as welding, forging, as well as in end-quality inspection processes. The quality of our products is right up there with anyone else’s in the world and there is a great advantage in digitising the shopfloor. These tools are transforming the way the industry operates and are pointing us to tap into the growth opportunities ahead of the Indian automotive industry.”
“Automotive and manufacturing in general are on a digitisation journey, wherein there is an increased adoption of Industry 4.0 solutions. The pandemic only helped accelerate that trend, and our solutions are helping the industry digitise its operations and drive reconciliation loops to ensure process improvements throughout the value chain,” added Josh Weiss, President, Hexagon Manufacturing Intelligence.
Hexagon Manufacturing Intelligence is a key supplier of metrology tools such as coordinate measuring machines (CMMs) to leading passenger vehicle, commercial vehicle and two-wheeler OEMs in India along with major component suppliers, which leverage these solutions to ensure quality in the products manufactured.
Weiss told Autocar Professional that the supply chain around the world is completely getting redefined and there are a lot of shifts underway, not just at OEMs, but also at the level of Tier 1, 2 and 3 suppliers in the automotive industry. “India is positioned incredibly well to tap into the growth opportunities by leveraging its capabilities to not just serve the local but the global markets as well. We are really excited about that,” Weiss said.
Hexagon Manufacturing Intelligence specialises in hardware sensors, metrology equipment as well as software and simulation tools for a variety of industries, including aviation and automotive. According to Weiss, says that there is a huge potential for India to support the global markets with the automation capabilities that Indian suppliers have implemented in their manufacturing operations, which are complemented by optimised freight, logistics and shipping costs. With a relatively young population and strong macroeconomics, India is also likely to register robust domestic growth in the coming years.
India is home to world-class talent and workforce
“India is also very competitive from a global perspective in terms of having access to world-class talent and workforce which is required to drive such complex operations. Therefore, products which are produced in India, will certainly tap into markets in other parts of the world,” Weiss pointed out.
While India at present contributes about 5% to Hexagon Manufacturing Intelligence’s global business, the company is bullish about the country’s potential arising out of the global supply chain realignment. “It gives us a lot of confidence and we can draw a lot of analogies from China where we started in a similar fashion about two decades ago, but are today witnessing China contribute to more than a third of our global revenues. We see a lot of those fundamental ingredients that fuelled Hexagon’s growth in China, being available in India. And that is why we are gearing up, investing, and putting the right pieces of the puzzle in place to tap into the next phase of growth in the near-, mid- and long-term in India,” said Weiss.
The company has two R&D centres in India which collectively employ over 2,000 engineers working on global projects. The headcount is consistently rising by a factor of 10-20% over the last few years, which is enabling Hexagon Manufacturing Intelligence to rapidly scale its operations in the country. “The large pool of talent available in India is helping Hexagon be at the forefront of innovation. I do expect it to continue growing but we are also looking at it from an overall operational footprint as well.”
“While R&D is one area, we are also eyeing to scale up our local manufacturing as well as business operations to cater to both domestic as well as overseas markets,” Weiss said.
Hexagon Manufacturing Intelligence currently assembles its high-end metrology machines that help OEMs and suppliers ensure dimensional quality in their end products, at its manufacturing facility in Noida, Uttar Pradesh, and is now beginning work to localise one of its key metrology product lines. “It is viable from financial standpoint, as well as from a quality and cost perspective. Our plan is to start with this specific product line and then expand over time. We are keen to put in place the necessary infrastructure that would enable us to do this,” Weiss signed off on a confident note.
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