Farewells are always difficult. For Nikunj Sanghi, this one is especially so. Sanghi is a Rajasthan-based automobile dealer of M&M and Hero MotoCorp and employs 400 people. As business comes to a standstill, he knows that to survive he has to be leaner, cut costs and reinvent the business model. He is letting go 70-odd employees. As he prepares for the layoff, he says, “The saddest part for me is the realisation that in this market they will find no other job. But I have no choice. For me it’s a fight for survival.”Zero sales is just one of the reasons for the retrenchment. Amid lockdown and the Covid-19 scare, digitisation has gained momentum across sectors. “Even in a place like Alwar, everything is being done digitally — from booking to payment. Customers don’t even want a test drive,” says Sanghi.Most buyers visit the showroom just once, for the delivery of vehicles. If earlier a sales assistant handled three-four customers a day, now she can easily deal with 15, provided sales are happening at all. This pattern is repeated on the services side. From booking a service to getting the estimate, everything is done through an app. A service adviser who earlier devoted 30 minutes to handle a car and the customer now takes barely two minutes. “We are piloting all these and will roll them out by mid-June,” says Sanghi. This means he will need fewer people but those people will have to be digitally savvy. Automation and digitisation hold the key to his business survival.Robots are rushing in. The pandemic has hastened their march. 76112012Amid the lockdown and an unprecedented business crisis, the automation wave is gathering steam. It is unleashing an army of robots and bots (software robots) across India Inc. Companies, young and old, entrepreneurs, rich and poor, and businesses, strong and struggling, are all gasping for survival. Embracing automation is part of their survival strategy.Vital Stats406 MILLION+ IS SIZE OF INDIA’S WORKFORCE81 MILLION workers are in the salaried category324 MILLION workers are mostly unskilled and selfemployed54% plus Indian workers in key sectors need reskilling by 2022, says a 2018 WEF studyLarge companies are automating plants to deal with labour scarcity and social distancing norms. Mining company Vedanta has deployed drones to keep its operations running. As customers prefer contactless transactions, retailers and dealers like Sanghi are reinventing themselves for the digital era. Work from home (WFH) is also pushing companies to equip its staff with tools for “anytime anywhere” office. MSMEs, fighting for survival, are leaning on automation tools to cut costs. Agriculture, untouched so far by technology wave, is betting on mechanisation as farmers gear up for kharif sowing.Bet on BotsAnil Rai Gupta, CMD of Havells’s India, is facing some tough choices. “With no sales, the lockdown has been a shocker,” he says. It is pushing him to ask new questions. Like, do they need so much office space? He saw many firms, which had invested in technologies, having an edge when WFH became a necessity.“This crisis has pushed us faster towards automation technologies. I see the rate of adoption exploding,” he says. Virtually every part of Havell’s operations — manufacturing, sales and after sales — is being explored for digitisation and automation. Industry 4.0 or IoT-enabled smart manufacturing will start becoming a reality, he says.Automation is being rolled out on the process side as well. Earlier, Havells’ retailer placed orders over the phone and not online. “Overnight, they have begun placing orders on the app. The transition has been seamless,” says Gupta. With a thrust on omni channel — onlineoffline booking-to-delivery model — customers can book online and take deliveries offline. The dealer training has moved to virtual classrooms where thousands of dealers are trained at a fraction of the cost. 76112085In Bengaluru, construction equipment manufacturer Tata Hitachi has rolled out e-Dost, an automation initiative to e-enable key processes. “With no revenue and fixed costs, we have said a big ‘No’ to capex-heavy investments in machines. Meanwhile, a big automation drive is happening in sales and marketing. Lockdown has given us an opportunity to do this,” says Sandeep Singh, MD, Tata Hitachi. With WFH and little travel, all meetings and processes are being digitised and automated.Earlier, warranty claims required visits by executives and products to be sent to the company. This cost time and money. The warranty claim process has now gone digital and the turnaround time has shrunk from 60 days to 30 and will further come down to 20 days by August.“We are working towards a paperless office with minimal human intervention. It will save us time, cost and people,” he says. Large companies, already in the middle of their automation journey, are shifting gears. Take Kolkata-based cigarette-tofood giant ITC Ltd. Advanced analytics, robotic process automation and industry 4.0 are already underway at ITC to boost productivity. Its sales force, enabled with smartphones, can make sales call and order capture at retail outlets. Its big data analytics engine gives recommendations to target their actions better. Productivity of salespersons have got a boost, thanks to route optimisation and geo location services.AI/ML technologies are used to forecast demand. “The use of digital solutions in distribution and manufacturing will gain momentum going forward,” says B Sumant, executive director, ITC Ltd. 76112113Even more significant is the mechanisation of India’s farm sector. “In states like Haryana and Punjab, where labour shortage is being felt, there is an acceleration towards precision farming and mechanisation,” says S Siva Kumar, head (agri and IT business), ITC Ltd. For paddy cultivation this year, states such as Telangana and Andhra Pradesh are pushing for direct seeding of rice.The technique helps save water in places reeling from water shortage. “While the equipment was available earlier, the economics did not work,” he says. Now a combination of factors, including labour shortage and government support, is enabling the transition.Worried that kharif crops will get affected, states like Punjab, Haryana, Andhra and Telangana are tapping centrally sponsored schemes and working with self-help groups and farmer producer organisations to push for farm mechanisation, he says.World of Machines Automation is, broadly, of two kinds— process and industrial automation. While industrial automation is about automating plants with machines like robots, process automation is software-driven — through bots, for instance. “The two are going through different accelerations and trajectories,” says Akhilesh Tuteja, head (risk consulting), KPMG in India. On bots, India Inc is on a par with the world in their deployment and sophistication. It has relatively lower costs and a shorter deployment time: can be built in three weeks and deployed in six. “It is on steroids in India,” says Tuteja. From ITC to kirana stores, they are using bots to cut costs, digitise business and serve customers better. “The lockdown has amplified the wave,” says Milan Sheth, executive vice-president— India, Middle East, Africa, Automation Anywhere, a robotic process automation (RPA) firm that is among the world’s fastest growing bot factories. The recent demand surge is from BFSI (banking, financial services and insurance), retail, PSUs and life sciences. Manish Bharti, president of UiPath, India and SAARC, another RPA company, too has seen demand rise since March, including from MSMEs like manufacturers of mattresses and agarbattis. “Our annual growth target is in triple digits. We have met our quarterly goals.” Tejas Goenka, MD, Tally Solutions, a homegrown accounting software company with 2 million licensed customers, is also seeing a spike in demand. From its earlier focus on GST-related compliances like billing and inventory, it is now prioritising anytime anywhere business with its mobile app. “Covid-19 is an inflection point. Customers want to use Tally for a range of things, from managing attendance to shift management,” says Goenka. There are a range of companies that offer off-the-shelf or customised bots with varying degrees of sophistication. There are three reasons why businesses are betting on automation. One is constraint-led. With WFH rolling out, companies want to deploy bots for a seamless transition to a virtual workplace, enabling better management of staff and customers. Two, thanks to a sudden business surge, companies (etailers like Big Basket) need to ramp up. The third category involves companies looking at mid- to long-term transitions and are making strategic bets around WFH and digitisation of businesses. Look at Motown and its shifting landscape. For companies like Maruti Suzuki and Hyundai, their strong dealer network had given them a huge edge. But with customers going digital, their advantage has been suddenly eroded. MG Motor and Kia Motors can compete with them overnight. This is forcing established players to reinvent themselves fast. “What was going to happen in five years is happening in one year due to the pandemic,” says Vinay Raghunath, lead (automotive practice), EY India. On digital automation maturity, India’s automakers are at 1-2.5 on a scale of 5 as against the global best of around 4. This is costly and time-consuming but companies are now preparing to move up the scale. “It’s happening in many sectors like cement, plastics, paper packaging. Everyone is rethinking,” says Raghunath. Companies like Panasonic are eyeing emerging opportunities. A leading manufacturer of industrial robots, it set up a vertical called smart factories solutions last year. This provides sensors and IoTs to make factories smart. Pilots are in the works with some tier-1 auto vendors. “For Make in India to work, our factories have to be competitive in quality and cost. The crisis has opened minds and forced people to prepare for the future,” says Manish Sharma, CEO, Panasonic India & South Asia.Season of LayoffsThe automation wave will help companies cut costs, become efficient, survive the crisis and be future-ready. This automation march is almost inevitable and has been in the works for a while. Myriad reports in the last five years have forecast job losses in the range of 42-60% in India due to automation.Yet the current swell of automation could not have come at a worse time for India’s workers. For, close to a decade, Indian economy has been reeling from one crisis after another, from rising bankruptcies to demonetisation. Even before the pandemic, unemployment was at a 45-year high, suggested a leaked NSO report last year. The lockdown has led to its precipitous decline. CMIE says unemployment rate is now at 24% and about 120 million jobs were lost in April. The future looks bleak, with the likes of S&P forecasting that Indian economy could contract by 5% in FY21.Three factors will aggravate the pain of workers. Of India’s 406 million-odd workforce, 75% are self-employed or casual workers who are hit hardest by the lockdown. As the economy bounces back and firms rewire for the digital age, many of these unskilled and illiterate workers will be unemployable.Two, MSMEs have 180 million workers. But most stand on shaky foundations. Of over 70 million enterprises in India, just 12 million are registered for GST. A majority will not survive Covid-19’s brutal assault. Finally, India’s employability crisis looms even for white-collar workers. Poor education, dated pedagogy, demand-supply mismatch and a rapidly changing business landscape mean many employees across sectors, from retailing to IT to media, will struggle to keep their jobs or find new ones.Media reports suggest massive potential job losses across sectors -14 million in auto sector, 22-51 million in MSMEs, 41 million in real estate and 10 million in textiles. In this season of brutal layoffs and pay cuts, automation by India Inc spells more trouble for workers. ” There is a strong need for social security, especially for gig and informal workers. The government is thankfully firming up a scheme that includes pension, PF and health insurance for gig workers,” says Abhiraj Singh Bhal, cofounder, Urban Company, who has worked with the government on a draft plan. In these times, there is little else Indian workers can hold on to.
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