India: Robots Antidote to Poor Quality?

Can robots aid the “Make in India” quality movement long stymied
by “chalta hai”?

“I didn’t spray paint this tank as well as it should be done, but hey, it’ll do, “chalta hai” (It’s OK).

The “chalta hai” syndrome
For many industries in India quality is elusive, what the head of the country’s Quality Council sees as devastating for India’s future. The quality of goods and services in India lags that of many other developing countries, he says, because of “chalta hai”, a Hindi term meaning the casual acceptance of shoddiness or poor quality in goods and services as a way of life.  

In a recent article, Adil Zainulbhai, head the India’s Quality Council and former chairman of McKinsey India sees a need to quickly reverse the “chalta hai” attitude: “India has to break out from its low-quality past and embrace quality in the next stage of its growth…We are at the cusp of a quality revolution that sees it not only as an economic necessity but a political statement, through the “Make in India” campaign, as well. If one leg of the campaign is investments and jobs, its other leg is quality.”

As we all know, bad habits are hard to break; pervasive, country-wide bad habits especially so; bad habits resident in 1.3 billion people quite possibly even harder to stem and reverse.

Robots the quality option?
Some Indian manufacturers have turned to robots as a solution for “chalta hai”.

Can an ever-growing legion of robot deployments make a difference, foster real change, set a standard?

The Royal Enfield Motors’ plant, near Chennai, thinks so. The plant installed four ABB robots in its paint shop and immediately reversed any quality problems. According to a Bloomberg piece the robot painters reduced paint wastage by half, painted four times faster than humans and never missed a spot. Success for Royal Enfield resulted with the installation of thirteen more robots.

The speed of the robots also increased productivity, which is another nagging problem facing the “Make in India” program. A study by theBoston Consulting Group on India’s growth and jobs concluded that labor productivity in “Indian factories is the worst among major economies, that Brazilians, who ranked second to last, are still three times more productive than Indian workers.”

Although robot deployments in India are up over 20 percent, the actual numbers sold, about 2600 according to the International Federation of Robotics, are miniscule for such a massive country. In comparison, neighboring China bought over 68,000 in 2015.

It’s difficult to imagine “chalta hai” and productivity as worries when theUnited Nations World Economic Situation and Prospects (WESP) 2017 report projects India’s economy to grow by 7.7 percent in 2017, and then 7.6 per cent in 2018. That’s the best economy in world! China has forecast 6.6 percent growth.

Making room for everyone…and everything
The report shows that India is buoyed up by massive consumption from a young, quickly expanding consumer base:  260 million middle-class citizens, 385 million millennials, with 50 percent of those numbers under the age of twenty-five. 

However, as the consumer base continues to increase, it will be more difficult for India to meet demand without automation. China is passing through that automation phase today, as witnessed by a colossal push for automation. India lags China’s need to increase quality and productivity, but not for long.

On the surface of things, the “robotization” of India may look anemic today, but, driven by the approach of massive consumption, that will change quickly. It’s reasoned that India is mirroring where China was a few years back.

 In fact, China has made great note of India’s rising consumer demand and also that wages are half that of China. As such, places like Sri City, an industrial park in India’s southern state of Andhra Pradesh, are seeing a rapid incursion of Chinese companies: Lenovo, Gionee, Vivo and Xiaomi have each put up production facilities in India over the last year. Another, Xi’an LONGi, will invest $225 million to set up a facility to make solar cells and components.

The Prime Minister, Shri Narendra Modi addressing at the inauguration of the Make in India Week, in Mumbai on February 13, 2016.

Apple’s Tim Cook was in India recently. With iPhone sales (69 percent of Apple’s revenue) flat in China since 2015, India may well become Apple’s new China. “According to the study conducted by Google and The Boston Consulting Group, from 2015 to 2020, the number of smartphone users inIndia will double, amounting to 520 million, or 39 percent of the country’s projected population.”

Fear of low-paying jobs being lost to robot-driven automation is somewhat mitigated at the sight of new these factories coming to stay. Eventually, these factories will also see robot workers as well, but that, according to recent studies, is a ways off.

A study by Metra Martech Ltd., an industrial analysis firm, “shows they [robots] help create more jobs than they eliminate from the assembly line. While displacing some types of jobs, robots also create new ones, like engineers to maintain and program them.”

All eyes on consumption
“They see that Indian consumption is going up,” says Ravindra Sannareddy, managing director of Sri City, “so they want to put factories in India, and also some of the people are coming to India to make in India and export because wage levels in China are going up.”

Domestic consumption plus exports! It seems India is where China was six years ago, which should please Prime Minister Narendra Modi and his prospects for a re-industrialization of India.

Such rapid growth potential was what interested Samay Kohli and Akash Gupta co-founders of GreyOrange Robotics, based in Gurgaon, to build robots for logistics. After studying multiple industries, the pair chose warehousing/logistics because “it seemed poised for the most growth in the years to come and the customer pain points were quite stark.” They were right. GreyOrange flourished quickly and now counts as customers the likes of Delhivery, DTDC, Flipkart, Aramax, Jabong and Kerry Logistics.

Chalta hai will not disappear tomorrow and robots have a long ways to go yet in automating Indian industry, however, the need for increased productivity to meet the consumer demands of a massive consumer base growing ever more massive will remain and grow more intense.

Similar to what has taken place in China, Indian consumers sooner than later will demand quality…or they won’t buy.

Indian consumers, especially the middle class, won’t care if its robots or human workers making good on their demands for quality products.

For now, its robots winning out in the war of quality, which will allow Adil Zainulbhai scant time to overcome the well-entrenched “chalta hai”