9 min read.Updated: 20 Jul 2020, 03:07 PM ISTGoutam Das
From shop floors to software solutions, there’s talk of automation in the air. How does it affect your job?
The people displaced by automation could find it harder to make the new occupational transitions. Women, particularly, may find it tougher to upskill themselves
NEW DELHI :
On 13 July, a day before Bengaluru went into lockdown again, industrialists clamoured to make virtual representations to the state’s chief secretary among other officials. The request: factories should be allowed to operate
“It is very difficult to start, stop and then re-start," Kamal Bali, president and managing director at Volvo Group India, who was part of the calls, later told Mint. “The lockdown could be for a week but the problem is to get the supply chain back up again," he added. The company runs three plants in Bengaluru.
Karnataka eventually allowed factories to operate but the prospect of “stop-start" continues to worry industry captains. In the last one month, across the country, different manufacturers had to temporarily suspend operations as employees tested positive for covid-19.
Such disruptions have bolstered the case for more automation in Indian factories—a significant change as Indian business has always preferred cheap labour to expensive machines. Now, nearly every large and small company’s scenario planning is about doing more stuff with technology.
“Automation should meet certain goals and those goals have enhanced post the pandemic. How do we run our factories if there is another pandemic? Can I run my factory at 70% capacity through remote monitoring of processes?" Bali asked. “We need to ensure that our dependence on manual labour is gradually reduced. Our next level of investments would be more on automation than anything else," he said.
The reverse migration of labour, even though temporary, has raised alarm bells. And then, there are social distancing rules. Machines, unlike men, can ensure contact-less manufacturing. Little surprise, companies selling automation solutions have reported spikes in demand.
Robot maker Universal Robots said enquiries from fast-moving consumer goods (FMCG) companies are up by 10-15% (the medical equipment sector is understandably reporting 50% growth in enquiries) compared to pre-covid months. Milagrow HumanTech, a maker of service robots, said that unit sales of robotic vacuum cleaners jumped 400% in the June quarter compared to the same year-ago period.
On the software side, IBM cited a three to four times increase in the number of requests from mid to large companies to automate processes.
“It is very clear that the pace of automation adoption is accelerating," Anu Madgavkar, partner at McKinsey Global Institute (MGI), said. “Back-of-the-shop occupations, such as accounting, business operations, payroll processing, and HR work among others, were anyways getting automated. Now, front-of-the-shop type of occupations are getting automated faster. This includes sales and marketing and a class of occupations where knowledge and expertise is scarce," she added. As an example she cited repair work in hi-tech manufacturing, which can now be guided remotely through virtual reality.
The harsh reality is that as India presses the accelerator on automation, it would displace jobs over the short to medium term. One robot can replace three or more people.
A 2019 study by MGI found that in India, 44 million men and 12 million women were at risk of being displaced by automation by 2030. MGI chalked out different scenarios and these assumptions reflected a “mid-point" scenario. That displacement could occur much sooner with the covid-19 reset.
The automated future, while necessary, raises difficult questions. India will go through a period of painful adjustment where the workforce would need to be upskilled since tech-enabled jobs come with a higher skills bias. Considering India’s large demographic, how easy will that be? And when must India start re-tooling its workforce?
“This is a question which is up in the air. It is discussed at every industry forum, at every government interaction. People have different ways of looking at it—some cynically, some positively," Sandeep Maini, chairman at Maini Group, a diversified manufacturer, said.
“The fact is automation is the future and we have to upskill. Instead of plotting various scenarios and the timeline by when it could happen, we need to get down to the job. Covid-19 is a trigger to do things much earlier than you wanted to," he added.
The low-cost drive
Make no mistake, India already has a sprinkling of the very automated or smart factories. Multinationals and large Indian corporates have invested in greenfield plants that comply with Industry 4.0 architecture. That’s about the integration of operational technology with information technology and these factories rely on a range of cutting-edge technology such as smart sensors, collaborative robots, Internet of Things, cloud computing, human-machine interfaces, 3D printing and artificial intelligence (AI) to deliver productivity that is the best in class.
There’s GE’s precision engineering factory at Chakan near Pune, Mondelēz India’s chocolate-making facility in Andhra Pradesh’s Sri City, Bosch Ltd’s automotive products plant at Bidadi, Volvo Group’s diesel engine factory at Pithampur in Madhya Pradesh, Honda’s scooter plant at Vithalapur in Gujarat, and Lloyd’s air conditioner factory in Rajasthan’s Ghiloth, among others.
And yet, India ranks low in the pecking order of robotic adoption—11th in annual robot installations globally with under 5,000 units installed in 2018, data from the International Federation of Robotics showed. In comparison, China installed 154,000 robots and Japan 55,000.
Now, auto component makers are expected to take the lead, but higher adoption is also expected from engineering and electronics manufacturing firms. The small are unlikely to invest in Industry 4.0 technologies, which is way too capital intensive. Low-cost automation, where returns can be had within a year, could be in vogue.
Tushar Arora is the fourth generation in the family that owns Abilities India Pistons & Rings Ltd, a manufacturer whose products are used in two-wheelers. He takes this writer around his factory, in Ghaziabad. The campus has many sheds, built around a lawn and a temple. Inside the plants, employees wear both a face mask and a face shield as they work the machines.
The company started in 1968 and over the decades accumulated many machines that are no longer fancy. Older machines have now been retrofitted to bring them up to speed. “Many manual processes have been automated. Over the next few months, we will get rid of the pick-and-place activity. It is repetitive," Arora said.
“Pick and place" refers to labourers picking up components from one tray or machine and feeding it to a second machine. Abilities India is investing in a gantry, which will now automate this activity. A gantry is sort of a low-cost robot with a vertical and a linear motion. Bigger companies rely on more sophisticated robots to do the same work.
“We currently make 100 parts an hour with seven people in a line. With the new automation, we are targeting 120 parts an hour with five people. If I save two people in one shift, it is a saving of six in three shifts. Defects would go down by 50%," Arora said. “With the pandemic, people are still reluctant to come back to work. A lot of the things we had planned for the longer run has become short-term now," he added.
In one corner of Milagrow’s office in Gurugram stands RoboJulia, named after Julia Roberts, and RoboDiCaprio, named after Leonardo DiCaprio. They are humanoids—while Julia, 5.25ft tall, is a restaurant delivery robot, DiCaprio is a mobile exhibition robot that can greet visitors and guide them. Both the robots are capable of deciding their own path on a floor.
“Robotic technology has to be like human beings. Until and unless there are degrees of freedom, the robot is of no use," Rajeev Karwal, founder of Milagrow, said. “These robots form their own map. In a restaurant, the robots can decide in real time what is an obstructed area."
It’s early days—Julia, launched recently —but Karwal thinks this is the future, thanks to social distancing. For now, demand for his other service robots, like floor cleaners, is at a tipping point.
“We had given up on the B2C space (top-end floor cleaning robots are expensive and can cost ₹80,000). About 70% of the sales came from facility and hospitality management companies. Post covid, the trend has reversed. Senior citizens never bought robots earlier. Now, 25% of the demand is from senior citizens," Karwal said.
Home automation could indeed be the next frontier for robotics but as of now, in the services industry, it is software bots and AI that rule the roost.
A year ago, IFFCO-Tokio General Insurance Co. Ltd introduced an AI-based quick claim settlement tool for car claims. Using IBM’s computer vision and deep neural network-based techniques, the system figures out the extent of the damage to a car. The machine was fed with 10,000 images of damaged vehicles—the more pictures fed, the more it learns.
The company’s customers upload photos of damaged vehicles through an app. “Looking at the photographs, the tool tells us the actual list of parts that are due for repair or replacement. We have limited ourselves to 50 personal car models," Seema Gaur, executive director and head of IT at IFFCO-Tokio General Insurance Co. Ltd, said.
The company no longer requires a surveyor to make a physical visit to inspect the vehicle. “This has reduced our turnaround time. Earlier, a surveyor was engaged and the process took two-three days. With AI, we are now able to do it within minutes. The machine gives an estimate of the reimbursement and it is up to the customer to accept or reject it," she added. The firm has settled more than 10,000 claims through the AI tool thus far.
Software bots have evolved at a fast clip. In fact, bots now have a certain amount of cognitive understanding. They have also evolved from automating high-volume repetitive work, like in a BPO, to executing unique work such as claims settlement. They are in demand.
“The ability of companies to service customers is going down because employees are working from home. Those who have already invested in automation are finding it easy to respond. Those who have not are looking to automate at a faster pace," Kamal Singhani, managing partner of global business services at IBM India/South Asia, said. A robotic process automation (RPA) investment can potentially reduce cost of operations between 30% and 70%, he added.
The tough transition
There are many flavours to the nature of labour displacement. Robotic process automation eliminates the white-collar worker. Robots on the factory floor replace the blue-collar. Home automation could replace millions of “maids" India’s middle class employs as prices of cleaning robots fall.
Nonetheless, over the next decade, many new jobs are expected to be created. But those displaced could find it harder to make the new occupational transitions. Women, particularly, may find it tougher to upskill themselves for the newer opportunities, exacerbating inequities.
Sabina Dewan, president and executive director of JustJobs Network, a think tank, pointed out that white-collar workers could be better off because they have both access (to different resources) and training, whereas blue-collar workers are at a competitive disadvantage.
“There are also differences across businesses in their ability to adopt sophisticated technology, invest in training, and reap higher productivity gains, versus those that can’t afford to do so. These inequities among workers and businesses means that technology is likely to deepen the inequality in our economy; inequality is eventually bad for growth," she said.
The task ahead, for governments and corporates, is cut out. They have to shore up small businesses and workers through access to affordable technology, skilling, basic social security. And, focus on data sharing agreements.
“Governments have limited information on plans to automate which makes it hard for them to plan. Companies have a tonne of data that they keep to themselves. Data would be invaluable in helping policymakers understand the scope and scale of change and hedge for it," Dewan said.
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