Interview | Automation penetration in MSME sector is low at 12-15%: Schneider Electric’s Meenu Singhal

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January 25, 2021 5:57 PM

Technology for MSMEs: "We have seen a good amount of convergence coming in from MSMEs in the past few years as people have started asking for digitisation and they are now looking for brand-neutral or brand-agnostic solutions."

"Manufacturers in India feel more elevated to invest and adopt technologies."

Technology for MSMEs: Businesses of all sizes have been making a beeline for Industry 4.0 solutions to enhance their efficiencies and adapt to the mammoth industrial change that would define their future. The industrial internet of things (IIoT) has offered unprecedented possibilities of building efficiencies across an entire system of industrial operation. However, MSMEs have been off to a seemingly slow start towards adopting these technologies. “They first want to see the proof-of-concept of the technology,” said Meenu Singhal, Vice President, Industry Business, Schneider Electric. In an interaction with Financial Express Online, Singhal shared MSMEs’ perspective towards automation, challenges, the market at large, and more. Edited excerpts below:

How does Schneider look at the technology challenges for MSMEs related to industrial automation?

Today we have more than 6 crore MSMEs and they are not adopting the latest technology as of now. Their access to research and development facilities is minimum and entrance to new technologies and connectivity is very low. Their ability to sell products to a wider market is also technology-dependent and that whatever they are producing is in compliance with regulatory standards and is efficient. So, these are some of the things which are in terms of technology needed and are provided by Schneider to our customers to get better.

What kind of solutions MSMEs are looking for now?

We have seen a good amount of convergence coming in from MSMEs in the past few years as people have started asking for digitisation and they are now looking for brand-neutral or brand-agnostic solutions. Our EcoStruxure Automation Expert platform gives the end customer or the OEM a possibility to connect their existing plant on the higher edge of technology at a lower cost. Our channel partners are trained to automate a small area of their plant or the entire plant as MSMEs don’t necessarily have to go for the digitisation of their entire plant. For example, if you are a biscuit machine maker, the packaging to be redone every time whenever the size of the biscuit is reformatted. Re-accommodation of the machine is required that requires a humongous amount of downtime of the machine. With our solution, just by a click of the button, the local machine operator can get into customization of the machine, and the packaging scenario can be redone automatically.

Have MSMEs been receptive to your offerings? How do you tell them that money can be saved here?

They first want to see the proof-of-concept of the technology. So, we offer them a virtual tour of the smart manufacturing facilities created in Hyderabad and Bengaluru, Also, the amount of energy saved to produce output in our and our customers’ factories has been high. This makes people realise that money and energy can be saved by giving the same output not only because one is using efficient products, but also because they are optimizing assets. Today we are talking about complete asset optimization — from the input of the raw material to the output of the factory.

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How are you tapping into the semi-urban market and how deeply penetrated it is?

We have increased the coverage of Schneider Electric’s go-to-market to Tier-I, II, and III cities through our partners. So, if a plant is coming up in a place that is somewhere near Roorkie, we will be having a partner who is near that area and can support that product. Most of these manufacturers buy machines from OEMs. So, machine OEMs are our first target, and our access to end-users, which are MSMEs, is through these OEMs. Automation is a big market for India. I think it will be around Rs 35,000-40,000 crores. The market penetration is limited to 25 to 30 per cent in the MSME sector. In terms of energy efficiency, the penetration is higher but in terms of automation, the penetration is lower. Giving a ballpark figure, in terms of energy saving, the penetration would be more than 30 per cent and 12-15 per cent in automation. We are a global leader in operation and monitoring software platforms with more than 23 per cent market share.

Do you think MSMEs are hesitant to deploy such solutions because of pricing? How significant has been the cost of technology here?

When we talk to MSMEs about their desired dream to expand beyond the Indian market, the cost becomes secondary at that time. It’s the value that becomes more important. Can their products display that mark of quality, can their products be certified with the approval they need for getting into the global market? And if it is helping them to increase their profitability, which it does, then the trend in any kind of segment is that the cost of the technology is less than 3-4 per cent of the cost of the capital investment that they are investing to start that plant.

The government has been focusing on reducing carbon emissions and switching to clean energy. Have you engaged with them to extend your solutions? Also, how do you look at it in light of the Atmanirbhar Bharat programme?

We have a group that is very much connected with the government bodies. We are in touch with the energy, EV, and manufacturing sectors of the government of different segments, including water, wastewater, power grid, automation, and electrical manufacturing to showcase what we offer. Now is the time for “Make in India’ or ‘Atmanirbhar Bharat’ which has been strongly promoted. Manufacturers in India feel more elevated to invest and adopt technologies. So, this is the support from the government to not only increase manufacturing but also increase automation in manufacturing.

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