Digitization of Production and Supply Chain to Enhance the Efficiency

In an exclusive interview with Indranil Chakraborty, Assistant Editor, Industry Outlook, Gulshan Kaushik, Sr. Vice President, Customer Success, Bizongo shares his insights on the Indian digital transformation market, the growth potential of small and medium manufacturing companies, importance of smart manufacturing and more.

The global digital transformation market size is expected to reach USD 1,548.9 billion by 2027 at a Compound Annual Growth Rate (CAGR) of 21.1%. How do you see this market evolving in India? What are the major factors driving the growth of this market?

In 2007, approximately four percent of the Indian population had internet access and in 2017, that number grew to 27 percent.  In last five years, that number has grown to 60 percent and by 2027, I expect that there will be one billion people who have access to the internet in India. If you empower someone with the internet, they have access to the B2C market. At present, 60 percent of the Indian population needs the visibility of what they are doing on the internet and brands will not be able to give this accessibility to the consumers until they have it. For this, the B2B market has to be more empowered in order to ensure proper visibility and as a result of this, a lot of information will be generated which can be used for demand forecasting, supply planning, and understanding the business behaviour among others. Relevant information can only be provided if you have a visibility around both the data and resources and these factors will contribute towards the growth of the digital market.

Industry digitalization is expected to develop new business models and present significant potential for small and medium-sized businesses. How can digitalization help organizations meet customer demand and corporate objectives, while remaining competitive worldwide?

B2C brands are dependent upon MSMEs to procure the products which are bought by the end-consumers. On the MSME manufacturing side, digitization has only happened at the machinery level but nobody has thought about the digital interaction between a customer and the business.

To address this gap, Bizongo has created a cloud factory, which empowers an MSME manufacturer to create more SKUs for his customer and an unmatchable supply schedule. By introducing digital methodology on the entire production process and supply chain, we can make a factory much more efficient where various stakeholders have access to relevant information so they can plan their business much more effectively.

Please elaborate on how some of the essential elements such as agile delivery methodologies, data management, enrichment, talent development, etc. help B2B companies facilitate their digital transformation.

The major allocation of resources in the MSME manufacturing market goes to: a) MSME manufacturing facility building the infrastructure which includes the purchase of the machines, building of the plant etc., b) inventory whether it is in the form of raw materials or in the form of finished goods, and c) extending the working capital which means extending the credit to the customers. The first problem is building the capacity, where having the right data will help the manufacturer to make better informed decisions. For inventory management issues, Bizongo introduced a solution called Smart Inventory Auto Replenishment which is based on the actual consumption of a product and not on sales prediction. This solution helps to ensure the optimal utilization of inventory.

Global MNCs are innovating at a faster rate than their Indian counterparts, and Indian SMEs are constantly playing catch-up to stay competitive. What kind of steps should SMEs in India take in smart manufacturing to make Indian factories smarter, more productive, and more efficient?

There are global companies who are frontrunners in digital adoption and are coming up with smarter solutions. Businesses should produce things that the customers want and then, if you are able to create a visibility around it, that is the smartest way of managing any manufacturing facility. Platforms which enable the MSME ecosystem to have that information, and help them manufacture smartly is what is required in the Indian market. Also, these platforms which enable factories to manage that information should do a lot of research, and they should make that data visible. This will help the manufacturers utilize their working capital much more efficiently. We at Bizongo have developed a Cloud factory which helps people understand how a factory should operate depending upon the capacity and unused capacity, and on the order history to help improve their manufacturing operations.

Customers wish for personalized products but do not want to pay more than they would for mass-produced items. Hence, manufacturing must be more versatile than ever before, focusing on customized mass production. How can manufacturers address these issues?

I am someone who is a great fan of frameworks and in this case, I will take the help of a digital solution. Then, I will create a framework that shows my open book cost which my customers can see.This can help them better understand all the different costs that I incur during the manufacturing process. In a different approach, I will calculate the additional cost as well as the depreciation of my machineries caused by the customization. Then, using a cost modelling tool or platform, I will be able to let the customer know the updated cost. Both these methods improve the transparency between the manufacturer and the customer, which helps avoid unnecessary confusions and conflicts.