“The number of humans that robots replace is not the formula for calculating ROI”

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Soni Saran Singh, executive director of NMTronics India Pvt Ltd

Automation is the next big industrial trend that will drive factories and production units. But a lot of questions about unmanned factory floors are yet to be answered, such as what will the capex and opex of such technologies be or will there be any major trade-off associated with such investments? Baishakhi Dutta of the electronicsforu.com network speaks with Soni Saran Singh, executive director of NMTronics India Pvt Ltd, to get the answers to these questions.

EB: How has your business in India been lately?
Business in India has been the greatest ever. The company has grown to almost eight times the size it was just two years back, in terms of the topline and bottomline.

Thanks to Prime Minister Modi’s Make in India initiative and the effective implementation of the Phased Manufacturing Programme (PMP) which has been initiated by ICEA (India Cellular & Electronics Association), we have seen an influx of mobile phone companies in the country. Business has really increased a lot and this is true not only for us—the overall market has improved tremendously. This is mainly because of the mobile phone market.

With regard to PCBAs (printed circuit board assemblies), the Make in India drive has led to a lot of Chinese companies are making considerable investments here. This is mainly in the northern part of India and also near Chennai. These two areas are the major manufacturing hubs of the country. I would say that Delhi NCR and Chennai will soon be equivalent to Shenzhen in China, in terms of manufacturing.

EB: Have you tied up with any new principals?
NMTronics and iNETest Technologies India Pvt Ltd together represent more than 40 companies worldwide—all of which are the top firms in their own technology segments.

Of late, we have tied up with Essegi Storage Solution, a company that provides intelligent storage solutions. For iNETest, we have partnered with SAKI primarily for automated optical inspection, since it is becoming widely accepted in mobile phone production.

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EB: What are the latest product lines you have added?
NMTronics has been always looking for new emerging technologies. The latest product line that we have added is for the camera module business. This is a complete product line, right from the PCB and the die attachment to the wire bonding, the lens assembly, the bracket and the tape. Korea has always been a leader in manufacturing cameras, so we have tied up with a company based there. Discussions with others are at an active stage. That’s one new business.

We have also forayed into the LED packaging business. So, these are the two segments that we have entered and I see great potential in both the product lines.

EB: To what extent do you think automation has become popular in India? Is anything holding it back?
There’s nothing holding it back. Automation will be the key to success in terms of efficiency for almost every industry. The electronics manufacturing industry, is now witnessing the emergence of cobots—collaborative robots that are going to work along with humans. But cobots are going to be very high-tech and quite expensive, therefore the ROI will always be a big challenge.

For the Indian manufacturing industry, low-cost robots are also going to play a very major role. Single arm SCARA robots have a great potential right now. We have supplied more than 100 robots to one of the leading mobile phone companies in India, which are being used for screw insertion, battery compression and RF testing. So, undoubtedly, going forward robots will be the key to success.

EB: Do you think the Indian industry is ready for unmanned shop floors?
This specifically pertains to Industry 4.0, where machine-to-machine communication will enable one machine to control the other. Only when this happens, will we have an unmanned shop floor. We need to have light on the shop floor for humans to see how the machinery is functioning. But when there are no humans, there is no need for light. That’s called a dark factory. India has a long way to travel before adopting the dark factory concept.

For our electronics industry, pick-and-place companies are going to be on top. Earlier, SMEMA (Surface Mount Equipment Manufacturers Association) had derived a standard for connecting conveyers and their flow from the machine of one manufacturer to another. Similarly, we are now at the stage where data ports are open for all the machines—you can see and collect the data but can’t control it. So, control is going to be the key point for effective machine-to-machine (M2M) communication. Besides this, the changeover from Product A to Product B is time consuming and leads to downtime. Every equipment company is looking to decrease the downtime to zero and thereby work towards a zero headcount. There are some surprises coming up from Fuji that will bring about a revolution in this industry.

EB: What is the estimated increase in capex and opex for a typical mid-scale automated manufacturing facility?
The manufacturing plants are becoming more efficient. When you talk about capex, more or less whatever the output, the cost of US$ 600,000 for an SMT line two years back remains the same today, but the speed and capacity have gone up dramatically.

On the other hand, when you look at the opex, machines are becoming very stable, with minimal manual intervention required. So, the capex is the same but the machinery is more efficient, and the operating expenses are going down.

But, when it comes to human resource costs, the biggest concern in India is that the labour won’t be cheap any more as the standard of living continues to increase, just as is currently happening in China. So, definitely, more automation is required and the industry needs to be a little more mature to accept these changes.

EB: What ROI does NMTronics present to the customer on the automation equipment that it provides?
There is no fixed formula for the ROI, for it varies from company to company. The ROI depends on the costing of any specific company and the level of automation being looked at.

However, it typically takes two to four years for any type of automated work floor to generate ROI. If you are only looking at calculating ROI on the basis of the cost of replacing humans with robots, then the ROI period will be very long. What you have to look at are the direct and indirect benefits of bringing robots to the production floor and introducing automation in any production line. That will really define the ROI. The number of humans that robots replace is not the formula for calculating ROI.

The number of manufacturing defects may go down as, once they are programmed, the robots do not tend to make any mistakes. But a human operator can make mistakes. In fact, an operator may also leave the company, and you will have to add some more operators and invest in their training.

EB: What are the maintenance requirements in a typical Industry 4.0 setup? What measures need to be taken to ensure zero downtime?
An Industry 4.0 setup is completely machine-to-machine. Regarding maintenance, there is actually no such thing as a necessity here. The machine remains the same. It is just a matter of how much data is being collected.

Industry 4.0 is basically bringing all the data into one place. I would say that Industry 4.0 will also lead to predictive maintenance based on the data collected. The Big Data that is captured from the machine is filtered and the errors are analysed so that they do not get repeated.

EB: Is security a concern in unmanned work places? How do companies address this issue?
Data security is a concern for the world right now. When yours is a single site, then data can be secured more easily. But when you have multiple sites and data is flowing via the cloud from one point to another point, then definitely there are a lot of breach points available for hackers.

When it comes to SMT machinery, basically, you are collecting SMT data and focusing on that aspect of the manufacturing process. This data is absolutely useless for a hacker, who won’t even understand the implications of the major defects being reported, the meaning of downtime, and everything else. Hackers are looking for data like credit card databases, the customer database, or the HNI (high net worth individual) database which they can get money out of. So SMT data won’t be of interest to anyone. However, the final product, like the iPhone, Samsung’s latest launch or that of any famous brand, and their production numbers—that data may be useful to somebody. But there are ways to secure this data.

EB: Are SMT players playing a role in promoting Industry 4.0?
SMT players are very active with respect to promoting Industry 4.0, and almost every machine is ready for the smart factory. Everyone is tying up with everybody. It is not that only one particular brand will work with the other, as there are multiple brands all over the world and everyone is gearing up to share data with each other. Data collection points, i.e., data ports are now getting opened up. You can collect my company’s data, but you can’t touch it. That is the key part here.

EB: Is there any upgrade in products to fit Industry 4.0?
Actually, there are no such upgrades. Almost every new machine coming into the market is ready for Industry 4.0.

EB: Are you of the opinion that modern manufacturing machinery can be set up within millions rather than billions? Any trade-offs?
Yes definitely – there are trade-offs. There are a lot of Chinese manufacturers offering very cheap equipment, but maintenance would be an issue. You can use a cheap phone and throw it away when it crashes. But you can’t do that with an SMT machine. So I would say that to make a quality product where a single defect can be life-threatening (for example, some mission-critical products for the defence, aerospace, medical or even automotive industry), compromising on quality for the sake of a better price is not a viable option.

However, it all depends on what you want to make with the electronics. Mission-critical products, the shelf life of which needs to be longer, require a lot of monetary investment in terms of testing; hence, paying more for quality machinery is preferable.

EB: The government has banked heavily on domestic mobile phone manufacturing. How do you view the NPE (National Policy on Electronics) 2019?
When you look at the Chinese business model, the government provides the building, the land and the dormitory for the workers. Manufacturers just need to bring in the machinery and start production. But in India, they have been using their own capital to buy the land, build the factory, etc. So they spend a huge part of the capital on infrastructure, which can become too much of a burden for them.

The NPE 2019 is like a subvention scheme for the land. You can pay the government in installments; so the burden on your own capital is reduced from the first day and you can focus on starting up production. That’s a major shift. Hence, I believe that a lot of investors and manufacturers will benefit from NPE 2019. The government’s intentions are very serious, which is the best thing about the NPE.

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