DBT Bureau
27 Oct 2024
An overwhelming majority of Indian manufacturers are prioritising sustainability to target a 2-3x rise in profits over the next three to five years, according to PwC’s report Decoding the Fifth Industrial Revolution: Marching towards a Resilient, sustainable and human-centric Future.
Covering six industries, the study finds, 93% of Indian manufacturers are embracing Industry 5.0 to drive both sustainable practices and boost revenues.
As per the research conducted by PwC, more than 50% of Indian manufacturers are prioritising investments this year in sustainable practices. These investments are aimed at leveraging digital technologies to adopt renewable energy sources and enhance energy efficiency, among other things.
Additionally, 52% of top executives at leading manufacturing companies are also allocating investments this year toward building a culture of lifelong learning.
Sudipta Ghosh, Partner and Industrial Products Leader PwC India commented: “Industry 5.0 represents a defining moment for the manufacturing sector – one that creates a symbiotic relationship between humans and advanced technologies like artificial intelligence (AI), robotics and the internet of things (IoT). Companies that fast-track their adoption of these capabilities will establish a competitive edge in the coming years, as transformation is crucial for building a sustainable and resilient future with humans as an integral part of this transformative journey.”
PwC’s study also found that most manufacturers stand to improve both their financial and operational performance by embracing Industry 5.0. With Industry 5.0 adoption, Indian manufacturers will be able to increase their revenues by 6.42% over the next two years, building momentum towards greater sustainability and resilience. According to the research, manufacturers estimate that their companies are likely to have foregone 4.37% of their FY24 revenues due to lower maturity in Industry 5.0 capabilities.
The report reveals that some sectors have been more proactive with their investments than others. In the cement and industrial goods sectors, for instance, 95% of manufacturers are prioritising investments in real-time inventory tracking, this year and the next.
PwC’s study includes insights from C-suite executives and senior leaders across the automotive, cement, chemicals, industrial goods, metals, and textiles industries.
The findings show that as training becomes more substantive and on-the-job, the workforce would start experiencing the potential of machines to complement as well as supplement their skills, helping them do their work faster and better. This would alleviate apprehensions about machines such as robots and digital technologies leading to job losses, a concern highlighted by nearly half of the executives surveyed from the automotive and cement industries.
“Historically, machine and technology integration on the shop floors and operations has happened with a top-down perspective. However, in the context of GenAI, the story would differ slightly. In this case, the bottom-up innovation focus will need guidance through adequate top-down guardrails. Yet, the inability to provide secure access to GenAI and similar technologies to enhance workforce productivity has bubbled up to be a challenge for many executives across industries such as automotive, cement, chemicals, and textiles and clothing,” added Ghosh.
Key Findings:
- Most executives agree that their readiness pertaining to Industry 5.0 capabilities relevant for their customers, workforce, supply chains, business models, and ESG commitments would help enhance their revenues by 6.42% on average over the next one to two years.
- Executives from the chemicals, cement, textiles and clothing sectors believe that their industries would see the most significant gains from the adoption of Industry 5.0, with potential revenue expansion exceeding 7%.
- Most automotive and metals executives highlight that their customers are willing to pay a premium for innovative products and services. In the textile and clothing sector, executives note consumer readiness to pay a premium for sustainable products.
- More than 95% of respondents in the cement and industrial goods sectors are prioritising investments in real-time inventory tracking to optimise inventory levels, reduce stockouts, and minimise excess inventory this year and next.
- Inability to provide secure access to Generative AI and similar technologies to enhance workforce productivity is a challenge for many executives across industries such as chemicals, textiles and clothing, cement, and automotive. Nearly 52% of executives across industries are prioritising investments in automating repetitive and mundane tasks this year to allow employees to focus on more meaningful and value-generative work.
Other Key Sectoral Findings:
· Building Responsive Supply Chains: On average, nearly 50% of executives are channelling their investments to build responsive supply chains by factoring in real-time data and analytics to check for potential disruptions and adopt prescriptive measures to mitigate risks.
· Adoption of Renewable Energy and Energy-Efficient Practices: More than half of the executives are prioritising investments this year towards building mechanisms to facilitate the adoption of renewable energy sources, implement energy-efficient practices, reduce waste generation, and manage water usage responsibly.
· Investment in Lifelong Learning and Upskilling: 52% of senior executives across industries are prioritising their investments this year towards building a culture of lifelong learning, providing opportunities for upskilling and reskilling employees to encourage experimentation and innovation.
· Sustainability and Employment in Automotive, Chemicals, and Metals: More than 80% of executives in the automotive and chemicals sectors envision their industries being admired for their actions to drive sustainability and employment. They see their workforce and customers becoming increasingly sensitive to the environmental and social friendliness of the goods and products they produce and consume.
· Cybersecurity Measures: Recognising the growing importance of cybersecurity, 46% of executives across industries are prioritising investments in building capabilities aimed at protecting manufacturing systems, data, and intellectual property from cyber threats and ensuring the integrity and reliability of operations.
