Evolving Manufacturing Facilities in the ERA of INDUSTRY 4.0 and beyond

The manufacturing facilities in India have been witnessing a profound transformation, thanks to technological advancements, shifting market dynamics and a growing emphasis on sustainability. They have come a long way since the first industrial revolution, evolving through mechanisation, mass production, and the digital transformation of Industry 3.0. Today, we stand on the brink of Industry 4.0, led by technologies such as artificial intelligence (AI), machine learning (ML), the internet of things (IoT) and robotics.

Industry 4.0 integrates cyber-physical systems, cloud computing and data analytics to create smart factories where machines and systems communicate, optimise production processes and operate with minimal human intervention. Flexibility, efficiency and adaptability are at the core of these changes. 

In smart manufacturing, flexibility and design are the key. In India, manufacturing facility design is evolving rapidly. Earlier, factories were built with fixed assembly lines and rigid processes to handle high-volume production of limited products. Today, the focus has shifted towards modular, flexible layouts that allow manufacturers to pivot production lines quickly. AI and predictive analytics enable factories to optimise energy use, minimise downtime, and enhance overall efficiency, while digital twins (virtual replicas of physical systems) are increasingly used to simulate different scenarios and fine-tune operations in real-time.

The future of manufacturing does not require just advanced technologies but also flexible and efficient factory designs that can adapt to rapid changes in market demand, technology, and workforce dynamics. Flexibility is key to ensuring that manufacturers can pivot quickly in the face of disruptions—whether due to supply chain challenges, new technological requirements, shifting consumer preferences or any other reasons.

Experts predict that reconfigurable manufacturing systems will dominate the landscape of future factories. This approach allows facilities to be modified and adjusted without significant investment in new infrastructure, enabling companies to respond to new product lines, emerging technologies, or disruptions in the supply chain.

India is rapidly positioning itself as a global manufacturing hub by embracing Industry 4.0 technologies. The ‘Make in India’ initiative, combined with the government’s Production-Linked Incentive (PLI) scheme, has driven investment in the country’s manufacturing sector.

According to NASSCOM’s Industry 4.0 report, India is set to increase its manufacturing spending on digital technologies to 40% by 2025, up from 20% in 2021. With sectors like automotive, pharmaceuticals, and consumer durables leading the charge, India’s transition toward smart factories is well underway. 

However, India still faces challenges in scaling up compared to leading manufacturing giants like China, Germany and Japan. Germany’s Industry 4.0, Japan’s Society 5.0, and China’s ‘Made in China 2025’ are setting high benchmarks, emphasising fully automated, AI-driven production facilities.

India’s trajectory, though promising, still requires significant infrastructure improvements and technology adoption to compete fully with these global leaders. Yet, experts believe that India’s large and skilled workforce, burgeoning tech ecosystem, growing domestic market and proactive government policies will help the country catch up with these manufacturing giants quickly.

Key reforms such as the Make in India initiative, the Production Linked Incentives (PLI) scheme, the Goods and Services Tax (GST), the Unified Payments Interface (UPI), the Real Estate Regulatory Authority (RERA), the Insolvency and Bankruptcy Code (IBC), and the China + 1 strategy in the past one decade have paid dividends and together laid a foundation for India’s robust and competitive manufacturing sector.

According to Deloitte’s ‘Global Manufacturing Competitiveness Index,’ India is expected to become the fifth most competitive manufacturing country in the world by 2025. India recently became the sixth-largest manufacturing economy, as per wealth management firm Nuvama. However, to maintain its momentum, India must continue to invest in modernising its manufacturing facilities and embracing emerging technologies.  

Industry experts believe that India’s manufacturing landscape is evolving to become more resilient and globally competitive. As per Deloitte, the rapid pace of AI adoption and smart manufacturing initiatives in India could make the country a global manufacturing leader within the next decade. Experts also point to the country’s strong talent pool in data science, AI, and robotics, which will play a critical role in driving this transformation.

Furthermore, the World Economic Forum’s Future of Jobs Report 2023 highlights that the Indian manufacturing sector is undergoing a massive shift toward digitalisation. The sector’s rapid transition toward AI-powered smart factories will help India stay competitive on the global stage, while also creating new opportunities for high-skilled labour.

As India embraces the future of manufacturing, the country is poised to emerge as a global manufacturing giant. The transition to smart, flexible, and efficient manufacturing facilities is well underway, and initiatives like the PLI scheme and ‘Make in India’ are paving the way for India to compete with advanced manufacturing nations. While challenges remain in terms of infrastructure and technology integration, the future is bright for India’s manufacturing sector. 

Hitesh Agarwal
Chief Operating Officer (COO), Action Construction Equipment  (ACE)