Industrial Automation and Control: Issues and Trends

Sudeshna Das is director at ComConnect Consulting

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Compelled by the continuous pressure on profitability improvement, manufacturers continuously look to invest in solutions that will help them increase their productivity with minimal assets. That’s where industrial automation acts as an enabler to increase reliability and efficiency, thereby improving return on investment (ROI).

Industrial automation enhances production rate and quality by incorporating innovative and integrated technologies, thereby reducing costs associated with the production process. It takes mechanisation one step further by replacing human labour with computer programing and automation devices and thus achieving a performance superior to manual operation.

Using devices such as programmable logic controllers (PLCs), industrial personal computers (PCs) and programmable automation controllers (PACs), automation solutions streamline industrial processes without requiring human intervention. A study by McKinsey Global Institute estimates that automation could raise global productivity by as much as 1.4 per cent annually. Moreover, all occupations have a partial automation potential as a significant portion of their activities can be automated.

Accenture forecasts the potential of automation devices to double the gross value added (GVA) across 12 developed economies by 2035, with labour productivity increasing up to 40 percentage points. All the above facts suggest that automation as an industry has huge growth potential.

Market opportunity

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Globally, the automation market is expected to witness rapid growth in the coming decades. Some of the factors augmenting the growth of automation market include demand for operational efficiency, technology advancement, system integration and advancement in M2M communications technology.

Similarly, automation market in India has been growing significantly over the last decade due to the increasing need for reliable and cost-effective ways of production. According to a report published by Ken Research, the Indian industrial automation industry is expected to reach ` 197 billion by 2020 with growth driven by rapid adoption of modern technology backed by cost-saving features. The demand for factory automation solutions in India is anticipated to surge with increase in domestic manufacturing and emphasis on increased process efficiency.

Moreover, relaxation in foreign investment norms has encouraged a number of foreign companies to set up their businesses in India. The high quality and quantity of products and services offered by these companies have helped to transform the Indian industrial automation market.

Introduction of automation in the Indian economy has resulted in higher-quality products, faster and more efficient production (thereby reducing waste) and accidents minimisation on the production floors.

Market drivers

With rising cost of production in China and strengthening of Yuan against dollar, investors are looking at alternate manufacturing destinations. India is aiming to become the preferred manufacturing destination for global players. However, for that, it needs to focus on quality production (zero defect) and environment-friendly manufacturing (zero effect). Both are possible only with a proper understanding and application of industrial automation.

The Make in India initiative is also expected to play an important role in boosting adoption of factory automation solutions in the country. With major investments expected in the Indian manufacturing sector, the demand for factory automation solutions in the country is anticipated to rise over the next five years.

According to a TechSci Research report, factory automation solutions are seeing a growing demand from automotive hubs across India. Other sectors driving the demand include oil and gas, discrete manufacturing and energy management.

Process automation is currently under some threat because fresh investments in commodities like steel, cement and fertilisers are drying up due to global over-capacity. So, demand from those areas is expected to flatten a little. Sectors with good prospects are pharmaceuticals, food processing, engineering components, defence manufacturing and, of course, infrastructure.

Automation industry offers services for other manufacturing companies in different industrial verticals. Proximity to these industrial verticals becomes a major contributor to its growth.

In India, the western region has the highest concentration of manufacturing plants, mostly in the states of Gujarat and Maharashtra (37 per cent of establishments) followed by the southern states of Karnataka, Tamil Nadu and Andhra Pradesh (27 per cent of the establishments). Every zone has a belt where automation activities have flourished with profound concentration of manufacturing activities.

TechSci reports that western and northern regions are major markets for factory automation in India due to continuing industrial growth and presence of special economic zones and various automotive hubs in these regions.

Market challenges

Automation is not a phenomenon that happens overnight—it takes years for the economy to adjust and evolve with the growing technology. However, evolution of automation from assistance to full adoption is likely to take several decades depending on several factors listed below.

Skilled manpower

The demand and supply of skilled and unskilled workers directly decide which activities will be automated. Countries with higher wages, for example, in service sector, may employ automation sooner than countries with lower wages. India as a developing country still suffers from the lack of skilled manpower in the automation sector.

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