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India’s discrete
Digital transformation priorities manufacturing
of India’s discrete manufacturing SMEs

SMEs – a conceptual study in

perspective of Industry 4.0 289
Gautam Dutta, Ravinder Kumar and Rahul Sindhwani Received 2 March 2019
Revised 17 May 2019
Department of Mechanical Engineering, Amity University, Noida, India, and 28 July 2019
Accepted 13 August 2019
Rajesh Kumar Singh
Department of Operations Research, Management Development Institute,
Gurgaon, India

Abstract
Purpose – Manufacturing excellence is critical to our nation’s economy. Indian Government’s National
Manufacturing Policy, drafted in 2011, is being revamped to include the aspects of Industry 4.0. Initiatives,
both led and assisted by government and industries, are being launched to catalyze and transform India’s
manufacturing competencies. This paper aims to study the functional areas which can potentially leverage
Industry 4.0 technologies and help India’s manufacturing establishments to transform. It does so in context of
the aspirations of India’s small and medium discrete manufacturing establishments (SMME) towards
adopting digital technologies for the identified functional areas. The study draws its context from the relevant
literature review intended to examine the academic articles published until the end of September 2018,
followed by a maturity assessment survey of Indian SMMEs to establish priority areas
Design/methodology/approach – The literature survey has been complemented with a maturity
survey of more than 250 of Indian SMMEs to establish adoption gaps by comparing proficiency and
sophistication of their present status and proposed adoption aspirations by 2020. The assessment of the
organizational aspirations and gap areas identified is expected to indicate which of the Industry 4.0 elements
can be adopted by them.
Findings – The maturity survey undertaken throws up several insights – Indian SMME community’s self-
assessment indicates operational measurements followed by manufacturing and design interventions as the
aspired transformation cycle. The survey indicates that manufacturers would like to make changes to their
design and manufacturing strategies based on performance metrics; therefore, they need to first capture real-
time machine data, analyze and then incorporate the resulting improvements in manufacturing and design
decisions in that order.
Research limitations/implications – The maturity assessment method itself is in evolution stage, and
future correlations with benefits will strengthen observations. Industry 4.0 being relatively new initiative for
India, availability of country-specific academic literature is limited. The maturity assessment survey
undertaken across organizations of North, West and South India therefore carries the risk of not reflecting the
views of a wider population. The current maturity, or the lack of it, of proficiency and readiness of India’s
SMMEs with respect to digital technologies may also be a barrier to self-examine.
Practical implications – This research is expected to provide insight into priorities to be adopted for
digital-centric transformation by Indian SMMEs. It is expected to facilitate policymakers and influencers from

Authors would like to convey their sincere appreciation to all the peers who have reviewed this paper Competitiveness Review: An
and given their recommendations and valuable suggestions, most of which have been incorporated. International Business Journal
Authors would also like to declare that the acronym SMME has been used for “small and medium
Vol. 30 No. 3, 2020
pp. 289-314
discrete manufacturing establishments” to differentiate it from more commonly used acronym of © Emerald Publishing Limited
1059-5422
SME which more commonly refers to “small and medium enterprises”. DOI 10.1108/CR-03-2019-0031
CR government and industry to help frame policies that facilitate the adoption of digital technologies by Indian
SMMEs and facilitate India’s technical education community to adopt skill development programs to support
30,3 industry. It is expected to provide guidance to India’s academic institutions to rejig their curriculums to help
bridge the critical skills gap that exists between newly inducted engineering professionals and industry.
Social implications – Digitalization is expected to foster lean and therefore support sustainability
initiatives. Digitalization is expected to help create new, alternative sources of employment which are more
relevant to emerging times and foster unlearning the past and relearning of new skills. This emerging
290 diversity of engineering applications resulting from digitalization is expected to also support the larger and
poorer agricultural community of India and help the sector to become more efficient and productive, which in
turn will reduce economic alienation of a large section of Indian society.
Originality/value – Industry 4.0 has been identified as the transformational initiative for India’s
manufacturing competitiveness. Indian manufacturing sector needs to urgently implement the digital
technologies and improve their performance and remain relevant in this dynamic market. This research will
help guide them to frame their respective digital strategies and be successful. This research will help
government and industry influencers to plan and execute their interventions.
Keywords Integration, SME, Manufacturing, Industry 4.0, Digitalization, IoT, Digital,
Transformation, Performance, Design
Paper type Conceptual paper

1. Introduction
Manufacturing competitiveness has been recognized as a critical success factor for
sustained growth of India’s economy (Iyer, 2018). Manufacturing is considered a force
multiplier as investments in manufacturing yield multiple times effect on GDP growth.
Manufacturing competitiveness is imperative for achieving a balanced growth of the
economy, because not only does it foster growth, productivity and employment, it also
strengthens the other sectors of agriculture and services. Sustained annual growth target of
more than 12 per cent, as envisaged in FY2018 by India’s manufacturing sector, is expected
to improve the sector’s contribution to India’s GDP to 25 per cent by 2022 (DIPP, 2018; Iyer,
2018). It is expected that this growth expectation, fueled by government initiatives and
investments along with an aggressive play by Indian private enterprises will attract global
manufacturing organizations to intensify their presence in the country and foster
competitiveness.
Currently services sector is the backbone of the Indian economy and contributing around
53 per cent of the Indian GDP. Manufacturing and services have been traditionally
considered as independent economic activities, but servitization as a business strategy
suggests that there are potential synergies between manufacturing and services to enhance
both organizational competitiveness and consumer satisfaction (Vendrell-Herrero and
Wilson, 2017). Key to improvement of India’s manufacturing sector is to transit to more
innovation-intensive and unique business models based on services that will sustain their
competitiveness in the medium and long term, globally. This is possible by significantly
enhancing contribution of its small and medium manufacturing establishments (SMME).
Indian SMMEs contribute about 45 per cent of the national industrial output as well as 40
per cent of the total exports, and they form 95 per cent of the total industrial units
manufacturing around 8,000 quality products for the Indian as well as international markets
(IBEF, 2018). If Indian SMMEs envisage to claim its share of the growth market, they need
to establish innovative, service-centric business models with global standards to grow their
respective business interests. To achieve these new business models and global standards,
Indian manufacturing establishments, especially SMMEs (Moeuf et al., 2018) need to
transform to achieve manufacturing excellence and to improve their global competitiveness
(Marsh, 2012). One of the ways to kick-start this transformation is by adopting Industry 4.0 India’s discrete
digital technologies. This in turn would mean improving its key parameters of flexibility, manufacturing
efficiency, productivity and quality while establishing the critical need of security in the
SMEs
digital operational era.
Whereas it is the promise of Industry 4.0 methodologies and its underlying digital
technologies that its adoption will make a level playing field for all, with minimal
dependence on economies of scale and size of operations, Indian SMMEs need to learn to
harness the power of digitalization and industry 4.0 technologies (E&Y, 2018). Considering
291
the impact of transformation, there are nine key elements that constitute the cornerstones of
Industry 4.0 (Vaidya et al., 2018) – industrial Internet of Things (IIoT), Big Data Analytics
(Big Data), autonomous robots, digital simulation (Simulation),s integration, cyber physical
systems (CPS), cloud computing (Cloud), additive manufacturing (AM) and augmented
reality (AR). Interactions with the cross section of Indian SMMEs highlight their need to
understand how the adoption of digital technologies can be translated into business value.
Indian SMMEs aspire to understand the impact of digitalization and resulting
disruptions of their current processes (Ehret and Wirtz, 2017) and prioritize its adoption,
especially wherever it results in easily reaped benefits. It is imperative therefore, that studies
are undertaken, insights developed and correlations established between implementation of
digital, disruptive technologies constituting Industry 4.0 and its key business drivers. While
many of the emerging Industry 4.0 technologies and tools can be applied in large companies,
this may not apply for small and medium establishments (Matt et al., 2018). The SMMEs
need to identify and prioritize organizational functions based on its corresponding impact
potential in the form of achievable business benefits. There is a need to establish relevance
and interplay of the Industry 4.0 elements, assess organizational adoption maturity, identify
the largest gap areas and establish adoption priorities. These insights, thus established, can
assist Indian SMMEs to implement, test the results, continuously fine tune their adoptions
and progress towards transforming and achieving excellence.
From the perspective of Indian manufacturing industry in general and particularly
SMMEs, Industry 4.0 has huge implications. Higher productivity will be the key to generate
new jobs for the growing pool of well-educated, 300 million people expected to enter India’s
workforce over the next 20 years (McKinsey, 2018). One of the significant advantages of
Industry 4.0 is that it does not require big capital investments as compared to the third
industrial revolution when traditional tooling was replaced by special purpose machines
and automation equipment. Now, the manufacturing establishments can retrofit their
existing infrastructure with CPS at much lower costs and take advantage of the digital
technologies such as simulation, IoT, big data, and robotics. Thus, manufacturers can
achieve significant productivity gains with modest investments. Moreover, these gains are
not one-time, the resulting integration between various business assets and processes help
information availability across entire value chain, facilitating timely and accurate decision-
making. IoT-based feedback loops provide crucial insights, helping continuous optimization
of processes resulting in sustainable, lean practices. For academia too, Industry 4.0 offers an
opportunity to forge a mutually beneficial association with industries. Industries would
need large numbers of manpower, skilled in the new-age competencies, and academia can
enhance its curriculum to help bridge the skill gaps and generate workforce that is more
employable and productive. Industry would need to retrofit older generation machines with
IoT devices, last-mile solutions to integrate processes, cloud-based applications to convert
data to analytics and academia can offer to deliver these solutions by taking up time-bound,
objective-driven industrial projects.
CR This paper intends to establish how India’s SMMEs can prioritize the digitalization
30,3 elements of Industry 4.0 and its relationship with various transformational measures such
as improved quality, efficiency, productivity and flexibility. The initial challenge of SMMEs
is to understand what Industry 4.0 is, and how these new technologies can improve things,
therefore, the effort started with a series of awareness building Industry 4.0 workshops, held
at multiple locations across India. The interactions helped the SMMEs to organize their
292 ideas and needs regarding Industry 4.0 and this was followed by a maturity assessment that
provided the basis of identified gaps and potential analysis (Matt et al., 2018), leading to the
observations and recommendations made in this paper.
The current section of this paper, under the heading of introduction, establishes the need
and objective of the study. Section 2, under the heading of literature review, describes the
study of the past research papers undertaken to establish the contextual understanding of
the elements of Industry 4.0. Based on the literature review, Section 2 also summarizes the
benefits of Industry 4.0 implementation and the key gaps observed from the literature
review. Section 3 describes the six steps of the research methodology established for
the current study. Section 4 elaborates on the study results, its analysis and discusses the
implications, resultant priorities and actions proposed. Section 5 summarizes the conclusion
of the current study and future scope of work.

2. Literature review
By adopting Industry 4.0, India’s SMMEs expect to enhance operational efficiency and
productivity, as well as improve their agility to fulfill diverse needs of global customers by
leveraging higher levels of automation. The five major impact areas of implementation of
Industry 4.0 (Posada et al., 2015, Roblek et al., 2016) are digitization, optimization and
customization of production; automation and adaptation; human–machine interaction;
value-added services; and automatic data exchange and communication. These areas are
strongly dependent on internet technologies and therefore are very dynamic (Lu, 2017).
Considering the disruptive nature of emerging technologies and rapid developments, a
literature review was undertaken to establish a contextual understanding of the Industry 4.0
digital technologies, its coexistence, interplay and usage in a manufacturing establishment.
Past studies of SMMEs in Germany, where concepts and constituents of Industry 4.0
were originally conceived, show that there is a direct correlation between size of
manufacturing establishment and adoption and implementation of Industry 4.0. Large
enterprises tend to be better prepared than small enterprises to accept introduction of
disruptive technologies and resulting new processes. The risks and obstacles of major
transformation is the primary reason to reduce SMME’s readiness and slow down the
adoption (Sommer, 2015). This means that the preparations for Industry 4.0 implementation
at SMMEs should address issues such as reduce insecurities regarding investment by
ensuring short-term benefits, target benefits to be more at reality level than vision level,
frequent internal staff qualification programs thus improving usage and acceptance and
define an SMME specific adoption framework.
The intent of the literature review is to establish the relationship between adoption of
Industry 4.0 technologies and its corresponding intended benefits. The benefits thus
established are expected to be the success criteria or KPIs for the Indian SMMEs to adopt
when they embark upon the transformational initiatives. The objective of this literature
review also is to capture the recent trends of manufacturing in Indian SMMEs as well as
better contextualizing the research specifically for India. This will help in establishing how
India’s SMMEs can adopt Industry 4.0 and benefit from its constituent disruptive
technologies.
2.1 Relevance of the Industry 4.0 technologies for India’s Small and Medium Discrete India’s discrete
Manufacturing Establishments manufacturing
The following sub-sections elucidate the summary of literature review undertaken to
establish the constituents and relevance of Industry 4.0 for manufacturing sector in general
SMEs
and especially for India’s SMMEs and impact on their aspirations to transform to perform
better under the changing environment of global competitiveness.
Academic research literature studies regarding the nine elements that are considered as
the cornerstones of Industry 4.0 (Vaidya et al., 2018) were reviewed. Focus was on the 293
benefits of adoption for Indian SMMEs. Research literature related to India’s manufacturing
sector was also perused to capture the Indian context.
2.1.1 System integration. Most SMMEs fulfill their business aspirations using stand-
alone functions and equipment. The technological core of digitalization demands that
functional processes, such as design; analysis and test; scheduling; manufacturing;
quality; maintenance; equipment – such as machines and robots – and tools and business
applications – such as ERP, product lifecycle management (PLM), CRM, be connected.
Digitalization facilitates sharing of data and information which can in turn help
stakeholders take effective decisions. System integration has the potential to transform
manufacturing from largely stand-alone activities towards connected and integrated
systems.
System integration suggests technology-based infrastructure creation that is unique to
an establishment based on the constituent systems, IT infrastructure, processes adopted,
business objectives and expected deliverables. Integration is a major mechanism used in
manufacturing organizations. The paradigm of Industry 4.0 is essentially outlined by three
dimensions of integration (Vaidya et al., 2018; Lu, 2017):
(1) Dimension 1: Horizontal Integration across the value creation network
Horizontal value creation network essentially consists of inbound logistics for
ordered raw material or sub-assemblies, supplier strategies, manufacturing
operations, outbound logistics including warehouse strategies and dealer
management, marketing and sales (Vijayan et al., 2016). Supply chain design
decisions related to inventory management, transportation, operations, and
information flow is part of this value creation network.
(2) Dimension 2: Vertical Integration and networked manufacturing systems
A typical manufacturing shop is equipped with variety of machines, whereas
most new generation machine tools are IoT ready, to be able to transmit
operational data from the traditional machines, they need to be retrofitted with
sensors or actuators. SMMEs, therefore, need to implement IoT-ready devices
on the older generation machines which is most likely the case. These devices –
such as sensors, actuators, power supply and drive systems – constitute the
first layer which transmits the operational data related to both the workpiece
and the production machines. These field devices in turn are managed by the
control layer which includes automation management function. The entire
manufacturing setup thus is vertically integrated to operations management
layer which comprises of supervisory control and data acquisition (SCADA)
system for gathering and analyzing real-time data for monitoring and control
as well as energy management system (Thoben et al., 2017) for monitoring and
optimizing the energy spend.
(3) Dimension 3: End-to-end integration across the entire product life cycle systems
A product, during its entire life-cycle from conception to end-of-life (Peñaranda
et al., 2010), goes through several design changes. The design changes may get
CR initiated by market feedback or product performance improvement drive. The
30,3 design changes may result in changes in component designs, assembly, material,
procurement source or manufacturing strategy. The change in manufacturing
strategy may need changes in its tooling, programing or automation. If the design
and manufacturing strategy goes through many changes through the product life
cycle, so does its production sequence and schedules, quality norms,
294 documentation and post-sales service content, warranty and spares.
The end-to-end integration of this value chain necessitated the need to define an
integrated PLM system. And when this value chain is integrated and digitalized, a
digital version of the virtual product and processes comes into being and this is
termed as the “digital twin” – of product, of production and of performance. Using
a digital twin, the entire product development process can be created in the virtual
world to simulate, test and optimize products and production without real-world
prototypes or wasting real resources (Tao et al., 2018).
2.1.2 Internet of things. In context of industry, internet of things (IoT) is already making
substantial headway in revolutionizing industry. It is combining the global reach of the
internet with industrial capabilities to control, coordinate and manage the physical world of
goods, machines, factories and infrastructure, in a way that has started to impact existing
industries, value chains and business models (Ng and Wakenshaw, 2017).
Existing Indian SMMEs, which are already in operation (Condry and Nelson, 2016), can
commission smart edge IoT devices to control, coordinate and manage various machines
and factory infrastructure, while still maintaining a migration path for future compatibility.
The foundation blocks for this architecture are organized in four different areas: sensors and
actuators at the IoT edge, gateways for data aggregation and edge analytics, cloud for
storage and/or connectivity and data consolidation and analytics applications.
Indian manufacturing establishments will have to plan for IoT implementation (Mourtzis
et al., 2016) in all the three integration dimensions (refer section 2.1.1) in horizontal
dimension for IoT supported Logistics and Supply Chain, in vertical dimension for IoT
ready field devices seamlessly transmitting data to manufacturing execution system (MES),
energy management system (EMS), quality management system (QMS), SCADA and cloud-
based analytics and in product life cycle dimension for IoT ready machines to provide
closed-loop feedback to and for engineering automation (PLC and CNC controllers) devices
and service-centric sensors.
2.1.3 Big Data. The consensual definition of Big Data narrates how we can leverage “data
sets whose size is beyond the ability of commonly used tools to process it within acceptable
time”. As described by Gartner information technology research and advisory company
(Gartner, 2018), Big Data is characterized by three Vs: volume, velocity and variety. All the
Vs are growing exponentially, the data is being generated from an ever-widening array of
sources, channels and sensors and in wide-variety of formats, therefore, the need is to get the
data processed quickly, so that we can be responsive as the events occur.
Big Data and analytics consultants believe that SMMEs need to consider Big Data to
gain competitive edge and achieve growth. They can address this by analyzing their track
record of performance in context of market data before others do and uncover new insights
(MacInnes, 2013; Simons, 2013; Preez, 2014). According to the data presented in 2012 (Sen
et al., 2016), 30.6 per cent of SMMEs are introducing product or process innovations, 28.68
per cent are innovating in-house, 10.32 per cent of the SMMEs are collaborating with others
to become innovative, 12.4 per cent SMMEs are selling new-to-market, 14.61 per cent are
selling online and 22.01 per cent are purchasing online. This data suggests that India’s
SMMEs have a potential to contribute significantly and when they generate and manage
more transactions in digital form, they can assimilate more accurate and deeper India’s discrete
performance information on everything from product improvement to manufacturing manufacturing
insights, and therefore, practice flexibility and improve gains. Big data allows granular
segmentation of customer engagements and therefore can help achieve more precisely
SMEs
customized products and services.
Most often, IoT, cloud and data analytics go together (Yang et al., 2017). IoT devices
generate data, Big Data analytics platform available on the cloud as PaaS, helps process the
data and actionable information is looped back to intelligent systems on the ground to learn 295
from. The resulting insights help us to take more informed decisions across the business
functions such as, design, manufacturing, automation, services, and supply chain. Together,
IoT, Cloud and Big Data provide a solution which is both scalable and accommodating.
2.1.4 Cloud computing. Indian SMMEs can leverage advanced analytics at the edge and
in the cloud to help better manage variability – specially to address mass customization
business needs (Bauer, 2018). Variability can be in terms of size and type of IT
infrastructure, applications or usage, Indian SMMEs can use cloud-based solutions and
services to benefit both their own operations and those of their industrial customers to
improve service efficiencies while lowering warranty costs with condition-based, predictive
maintenance (Mourtzis et al., 2017) and cloud-enabled remote diagnostics that can reduce or
eliminate technician visits. SMMEs can work on developing enhanced product features and
capabilities through real-time performance data to R&D groups as actionable information to
align product design and virtual digital twins with actual product performance. SMMEs can
offer added services, such as monitoring performance to generate incremental, high-margin
service revenues to build the bottom-line profitability
There are three popular cloud-based service models (Yang et al., 2017) – software as a
service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS). India’s
SMMEs can reduce their capital expenditure by adopting cloud computing for SaaS and
IaaS for their software application and computing needs. Most of these offerings are now
available under “pay as you use” subscription models.
2.1.5 Autonomous robots. Autonomous robots perform actions based on their own
decisions (Qin et al., 2016). An Autonomous robot can be programmed to respond in a
certain manner and based on its environment and surrounding operational dynamics, it
makes decisions to identify, comprehend and then actuate a motor-controlled maneuver
within that environment. In Industry 4.0 environment, autonomous robots and humans are
expected to collaborate and cooperate to execute a complex task more efficiently and
accurately, with interlinking tasks and using smart sensor human-machine interfaces
Autonomous robots have an emerging role to play for Indian SMMEs adopting
digitalization. India’s SMMEs are expected to move up the value chain and deliver smarter,
customized products more efficiently. Autonomous robots could now be deployed for
complex assembly operations which require precision and consistency (Makris et al., 2012).
Autonomous robots introduce 100 per cent flexibility to the operational capability as it can
be reprogrammed to execute totally new operation for a different product on the shop floor.
Therefore, Autonomous robots could be considered as one of the disruptive technologies to
be harnessed for mass customization where all the products being manufactured on the
SMME shop-floor are unique and different from each other.
2.1.6 Simulation. There are several functions connected with product development and
manufacturing which can benefit from the emerging science of simulation. There are two
broad types of innovations that can be targeted by a typical discrete manufacturing
companies, namely, new product development and improvements for existing products. In
both the cases, improving upon the incumbent and reducing the risk of failure is a key to
CR successful innovation, and that most likely leads to growth in revenue. The goal of digital
30,3 simulation is to facilitate successful innovation in both these areas by making it possible for
designers and engineers to quickly review and evaluate design alternatives with live data.
And this is made possible by simulations – simulation of the design alternative and
associated performance (Thomke and Fujimoto, 2000), thus facilitating validation against
the design parameters as well as, (b) simulation of manufacturing processes (Mourtzis et al.,
296 2013) to validate the operation sequence, resources, manufacturing process, human
operations and quality.
2.1.7 Cyber physical systems. Products that communicate with each other are referred to
as CPS (Thoben et al., 2017). Indian manufacturing establishments need to rethink their
product development and manufacturing strategies as more and more products, its
constituent systems and sub-systems will adopt IoT (Kang et al., 2016). Such products
will carry more electronics and software along with the conventional mechanical and
electrical components. The development and use of these new systems will bring a range of
consequences, such as interdisciplinary and integrated product development, and a
rethinking of current design methods, processes, IT solutions and organizational forms. It
will also lead to a demand for continuous process chains based on digital models in product
development, production planning, manufacturing and service.
Products that communicate with each other through internet or cyberspace are referred
to as CPS. Another element of Industry 4.0 co-exists with CPS is the IoT. This concept often
forms the basis for internet of services (IoS). The increasing integration of information and
communication technology in products, together with the addition of services, is causing a
revolutionary change. This is known as smart engineering (Kang et al., 2016), which refers
to new methods, processes and IT tool chains for the product development process.
2.1.8 Augmented reality. Unlike VR, which requires users to experience a totally virtual
environment, (Syberfeldt et al., 2014), augmented reality (AR) uses actual work environment
as the context and overlays critical digital information on top of it. The overlay information is
visually experienced most times in a headset worn by the user, thus providing a coexisting
virtual and real, immersive environment. In such an environment, AR users experience an
improved natural world where virtual information is used as the value-added assistance to
operational areas. AR is an enhanced version of reality where direct or indirect views of
physical real-world environments are augmented with superimposed computer-generated
images over a user’s view of the real-world, thus enhancing one’s current perception of reality.
Therefore, in the smart manufacturing establishments including SMMEs, once the
physical production line is established, shop-floor workers can use AR techniques to guide
them through the production processes, overlay process animations of the next production
step on the real part or product and validate that workers executed the process correctly. AR
is expected to have impact on how onsite maintenance tasks are executed where VR ready
devices can be used to overlay realistic digital references of components, assemblies and
sub-assemblies and their maintenance routines.
2.1.9 Additive manufacturing. Additive manufacturing (AM), where material is
deposited or added rather than cut or subtracted to get the desired component or part, is
expected to revolutionize conventional manufacturing. Fast deposition technology and
material breakthroughs are resulting in new machines which are rapidly elevating additive
manufacturing technology from prototyping status to mainstream production.
For India’s SMMEs, AM can be incorporated into their mainstream product development
and production operations to realize the next level of product, manufacturing and business
performance. Today’s conventional manufacturing processes such as machining, molding,
casting and forging, constrain a part’s shape and strength, increase the amount of material
and weight and limit the product’s performance. AM has the potential to be the alternative, India’s discrete
viable transformation technology for the SMMEs (Marzi et al., 2018). This technology has manufacturing
proven its effectiveness in the areas where it is required to manufacture complex objects by
impacting the cost of production, especially to transform a small-scale production into a large-
SMEs
scale one. Along with the low cost of adoption of AM compared to tooling route, SMMEs can
become more competitive on two aspects – first is the ability to have access to global markets
by expanding the range of offered goods, and second, and perhaps more important, concerns
managing technological complexities of design and corresponding manufacturing processes. 297

2.2 Benefits envisaged by India’s small and medium discrete manufacturing establishments
on adoption of Industry 4.0 digital technologies
Customer requirements are becoming more diverse and the products which fulfill those
requirements are becoming smarter and more complex. This requires manufacturing
companies to be more agile to respond to the market dynamics, flexible to develop
customized world class products, innovative and price competitive and delivered anywhere
in the world. This environment is exceptionally challenging for an Indian SMME (Iyer, 2018).
Digitalization and adoption of Industry 4.0 is expected to enable SMMEs integrate their
processes from design to production, help simulate and validate alternative product designs
and manufacturing processes so that they can select the most optimal and efficient
parameters. Digitalization enables quick changeover between small batches of customized
products, efficiently consuming manufacturing capacity to produce “first-time-right”, high-
quality output (Fatorachian and Kazemi, 2018). Automation supported by IoT-ready
infrastructure is expected to generate crucial operational data that provides insights
facilitating optimization and improvements.
Indian SMME’s are in the process of comprehending and evaluating the Industry 4.0
digital technologies and prioritizing them based on the resulting business values. Reducing
time-to-market (PwC Report, 2014) or delivering on time is one of the critical benefits SMMEs
are looking to achieve faced with faster-changing consumer demands. To gain market share,
Indian SMMEs, therefore, need to launch products faster, despite rising product complexity.
Traditionally, the big competitor has beaten the small one but now the fast and innovative is
beating the slow and conventional. Indian SMMEs are adopting digital technologies to be
able to incorporate last-minute changes and rapidly transfer customer requirements into
production processes (Fatorachian and Kazemi, 2018) thus reducing the time taken to design
and manufacture and yet meet the dynamic market demands.
In the age of mass customization, the need is of individualized products but produced at
the same cost of mass-produced goods. As a result, designs need to be flexible,
manufacturing needs to respond to the small batches of many more flexible designs (PwC
Report, 2014). This flexibility in the entire value chain with dynamic configuration of various
elements of business processes provides the capability of mass customization (Fatorachian
and Kazemi, 2018). Responsiveness improves when decisions are taken on-time, verified and
incorporated into engineering and production processes. This agility is a result of
implementing system integration and simulation, two of the key Industry 4.0 elements.
India’s SMMEs need to compete with global players, and that means striving for global
quality standards (PwC Report, 2014). To ensure high product quality, traceability and to
fulfill stringent regulatory requirements, SMMEs need to adopt close-loop quality processes
that include testing for verification w.r.t. product specifications. Process integration, IoT
ready inspection devices, cloud and big data applications combine to help establish close-
loop quality processes encompassing entire value chain from planning, manufacturing,
inspection to optimization by data analytics (Wang et al., 2018).
CR Implementation of Industry 4.0 can help SMMEs secure significant efficiency gains and cost
30,3 savings, and many anticipate that these will be accompanied by additional revenues of the
same magnitude (PwC Survey, 2016). Cost savings can be attributed to modular, flexible and
customer-tailored production concepts whereas additional revenue can come from new digital
products, services and solutions. Data analytics can help Indian SMMEs adopt predictive
maintenance framework for its key assets to optimize maintenance and repair schedules and
298 improve asset availability (Fatorachian and Kazemi, 2018). Data analytics can also help capture
high-margin business through improved customer insights (Arnold et al., 2016). Vertical
integration from IoT-ready field devices to operations management and energy management
systems (EMS), as explained in Section 2.1.1, help improve machine utilization, achieve higher
energy efficiencies and faster throughput whereas horizontal integration helps track and trace
products and raw material for better inventory management and efficient logistics. System
integration, digitization and automation of processes fosters smarter use of human capital and
achieve higher operational efficiencies. Real time, end-to-end design to manufacturing planning
and team collaboration helps in achieving execution efficiencies and higher productivity.

2.3 Key gaps observed from the literature review

The contexts established in the previous sections help conceptualize Industry 4.0 in relevance
to India’s SMMEs. However, it was observed that most of the past studies focus on the isolated
capabilities of the innovative technologies that are available for product and process
definition, validation, interfacing, data generation, data exchange, i.e. in general focusing more
on the IT representation of the technology in question. In a collective way, it converges the
emerging trends and suggests a new global perspective on smart manufacturing (Cimini et al.,
2017) but does not provide a way forward for SMMEs to plan and execute a prioritized
implementation of the Industry 4.0 technologies. SMMEs need to understand how to develop a
holistic view of digitalized value chain for their businesses and at the same time, identify their
priority areas where Industry 4.0 technologies can be adopted to achieve transformation, thus
one of the key gaps observed from the literature review is the inadequacy of insights available
for prioritizing industry 4.0 elements for implementation.
It is important to recognize that every SMME is unique, based on its business, prevalent
industry drivers and the organizational values it intends to establish and sustain. From this
point of view, to implement smart manufacturing practices, especially for an SMME, it is
necessary to first establish organizational readiness based on its current maturity levels,
identify its specific process transformation needs followed by priorities based on most
impactable areas of implementation. Thereafter, the functional interfaces need to be
identified for the priority areas clearly defining the communication protocols between
the identified functions. Appropriate metrics in the form of KPIs need to be established
while implementing identified Industry 4.0 initiatives for the priority functions to ensure
realizing success. This approach will guarantee continued appetite for investment with a
longer-term intent to establish complete digital value chain in the organization. While there
are several studies relating Industry 4.0 and its business benefits, there is lack of insights
regarding the transformation journey per se, starting with readiness, selection of the short-
term goals and the continuous monitoring and actions. Therefore, another key gap observed
from the literature review is the lack of research insights of the transformation journey and
the dynamic perspective of benefits accrued during such a journey.
As described in Section 2.2, the benefits expected by SMMEs from implementation of
Industry 4.0 elements suggest an integrated approach towards leveraging emerging
technologies. In the least, it points towards defining and implementing smaller threads of
functional integration while keeping the end-to-end organizational value chain in
perspective. For example, while system integration means three dimensions of integration India’s discrete
as explained in Section 2.1.1, that are required to be established for a cross functional and manufacturing
collaborative infrastructure of an SMME, literature review exposes gaps in understanding
the dependencies of the rest of the Industry 4.0 digital technologies which need to be
SMEs
included for implementation to attain specific business benefits. It is not about plugging
technologies, establishing a physical connection and communicating, but defining a
transformed information flow. Another key gap, therefore, is the lack of research insights at
the intersection of processes and functions where Industry 4.0 technologies are being 299
considered and therefore, guidelines and strategies to mitigate challenges during
transitioning from traditional to Industry 4.0 systems.
It was further observed that while the past global academic research has examined the
Industry 4.0 elements and the constituent disruptive technologies, it does not clearly bring
out the Indian context, as India specific research undertaken in this area has been limited.
As per the market data, India’s SMME’s constitute 90 per cent of the total industrial units in
India (IBEF, 2018). The academic literature review highlighted the lack of India-specific
insights available regarding this segment. It is important to note that Indian SMMEs have
been traditionally risk-averse. Most Indian SMMEs have been laggards, a smaller
proportion pragmatic, with very few visionaries and they have been known to adopt
transformational initiatives based mainly on peer successes. A clear road map with success
criteria needs to be established for promoting adoption of Industry 4.0 by Indian SMMEs.
This includes the element of manpower and skill gap fulfillment required to support
organizational transformation. Manpower is one of the major issues for the fourth industrial
revolution, because new skills are required at all levels, i.e. technician, supervisory and
managerial. Another crucial gap, observed from the literature survey, therefore, is the
absence of Indian context in the existing research literature.

3. Research methodology
The methodology adopted for this study has been inspired by the approach suggested by
Matt et al., 2018, in his research on introduction of Industry 4.0 knowledge to small and
medium business establishments. Matt et al., 2018, suggests a five-step approach suitable to
introduce smart factory concepts in SMMEs – starting from building awareness, identifying
requirements, performing self-assessment, studying the gap analysis to crafting an
implementation plan.
The proposed research methodology for the current study is shown in the Figure 1.
While Steps 4, 5 and 6 are generic steps to implement anything transformational, Steps 2
and 3 of the proposed methodology are specific to SMMEs. The primary challenge of
SMMEs is to understand the underlying elements of Industry 4.0 and how the new and
disruptive technologies can help improve their performance. Most Indian SMMEs do not
have appropriately trained team members and, therefore, they need the preparatory steps to
build awareness that Industry 4.0 is considered important for the future of their respective
establishments. Further, they need to organize their ideas around requirements regarding
Industry 4.0. Subsequently, the SMMEs undertake maturity self-assessment to establish
aspirational gaps and the corresponding business values.

Figure 1.
Research
methodology based
on Matt et al., 2018
CR Literature review undertaken helped to understand the Industry 4.0 technologies in context
30,3 of manufacturing organizations and especially, Indian SMMEs. This also contextualized the
current study of digital transformation and provided the knowledge content to be shared
with the representatives of Indian SMMEs with the objective of awareness creation.
Subsequently, this helped the SMMEs to envision goal-oriented initiatives aligned with their
organizational goals.
300
3.1 Literature review
The research methodology crafted for the current study begins with literature review of
recent research work around Industry 4.0 technologies, smart manufacturing concepts and
business drivers and challenges faced by global and Indian SMMEs during the present
times, as well as, in the future. Extract of the literature review in the form of information and
knowledge provided the necessary in-depth understanding to contextualize the technology
elements of Industry 4.0 for Indian SMMEs, identify the research gaps and conceptualize the
scope of the current study. It was an intent of the literature review to extract and build a
repository of relevant information which can be referred during the study.

3.2 Awareness workshops for key personnel of Indian small and medium discrete
manufacturing establishments
A series of multi-city, regional workshops were organized for India’s SMMEs to help them
understand and build relevance of the constituent technologies of Industry 4.0. The
workshops also threw light on the readiness of SMMEs to adopt digitalization and assess
their transformational effort. The workshops were attended by middle management
personnel belonging primarily to multi-disciplinary engineering functions of SMMEs with
an expectation that they would influence and lead the various transformational initiatives in
their own organizations.
The Industry 4.0 elements were explained in context of the organizational functions of
product design, development and manufacturing. They were updated on the emerging
global trends and criticality of improving efficiency, productivity, quality, flexibility to
remain competitive in a globalized economy was explained. Subsequently, the maturity
assessment survey was undertaken.

3.3 Establish functional initiatives

The awareness and learnings gained from these set of workshops helped the attendees to
establish their functional initiatives contributing to the larger organizational goals which
can be better attempted leveraging the new technologies. The key drivers faced by the
SMMEs were generally classified under broad topics of improved flexibility, efficiency,
productivity, quality and cost. The workshops focused on the relationships of the drivers
and the technologies for example, digital product definition and performance simulation,
validation of manufacturing strategy using digital manufacturing concepts, gathering
operational data from machines and IoT, improving flexibility by introducing autonomous
robots in the shop floor.

3.4 Build a maturity assessment framework

A maturity assessment basis was established combining the elements of Industry 4.0 on the
integration map. Relevance of adopting Industry 4.0 elements in the three integration
dimensions, described in Section 2.1, was studied.
 System integration strategies result in seamlessly integrate and digitalize the product India’s discrete
development value chain from product design, production planning, production manufacturing
engineering, production execution to post-sales services, including supplier collaboration.
The integration includes close-loop feedback from manufacturing and post-sales stage for
SMEs
product and process optimization. This holistic approach creates a perfect digital copy of the
entire value chain – the digital twin. IoT, Big Data and Cloud combine to provide real-time
performance data feedback to design, quality and manufacturing functions of the product
development value chain thus delivering actionable intelligence to better align the physical
301
product and virtual digital twin model with actual product performance. Autonomous robots
equipped with CPS and IoT are deployable to support unique industry applications such as
pick-and-place, material surface treatment, arc welding and laser cutting in the
manufacturing shop floor. Simulation is a frequently used validation method to evaluate
multiple engineering alternatives and decision-making, either for design, manufacturing
planning or execution functions. CPSs are deployed in conjunction with IoT to facilitate
digital services on the manufacturing shop floor to improve communication of operational
data and performance parameters. AR is frequently deployed on the later stages of product
development value chain – on the shop floor to learn new processes, perform material audits
and further down, to execute onsite maintenance tasks augmented by immersive, internet
enabled wearables. AM impacts the product design stage by removing the barriers of
conventional manufacturing and therefore, promoting more organic design ideas which then
can subsequently be realized using 3-D deposition of material. This understating helps
establish that of the three integration dimensions, the integrated product development value
chain has the most potential to gain from adopting Industry 4.0 elements.
The functional areas of the various Industry 4.0 elements are thus mapped on the end-to-
end integrated product development value chain from product design till services (Figure 2).
Two additional areas of foundation and infrastructure have been added to help consider the
preparatory and enabling aspects (Figure 2) of the product development value chain.
Each of the seven stages of the digital value chain has several functional areas
(Chryssolouris et al., 2009, Müller et al., 2012) that leverage the various Industry 4.0
technologies, derived from literature review and knowledge of established industry
practices.

3.5 Maturity assessment survey to establish current and future adoption

To establish the status of the Industry 4.0 technology adoption by the SMMEs in India, a
maturity assessment survey instrument was designed and responses from representatives
of Indian SMMEs were collected after awareness workshops. The current adoption and
future aspirations were mapped with five levels of maturity (Appendix) for each of the
functional areas. More than 250 diverse Indian manufacturing companies were surveyed. In

Figure 2.
Seven stages
including five-step
product life-cycle
value chain and its
constituent functions
CR total four workshops were held in four diverse locations of India. They were asked to score
30,3 what is their current maturity level and their aspired maturity improvement till 2020.
In total, 38 persons completed the survey. Because the sample is not a probability sample,
it is not possible to make any probability-based inferences about the population from which
it was drawn. Moreover, the way the sample was selected probably introduced some biases.
That is, because the persons who completed the survey were volunteers, and because the
302 survey was administered electronically, the e
This maturity assessment survey is intended as an instrument for organizations to
assess their aspirations regarding technology adoption with the objective of achieving
certain business benefits. No generally accepted methodology exists for assessing the
maturity of an organization w.r.t. the adoption of technology to manage its business
processes (Kulkarni and St Louis, 2003). Five levels of maturity have been conceptually
derived, somewhat like the broad framework of Carnegie Mellon’s Capability Maturity
Model (CMM) for software engineering. However, unlike the CMM assessment that is largely
factual, this self-assessment of adoption of Industry 4.0 technologies is largely perceptual.
The maturity levels and the assessment instrument were developed in concert with industry
and its prevalent practices, as gathered from comparatively matured set of manufacturing
establishments. As the sample is not a probability sample, it is not possible to make any
probability-based inferences about the population from which it was drawn.
Although the overall assessment methodology is still under development, the results of
our survey indicates that self-assessment of Industry 4.0 adoption maturity is possible, and
that this assessment provides valuable feedback for more effective adoption. The survey
was administered face-to-face and the respondents were able to complete it with remarkably
few problems, and the level of adoption maturity for each functional element was very clear.
Therefore, this appears to be a cost-effective method for organizations to assess their levels
of Industry 4.0 adoption maturity. The longer term goal of this research is to validate the
maturity assessment model by assessing the business benefits associated with Industry 4.0
adoption.
The current adoption and future aspiration were scored on five maturity levels for each
of the functional areas, each of the levels appropriately defined. The maturity levels for the
various elements are described in Appendix. The five-levels from 1 to 5 represented the
levels of adoption for the respective function, 5 suggesting highest level of sophistication.
Care was taken to keep those stages unambiguous and very clearly separated from each
other while being interpreted to avoid mistakes in self-assessment of adoption and
aspiration. The surveyed representatives were first asked to state their current state of
adoption based on the maturity definitions from the five levels of maturity in each of the
functional areas. Then they selected the aspirational state of achieving higher proficiency
for the specific function. To ensure that the surveyed representative does not influence the
evaluation of one function with any other, during the survey, clarifications were provided
immediately for any queries raised regarding the technical content and impact of the
function. Before final submission, the selections were revisited for any normalization that
the respondent desired to incorporate in his or her response sheet.

3.6 Analyze the maturity assessment survey results for establishing organizational priorities
The maturity assessment survey results were collated and analyzed for establishing
functional priorities of the manufacturing community. Priorities were established based on
the identified survey gaps between current adoptions and future aspirations. The priority
functional areas collectively are expected to indicate the priority Industry 4.0 elements
which need to be implemented to be able to achieve the corresponding transformation. As
discussed in the previous sections of this paper, each of the Industry 4.0 elements has a India’s discrete
transformational role to play in various functions of an SMME. The inference drawn from manufacturing
the largest gap areas indicate the elements to be implemented and the priority action plan.
SMEs
4. Results, analysis and discussions
4.1 Results of the maturity assessment survey
The maturity assessment scores were collated, cleansed, categorized and holistically viewed 303
in a spreadsheet to get an overall pattern of responses against the seven functions. As the
response sample was not a probability sample and there was no intention of make any
probability-based inferences, a simple methodology was devised to get a consolidated view
of the gaps between current and aspirational responses against each element of the seven
functional areas which provided the guidance for actionable insights.
4.1.1 Topmost aspired growth areas in each of the five functions. Based on the maturity
assessment survey results, the topmost aspirational areas in each of the five functions of
product development value chain have been identified (Table I). In the product design
function, the SMMEs aspire to manage programs as against the present situation where
they mostly supply build-to-print components. Program management includes acquisition
of customer requirements, developing specifications and detailed design, monitor project
costs and timelines and deliver within the time, cost and quality constraints. These can be
achieved by implementing collaborative digital technologies. It indicates that most Indian
SMMEs aspire to elevate their status in the value chain and become system suppliers as
against their current role of component manufacturers. In the production planning function,
the SMMEs aspire to work with integrated manufacturing bill of process that defines the
process plans and resources in synch with the product design. SMMEs recognize the need of
integrating design to manufacturing so that they acquire capabilities to offer operational
flexibility to cater to the mass customization needs of their customers. In the production
engineering function, the Indian SMMEs aspire to simulate and validate the manufacturing
process plans by undertaking automation decisions, validating CNC and Robotic programs
and virtually commissioning PLCs and controllers. SMMEs therefore, aspire to leverage the
Industry 4.0 elements to improve asset utilization and execute first time right manufacturing
output. In the production execution function, SMMEs aspire to leverage IoT, big-data and
cloud technologies to acquire operational insights and prioritize integrated quality
management systems while generating various control documents which are critical for
complex sub-system manufacturing. For the customer facing post-sales services function,
the SMMEs aspire to leverage IoT, integrate maintenance so that they can fulfill customer
SLAs with predictive maintenance based on real-time data acquired from the field.
4.1.2 Transformation aspired for areas across the five functions. Based on the maturity
assessment survey results, it can be observed that SMMEs in India aspire to transform
across the entire value chain. In some of the identified areas, the aspirations are
comparatively more aggressive. These areas have been identified as priority areas by the

Functions Elements

Product design Program management

Production planning Manufacturing process definition
Production engineering Machine/Line/Cell automation planning and simulation Table I.
Production execution Quality management Topmost areas of
Services Maintenance aspired improvement
CR SMMEs (Figure 3). The biggest gap areas are in reporting, analytics, diagnostics and
30,3 metrics monitoring. This assessment is in line with the real situation on the ground as most
of the operational assets owned by Indian SMMEs are not IoT ready. Another significant
aspirational gap is observed in shop floor for the utilization of various automation
equipment and programmable equipment such as PLCs, CNC machines and robots. This is
attributed to online programming or machine teaching as a hit and trial approach, whereas
304 adoption of off-line programming and Industry 4.0 simulation element can contribute
towards improving the utilization, speed and accuracy of operations. Alternative
evaluations in design and manufacturing planning function is another critical area where
aspirational gap is significant. Using performance simulations, new age designers empower
themselves to perform several alternative design evaluations to be able to select the most
optimum design. Alternative evaluations in manufacturing planning function fosters
process innovation. New age production planners simulate, evaluate and validate multiple
process alternatives to select the most optimum. This results in improved machine
utilization, manufacturing quality and overall efficiency.

4.2 Analysis of maturity assessment survey results

Although it is not possible to make any probability-based inferences, it is possible to
describe the results for the maturity assessment survey and make subjective and qualitative

Figure 3.
Gap between “as-is”
and “to-be” – Blue
line > 90 per cent and
Red line >80 per cent
statements about Indian SMMEs’ adoption of Industry 4.0 technologies. The survey did an India’s discrete
excellent job of assessing perceived maturity with respect to the model that were developed. manufacturing
That is, the survey instrument was able to provide an assessment of the current perceived
state of Indian SMMEs and their aspirations for technology adoption.
SMEs
The consolidation of survey results (Figure 3) suggests that the areas which have the
largest index of aspiration belong to two broad categories. The two distinct categories those
emerge from the analysis are Metrics (M) and Transformation (T).
Metrics include areas of reporting and analytics, performance-based measurements, 305
diagnostics, metrics and knowledge management. This indicates that the SMMEs aspire to
collect and analyze real-time operational data from shop-floor and post-sales product usage
by customer. SMMEs aspire to have access to real-time operational and services data and
generate analytics to be able to take corrective and improvement measures. Data
management and retrieval, constituting knowledge management and insights gained from
those is another significant aspiration of Indian SMMEs. This also points towards their
recognition of the value of organization’s intellectual property which can be effectively
monetized.
Transformation priority areas consist of integrated quality management, automation of
device programming, scheduling, sequencing and line balancing, machine line cell automation
and simulation and alternative evaluation. This second broad aspiration category of
transformation indicates the subsequent measures to be taken based on insights collected
from shop-floor as well as from customer usage. The SMMEs would like to first intervene by
evaluating alternative product designs using various simulation methodologies, perform
design for manufacturing (DFM) and design for quality (DFQ) studies to improve the
manufacturability, quality and usability of the product.
The second set of intervention is intended in manufacturing with the intent to improve
manufacturing quality, operational efficiency, utilization and productivity. By introducing
automation, errors are reduced while enhancing flexibility. Small batch sizes can be
manufactured without losing efficiency and adding costs. Alternative schedules can be
evaluated to select the most optimum. Focus on automation programming, indicates that
India’s SMME’s aspire to be flexible so that they can meet the challenges posed by larger
competitors who have the advantage of economy-of-scale with their unique value of catering
to mass customization needs of the market. Focus on scheduling, sequencing and line
balancing suggests interventions required to improve efficiency and productivity while
maintain desired quality levels.

4.3 Priority actions to be taken

The maturity assessment survey undertaken shows that India’s SMMEs aspire to prioritize
connected machines, data capture and analytics which in the parlance of adoption of
Industry 4.0 elements means CPS, IoT, cloud and Big Data supported by systems
integration followed by design and manufacturing interventions. Therefore, instead of the
stated sequence of digitize, industrialize and optimize (PWC survey, 2016; CIMdata, 2018),
Indian SMMEs may adopt the reordered sequence of industrialize, digitize and optimize and
expect to achieve improved benefits of time-to-market, flexibility, quality and efficiency.
To industrialize, Indian SMMEs need to connect machines, implement IoT devices,
manage energy consumption, generate data, adopt cloud strategy to generate appropriate
operational and energy analytics and identify and prioritize areas of improvement both for
products and processes.
To digitalize, Indian SMMEs need to adopt digital product development methodologies
such as, CAD, CAM, CAE and PLM, manage engineering information, manage product
CR lifecycle, evaluate design alternatives and manufacturing process alternatives using
30,3 simulation and validation thereby fostering innovation.
To optimize, Indian SMMEs need to generate analytics and insights to improve design,
quality and manufacturing processes. Digital documentation across functions need to be
adopted to be compliant and maintain traceability. Integrated product costing can help
monitor product and process costs including cost of change and ensure profitability.
306 Capacity and utilization metrics can help exert control to improve efficiencies.

4.4 Connected machines and data analytics to establish areas of improvement

Flexible automation requires manufacturing technology solutions that can satisfy the
requirements of unpredictable order flow and dynamic shop floor. The solution lies in
implementing the overall ISA-95 Level 3 system (Unver, 2013), that is tightly coupled and
integrated with the automation systems at Level 1 and 2 to provide the required
functionalities of process visibility, process orchestration, proactive process error-proofing
and automated collection of various process data.
Overall process visibility can be achieved through web browser-based front ends that
provide ability to visualize the line, process and status of the equipment to users on the shop
floor and beyond. The process visibility helps achieve process orchestration for coordinated
movement, placement of equipment and sequencing of the overall process and actions of the
equipment and systems. Process and equipment interlocking through business rules allows
proactive process error-proofing and dynamically act on conditions as specified in the
process. These collectively facilitates automated collection of overall equipment
effectiveness (OEE) and process data from work cells, tools, automation devices and quality
systems for analysis.
A dynamic Level 3 system can manage complexity seamlessly to broaden the scope
beyond monitoring assets performance. It can also enable a dynamic decision-making
process through coordination of information in multiple dimensions – strategically from
Level 4 and tactically from Level 2.
For an India’s SMME, transforming to a smart factory is a business process and journey.
An organization’s journey to leverage increased automation requires implementation of the
right technologies. Key Level 3 system functionality “additions” over base equipment health
monitoring include automation to support agile and reconfigurable manufacturing systems.
It helps improve process transparency through appropriate human-machine interfaces and
fosters real-time monitoring and diagnosis at different levels – from machine to cell to line to
plant. It specifically detects, measures and monitors variables affecting manufacturing
performance. It is critical to relate performance and throughput to the KPIs such as cost,
energy, efficiency, safety, reliability and maintainability and Level 3 system helps
integration of sensory capabilities of machines and workers into monitoring systems. In
summary, it enables decision-making at the shop-floor more user-friendly and agile.

5. Conclusion and future research directions

Based on the study as stated above, it can be concluded that the India specific research
regarding Industry 4.0, especially for India’s large number of SMMEs, is at the stage of
definition and awareness creation. Indian SMME fraternity expects that it needs to build the
ability to embrace Industry 4.0, enabling innovation and helps progress towards mass-
customization; therefore, the methods need to be assessed and framed for specific adoption.
Skilled talent pool in the manufacturing workforce emerges as a critical success factor for
this journey towards Industry 4.0, therefore, needs to be included in the India strategy.
 Freely available academic literature covers most technical aspects of the Industry 4.0 India’s discrete
elements, but is limited in providing use-cases to imbibe the methodology of adoption. manufacturing
Global academic literature is available with reference to SMEs as well, however, in most
SMEs
cases, global SMEs have revenues four times that of an average Indian SME and
necessitates India specific study. Our study subject of identifying digital transformation
priorities for Indian SMMEs in perspective of Industry 4.0, therefore, assumes critical
relevance. 307
In this study, objective is to prioritize Industry 4.0 elements for Indian SMMEs. One of
the elements of Industry 4.0 system integration has been identified as a “priority” strategic
initiative to be undertaken by India’s SMMEs, whereas the rest of 8 elements are disruptive
technologies those can be adopted selectively in the functions of the integration. As a part of
this study, the respective business values of the disruptive technologies have also been
understood, which in turn is the basis of adoption and prioritization.
A maturity assessment survey was undertaken to establish the priorities of Industry
4.0 functional areas for Indian SMMEs. There are some limitations of the present
method that need to be addressed in the future. Although the results of the assessment
survey were clear with respect to the maturity definitions, generalizing this
methodology for assessing the Industry 4.0 adoption maturity will need further studies.
Also, both perceptual and factual assessments are required to assess an organization’s
maturity level. The task of designing an instrument for collecting factual data is part of
our on-going research project. This is proposed to be addressed by a long-term study
that validates the maturity scale and corresponding benefits associated with each level.
The broad plan entails work in two directions. One is towards expanding the survey to
include factual data-related questions, and administering the assessment functionally
i.e. in engineering section, planning section, manufacturing section and so on. The
results so obtained, will also validate the metrics selected to study the benefits of
adoption of Industry 4.0 elements. The other direction is towards validating the metrics
and the assessment methodology across various types of Indian SMMEs, i.e. sheet
metal, forging, casting, tooling, plastics, machining, fabrication, assembly and so on.
While standardization of the maturity assessment methodology is a long-term goal of
this research we are presently working on the next phase of this project, in which the
effect of Industry 4.0 enablers and barriers on outcomes will be studied.
The maturity assessment survey results show that contrary to popular belief, that
Industry 4.0 implementation starts with digitization followed by industrialization (or
integration) which subsequently continues with optimization, Indian manufacturing
establishments indicate their preference to prioritize industrialization, i.e. connecting
machines and generate data analytics using IoT, Cloud and Big Data and establish the basis
of further interventions. Interventions are required most likely in the design and
manufacturing functions, where they would deploy other Industry 4.0 technologies which
foster effective results impacting the business values. In summary, the preferred sequence
being “Integrate” to derive insights, “Digitize” to intervene in design and manufacturing for
improvements, followed by “Optimize”, based on continuous improvements executed as a
process response to real-time metrics.
Further research and understanding needs to be established to arrive at a cost-effective
way of achieving overall process visibility, automated collection of process data, process
orchestration for achieving improved throughput, utilization and efficiencies and most
importantly identifying the upstream and downstream functional areas of improvement to
extend business value and resulting in benefits for India’s SMMEs.
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Corresponding author
Gautam Dutta can be contacted at: dutta.gautam4@gmail.com
Score 1 2 3 4 5

Foundation Appendix
Internet access None Standard speed High speed Dedicated Secured (VPN)
e-mail Do not have Free email Dedicated Secured (Ex :VPN) Secured w/File sharing
Intranet None WiFi Secured WiFi Dedicated LAN netwok Secured (VPN)
IT strategy Ad-hoc Networked PCs Client server Client server DB Client Server DB Cloud
Cloud strategy Public cloud Shared private cloud Private cloud Managed Private Cloud Hosted Managed Cloud
Product design Only drafting Physical prototyping Digital designing Digital designþ Test and Digital Design Test
function simulation Simulation and e-BOM
management
Manufacturing Methods planning Digital manufacturing Digital design integrated Digital manufacturing Digital Manufacturing
planning process manufacturing and simulation Simulation and m-BOM
management
Product design
Component definition Still in 2-D drafting 2-D and 3-D modelling Design with simulation PDM/Change Collaborative Digital
management Design Process Lifecycle
with traces of Lifecycle
Management
Functional simulation Manual physical Single physics simulation Multi-physics simulation System design and 3-D Test and Simulation
prototyping simulation correlation
Form and fit Use of hand-made 3-D assembly validation Digital mock-up (DMU) 3-D printing used for Virtual Reality and
validation prototyping design validation Augmented Reality
Alternative None Ad hoc Efficiency and cost driven DFMEA/ QFD/ feedback TRIZ/Innovation Driven
evaluation target driven
Product assembly 2-D Blue prints VDU based 3-D models PDM driven search Cross discipline, multi- Lifecycle management þ
management and exploded views dashboard disciplinary digital design digital Bill of Materials
(BOM)
Program Manual/Excel driven Product data management Project data management PDM þ PM þ Cost PDM þ PM þ CM þ
management (PDM) þ Project management (CM) Supplier Integration
management(PM)
(continued)

Table AI.
SMEs
manufacturing

and its definitions

with constituents
for seven functions
311

Survey score criteria

India’s discrete
 CR
30,3

312

Table AI.
Score 1 2 3 4 5

Production planning
Manufacturing None Manual Excel based (eBOM) – Bill of process(BOP) & Electronic Work
process definition (mBOM)–(BOP) process simulation Instruction(EWI), Bill of
Process(BOP), Process
Simulation and
Optimization
Plant layout, None Manual Digital layout planning Digital layout simulation Digital Layout Planning
simulation and and Optimization
optimization
Design for None Manual Manufacturing simulation Manufacturing based Real Time Manufacturing
manufacturability design optimization feedback and Analysis
(DfM) analysis
Design for quality None Manual Quality simulation Quality based design Real Time Quality
(DfQ) analysis optimization feedback via CRM and
Analysis with close loop
corrective action
Supply chain Ad hoc ERP based integration Digital design Digital design Program and Cost
downloaded collaboration Management
Production engineering
Machine/Line/Cell None Manual Excel based homegrown Traces of digital Full Digital Simulation
automation System simulation Integrated with eBOM
simulation
In plant logistics Manual ad hoc Demand based ERP based input/out put Planned, simulated and Scheduling system
tracking transactions optimized integrated with RFID/
Barcode
Scheduling, None Manual Homegrown system Stand-alone solution Integrated with BOM
sequencing and line
balancing
Robot, PLC, CNC None Stand-alone on station Offline developed and Offline developed and Virtual Commissioning
programming manually downloaded electronically transmitted and Transmitted based on
schedule
IoT readiness None Only with new machines Machines retrofitted IOT Products and machines Active Cloud integrated
ready IOT IOT
(continued)
Score 1 2 3 4 5

Production execution
Data Collection None Manual data collection Electronic data entry and Sensor based data Smart Sensor based Data
collation collection Collection
Dashboarding None Manual reporting Dashboard Dashboard and analytics Smart analytics
(analytics and
reporting)
Quality management None Random inspection Manufcaturing process Integrated quality Quality Management
integrated inspection plan lifecycle documents system
Metrics monitoring None Random storage and need Electronic storage and Integrated lifecycle data Knowledge Management
and knowledge based retrieval retrieval storage
management
Manufacturing Level 0/1 (stand-alone Level-2 Level-3 (L2 þ PLC with Level-4 (L3 þ SCADA þ Level-5 (L4 þ MES and
automation level automation) (L1þOrchestration) manufacturing data bus) OEE þ Link to ERP) Close loop to Engineering
and Quality)
Services
IOT data None Local storage Central storage Private coud Secured Public Cloud
management
Diagnostics Manual diagnostics Wired diagnostics IOT-based diagnostics IOT-diagnostics and IOT Diagnostics and
analytics Resolution downloads
Performance based None Manual collection Periodic onsite downloads IOT-based performance IOT Ready and Big data
metrics metrics upload Analystics
Maintenance Pre-set period and Response to customer Condition monitoring and IOT -based condition IOT Based Condition
breakdown need with CRM preventive maintenance monitoring and predictive Monitoring with Big Data
maintenance maintenance Analytics with Predictive
Maintenance
Reporting and None Manual reporting Basic dashboards Advanced dashbirads and Big Data Analytics and
analytics analytics scenario flagging
Maintenance training Nil Need based-human Digitally simulated Digitally simulated with Monitoring and re-skill/
and skill development assisted feedback upgrade skill
systems
(continued)

Table AI.
SMEs
manufacturing

313
India’s discrete
 CR
30,3

314

Table AI.
Score 1 2 3 4 5

Infrastructure
Continuous skill None Need Based Periodic plan Technology dependant People Growth oriented
upgradation
Engineering None Internships Customised industrial Synched curriculum Joint R and D Programs
institution tie-up traning modules
Cluster shared None Need based adoption Managed operations Shared services Center Of Excellence
services
Industrial data Stand-alone machines Field equipment network, Controller network: with Supervisory Network: External connections:
networks with Profibus Profibus, Ind Ethernet with Ind Ethernet, Ethernet, wireless, GSM
wireless
Supplier Ad-hoc/need based/ email with attached email with ftp of two way Secured Supplier portal PLM based, integrated,
collaboration manual documentation document sharing project managed
Inbound supply chain Material requisition Production work order Material/Part identity Material/Part traceability Part traceability to final
track& trace document based requisition with RFID/Barcode link to Work/production product
order
Outbound supply Product/Batch- Batch tracing to Product tracing till ProductþAssembly level Productþ AsseblyþPart-
chain track &trace dispatch level distributor level customer level (for servicing) level (for servicing)
Documentation Manual Template driven Workflow based Authoring tool with PDM Integrated authoring tool
templates with lifecycle
Data inputs Manual Semi-manual Barcode/RFID tracking Sensor driven IOT driven