Making pharma SMEs globally competitive with technology

Manufacturing in India has emerged as the backbone for the growth of the country in the last few years, more so post-pandemic. While the growth of manufacturing has taken place across sectors, pharma has been a shining star that has made us pharma capital of the world. Strong domestic and export demand has resulted in increase of production, and large number of new manufacturing units have come up in the last three years. Large pharma giants in the country have done a bulk of production, but let’s not forget the role of SME as they contribute to one-third of our production.

SMEs are also growing at a decent rate of close to 10 per cent, but from a long-term point of view, they face the challenge of staying globally competitive as they don’t have economy of scale and the luxury of leveraging new technologies. Pharma SMEs face intense competitive pressures, and this has been increasing considering more and more new companies are getting production licences.

Increase in raw material prices has made the situation even more difficult, hence, reducing production cost and keeping plant capacity utilisation high have become the most important priorities for the business owners. Till now, 75 per cent utilisation has been considered good by SMEs, but this still means there is room to produce more with same resources.

The answer to all these challenges lies in making manufacturing smarter through adoption of digital solutions. All the SME pharma units are mostly automated with state-of-the-art equipment being used, but when it comes to the use of software, they are still lagging. Automation can only take them to a certain level, but to survive and thrive beyond that, SMEs need to have cyber-physical systems and adopt smart manufacturing solutions to further reduce costs and achieve greater efficiency. The future is about flexible manufacturing, where the output can be adjusted in no time as per demand and evolving market trends.

Digitalisation has potential to bring in exponential impact in reducing operational cost as the solutions can transform supply chain, boost productivity and improve manufacturing efficiency. There are plenty of Industry 4.0 solutions that can improve production planning, quality, compliance adherence, procurement, logistics and R&D. Some of the most common examples of these solutions are paper-less operations by recording shopfloor data, condition monitoring of critical equipment to prevent them from unwanted breakdowns and computer vision-based quality inspection of drugs to highlight defects and missing drug in the packaging. There are smart warehousing and supply chain solutions also that provide drug monitoring, theft security and movement-tracking capabilities. We are also seeing applications of AR and VR technologies to create better customer engagement, training of workforce and enabling remote guidance to workers.

In the last one year, it was observed that business owners are open to technologies but lack awareness and access to solution providers. While they also said budget as the other reason, talking about some of the low-cost and easy-to-deploy solutions brought them a positive perspective.

Awareness is the starting point where we need to ensure it’s not just the leadership who understands the digital world, but the whole workforce needs to appreciate the use of technology. Ignoring worker-level skilling is a huge miss we see in enterprises, and this is one of the big reasons of digital initiatives’ failures. Enterprises should also use digital maturity assessment tools to get an understanding of current gaps in digital infrastructure and use the learning to build a long-term roadmap for technology adoption.

Realising this gap, NASSCOM Gandhinagar CoE, a digital India initiative from the Ministry of Electronics and IT and Gujarat government launched a dedicated programme to help SMEs build digital capabilities in their organisations and provide hand-holding support to SMEs in the digital solutions’ deployment process. This is the programme which is open for all manufacturing units having revenue less than Rs 1000 crore who are looking to start their digital journey. Pharma SMEs can reach out  at SmartManufacturing@nasscom to know more about the programme and leverage the benefits to make their plants smarter, safe, efficient and productive.