INTRODUCTION

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 1. Introduction

This chapter is a summary on what the Internet of Things and more

specifically the new paradigm of Industrial Internet of Things is all about, the
current state of Indian Manufacturing, why this research was undertaken and the
rationale behind it, what is the background and existing literature in this area of
study, what is the scope of study and the framework being followed.

a. Overview

The world is witness to evolving manufacturing capabilities in nations

globally which while further stimulating economic prosperity on one hand, is also
resulting in an increased focus on developing advanced manufacturing capabilities
on the other hand, using technology infrastructure. With the fast merging digital
and physical worlds, referred to as the world of cyber physical manufacturing,
advanced technologies are driving company- and country-level-competitiveness.
The trend is aided by ubiquitous and pervasive computing technology and
availability of data connection at high bandwidth speeds. Further there has been
profound growth and proliferation of end point IoT sensors which have improved
in terms of economy, miniaturization, power consumption, accuracy and digital
integration capabilities.

The Manufacturing sector in India is still not globally competitive (Deloitte,

2018) due to over emphasis on labor based production, lesser automation, legacy
manufacturing assets and production plants, energy inefficient systems and because
usage of Information Technology to integrate the physical and cyber world for
potential benefits which other countries have adopted (Rockstorm, 2018) is almost
non-existent.

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 There has been rapid and profound advancements in industry, technology
and applications, as a result of which many concepts have emerged in
manufacturing prominently Industry 4.0 which is a new revolution. These
technological developments with alter our lifestyle, workstyle and will bring in
unprecedented transformation in the way companies conduct business. This fourth
revolution is not considered an extension to the earlier ICT revolution, because of
its exponential evolution as compared to previous linear trends observed earlier and
the velocity, scope and impact in systems and processes. The achievement criteria
of Industry 4.0 is still uncertain in Indian context including the technology
roadmap .

Businesses in India are still struggling firstly to get a full overview of what
Internet of Things and Industry 4.0 is (Kumaran, 2015) and how it can really deliver
business value in a country like ours where penetration of Information Technology
is limited to transactional and compliance systems only (Berhert, 2016). Industry
4.0 is primarily driven by the adoption if IoT technologies in difference facets such
as assets, products or for customer facing operations.

Diety, Ministry of Information Technology, Government of India has

drafted a master plan for IoT adoption and introduction in the Indian context and
develop IoT based industries. As per the report IoT industry is expected to evolve
to USD 15 billion by 2020 in all possible business domains with focus in areas of
Smart cities and supply chain.

Industrial IoT as compared to consumer IoT has its own set of unique
challenges including the volume of data generated from machines, heterogeneity
of objects and there data interactions required between the machines in the supply
chain, further the environment experienced by Industrial deployments are highly
corrosive, submerged in liquids, explosive and combustible. IIoT systems must be
scalable for hundreds of endpoints and midpoints and are spread over thousands of
meters thereby they require hardware that can perform analytics and device level
and transfer aggregated information more than raw data.

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 This research work contributes to existing literature in IoT adoption both in
theory and practice and provides insights to manufacturing concerns relating to
adoption of IoT technologies in their business processes.

b. Internet of Things and Industry 4.0

The term Internet of Things has its original to Kevin Ashton as early as
1999, when he proposed that objects of the physical world could connect to each
other in the Internet using sensor modules (Karen Rose, October 2015). Internet of
things is fast poised to become the next biggest technological disruptor after the
Internet (Atzori, 2010).

The Internet Architecture Board (IAB) describes “Internet of Things” (IoT)

as a trend where a large number of embedded devices employ communication
services offered by the Internet protocols (Tschofenig, March 2015).

A few contradicting definitions in terms of interconnectivity also appear

where connectivity across internet is not mentioned specifically on one hand
(Telecommunication Standardization Sector of ITU, Jun-2012), while internet
connectivity to cloud is also mentioned in the Oxford University definition on other
hand.

The first three phases of Industrial revolution involved mechanization,

electricity and information technology. The first industrial revolution brought
mechanical innovation and steam power based on coal powered combustion engine.
The second industrial revolution stated in later of the mid-century (1950’s) and
introduced oil powered and electrical communication resulting in electrification of
the manufacturing factories and assembly lines. The third industrial revolution in
1980 brought computerization in the form of main frames, personal computers and
then the internet. Industry 4.0 is a logical evolution of the earlier three revolutions.
Industry 4.0 is the powered by the advent of connected and includes cyber physical

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systems (Hermann, 2016), the Internet of Things (Jasperneite, 2012), cloud
computing (Kagermann, 2013) and cognitive computing.

Industry 4.0
•Cyber Physical
Industry 3.0 Systems
•Electronics •IoT Sensors ,
Industry 2.0 •IT Smart Objects
•Electricial
Industry 1.0 •Mass Production
•Mechanical
•Steam and Water

FIGURE 1 STAGES OF INDUSTRIAL REVOLUTION

Operational technology (OT) refers to software based monitoring and

recording change in measurement of physical devices, it is commonly referred to
as Industrial control systems(ICS) which includes the components- PLC, SCADA,
DCS, RTV, CNC systems and embedded systems for supervisory control and data
acquisitions. Traditionally manufacturing companies in India and their assets have
operated in isolated silos and in very few cases have achieved integration between
the manufacturing system network and their digital system networks which is the
starting point. However this limited focus of advances in manufacturing efficiency
takes place on the individual firm rather than on the whole supply chain.
Independent advances in process level such as lean manufacturing, six sigma,
process statistical control limits, material level robotics have led to significant but
isolated level of gains in terms of efficiency and quality. OT networks used
proprietary protocols e.g. DNP, ModBus and PROFIBUS which are byte oriented
protocols. In all of these security is low because of the standalone nature of OT
systems planned originally. However now with the demand to interconnect, this
has become a major hurdle.

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 Confidentiality Integrity Availability

FIGURE 2 PRIORITY IN IT SYSTEMS

Availability Integrity Confidentiality

FIGURE 3 PRIORITIES IN OT SYSTEMS

Industry 4.0 will be marked by several major digital innovations sensors,

cloud, robotics, AI, sensors, cloud, 3d printing embedding all in a interoperable
supply chain which can be used in a shared services model (Reinhard, 2017).

This isolated development will only result in some companies who can
invest in technology having extremely efficient supply chains while their vendors
and customers in the supply chain will have inefficiency and delays (Christopher,
1998) (Pettersson, 2008).

Some authors have tried to define a criterion for achieving Industry 4.0
along with the technology roadmap (Jian Qina, 2016) while some have proposed
how it would be necessary to sustain and create out industrial value in products
leading to sustainable manufacturing using the ubiquitous information and
communication technology (ICT) infrastructure (T.Stock, 2016). Kolberh and
Zuhelke(2015) have added the third most important dimension of bringing
efficiency in supply chain and manufacturing operation using “Lean Automation”
which is a combination of Lean Production (Ōno, 1988) and Production
Automation techniques. Lean Production contributes faster reaction, on changing
market demands, applying the concepts of smaller batches and transparent plus
standardized processes to mass and batch production (Womack, 2007) (Ōno, 1988).

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 As per a Grant Thornton (Grant Thornton and CII, 2017) report India ranks
a poor 91 in the Networked Readiness Index 2016 (World Economic Forum)
despite political and regulation framework improvements. This is due to the fact
that other countries are moving ahead faster and lack of infrastructure, low skill
levels has created a deeper divide. The following table shows the traditional
concepts of lean production applied to Industry 4.0 and the changes required
therein.

INDUSTRY 4.0 LEAN PRODUCTION

JIT (Just in Time) Jidoka

Connected Operators Operators get Failure information on

information on wearable or mobile
inventory levels devices

Sensing and Transmitting Built in Kanban

Products transmission systems

IoT enabled Machines Directly interface with Failure reporting ,

Kanban systems proactive alerts

Planning Real time stock Real time machine

performance

FIGURE 4 INDUSTRY 4 FITTED TO LEAN PRODUCTION

c. Indian Manufacturing

The world is witness to evolving manufacturing capabilities in nations

globally which further stimulating economic prosperity is resulting in an increased

7
focus on developing advanced manufacturing capabilities using technology
infrastructure. With the fast merging digital and physical worlds or cyber physical
manufacturing world, advanced technologies are driving company- and country-
level-competitiveness.

The Manufacturing sector in India is still not globally competitive (Deloitte,

2018) due to over emphasis on labor based production, lesser automation and even
lesser usage of Information Technology to integrate the physical and cyber world
for potential benefits which other countries have adopted (Rockstorm, 2018).
Challenges in India are extreme climates ranging from high temperature to cold
conditions, rainfall to desert, high level of dust, limited cleanliness, inadequate
telecom network coverage, issues with security and privacy, business models which
are more reactive and benefits which should be affordable to the billion plus
population.

With rapid advancements in the way business work and envision growth,
technology and business related digital applications, many concepts have emerged
in manufacturing prominently Industry 4.0 which is a new revolution. The
achievement criteria of Industry 4.0 is still uncertain in Indian context including
the technology roadmap . Businesses in India are still struggling firstly to get a
full overview of what Internet of Things and Industry 4.0 is and how it can really
deliver business value in a country like ours where penetration of Information
Technology is limited to transactional and compliance systems only (Berhert,
2016).

Traditionally manufacturing involved converting raw materials or

assembling materials to produce a finished goods or assembly using manual or
machine based methods. As defined by New England Council and Deloitte,
advanced manufacturing can be sectoral based such as aerospace, medical and
pharma etc. which have diverse volumes, scale of economies and use of technology
as compared to the traditional industries.

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 TABLE 1 GLOBAL MANUFACTURING COMPETITIVENESS INDEX 2016

Ra Count Index Ra Countr Index

nk ry Score nk y Score
(100
High)

1 China 1 7 Taiwan 7
00 2.9

2 USA 9 8 Mexico 6
9.5 9.5

3 Germa 9 9 Canada 6
ny 3.9 8.7

4 Japan 8 10 Singap 6
0.4 ore 8.4

5 South 7 11 India 6
Korea 6.7 7.2

6 UK 7
5.8

d. Advanced Manufacturing

Traditionally manufacturing involved converting raw materials or

assembling materials to produce a finished goods or assembly using manual or
machine based methods. As defined by New England Council and Deloitte,
advanced manufacturing can be sectoral based such as aerospace, medical and
pharma etc. which have diverse volumes, scale of economies and use of technology
as compared to the traditional industries.

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 Thareja and Priyavrat (2006) has defined Advanced Manufacturing
facilities as one which integrates high tech machines with process, systems and
technology to facilitate manufacturing based on product substitution or new
product development.

Advanced manufacturing utilizes and applies technology, process and

methods to create new product designs and efficient production (Ting, 2016).

There are three primary facets to advanced manufacturing (PCAST, April

2010):-

 Product Technologies: Advanced manufacturing should be

able to manufacture products which are of complex designs, technologically
advanced, innovative, reliable and low cost, and solve societal problems.
Hence manufacturing advancements in construction engineering for
example have resulted in lower costs and reducing construction time, or in
agriculture manufacturing has improved productivity with given
constraints.
 Process Technologies: Advanced Manufacturing should
use computer technologies like CAD, CAM for design, High Performance
Computing for simulation, Rapid prototyping using additive technologies
like 3D printing, Robotics and intelligent production system powered by
IoT or sensor networks, control systems and help custom manufacture
products.
 Management Methods: Use of quality controls, lean
production methods and supply chain integration with advanced planning
throughout the supply chain from vendors to customers.

Ducker Worldwide ( DUCKER Worldwide, 2014) in its report titled

“Manufacturing in India” shows that India is now starting to move away from Agro
based traditional manufacturing to high precision-tools aided by the increasing
sophistication of the work force , embracing new technologies , adopting automated

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and intelligent machines and the advent of foreign technology and investments in
India.

As per Ministry of Economics (2015) , Indian Manufacturing sector could

grow to $1 trillion by 2025 or a six fold growth from present, however today as per
Academic Foundation report (Academic Foundation, January 2008) 45 million jobs
or 80% of the workforce is employed in the unorganized sector or small enterprises.
The share of micro and small enterprises in manufacturing employment is 84% for
India versus 27.5% for Malaysia and 24.8% for China (Exim Bank, 2013).

However the Indian advantage of people and technology makes it more

likely that it will become a hub for Advanced Manufacturing facilities in the
coming few years.

e. Industrial Internet of Things

There are two distinct applications of IoT namely in domestic and industrial
usage. Industrial internet of things refers to the following four dimensions:
Connected Manufacturing, IoT enabled products, robotics controlled operations
and monitoring and control systems for non-core operations. Powered by
ubiquitous computing and connectivity, heterogeneous devices with proprietary
protocols are getting integrated using common set of standards to provide
automated solutions. Initially RFID based solutions were deployed as part of IoT
solutions but they faced inherent challenges in terms of range and data transmission
capability (Atzori L, 2010) (Miorandi D, 2012). Industrial IoT has significant
benefits such as improving employee’s safety, increasing productivity and
enhancing efficiency of operations (Hung, 2017). Application of IIoT must be
prefaced by proper understanding of the business domain problem, agreement on
business objectives, creation of a roadmap and having strategic vision and intent.

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 What are Vision and
Identify
the Roadmap Update Implement
IoT use Pilot Trials
business for IoT Roadmap Projects
cases
objectives adoption

FIGURE 5 PLAN FOR IOT ADOPTION

The IIoT technology adoption varies across industry and integration of IoT
technology will have different adoption techniques usually defined by the IoT
architect. The key architectural components are as defined below.

Smart
Objects-
Assets,
Products

Enterprise Gateways

IIoT
Blueprint

End Point
devices/
Cloud
Fog
Computing

FIGURE 6 IIOT-COMPONENTS

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 f. Manufacturing Sector dynamics

In this section we will explain the dynamics faced by a process and discrete
manufacturing organization using a case study method. The operations of a global
manufacturing unit of flexible packaging films was undertaken for this study
(Ramakrishnan, 2016). The manufacturing process can be either made to stock or
made to order. Made to stock orders are fulfilled based on set of predefined
constraints or requirements predicted through usage or order historical trends or
sales forecast. The major difference being that in case of made to order, each
confirmed order is assigned to a production batch run (Zuyderduyn, 2011). Made
to orders are custom made as per order specifications. Generally manufacturing
companies adopt a mix of both strategies, however it becomes difficult to match
outstanding inventory with new orders due to inventory traceability issues which is
one areas addressable by IoT (Ramakrishnan., 2017).

For each product to be manufactured, in process manufacturing batches and

recipes with formulations have to be defined. Each batch run picks up defined
formulation, draws input either manually or throw automated systems like flow
meters or dispensers and processes them using manufacturing assets powered by
electrical and mechanical energy generating a set of main products, bye products,
invisible losses and waste products. The net sum on inputs of material remains same
as the output of materials by weight. In this case study we observed that material
moved from stores to the plant for processing in batches, automated silo dispenses
kept track of the quantity and material type being fed into the process plant. Here
again there are significant issues of inventory plus risks of production outages due
to inventory shortfall or wastage of inventory, IoT again can play an important role
by using sensor equipped IoT controlled flow meters and dispensers so that each
unit of raw material can be tracked and accounted for. Also energy tracking and
utilization can be accounted for using IoT based Smart Metering infrastructure.
Further with connected process plants, data on plant performance can be directly

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sourced to IT systems for further analysis. The major components of the flexible
manufacturing plants are show cased below:

Sales Order (External

Made to Order/
Winder/ Recyler Primary Slitter
Internal Made to
Stock)

Raw Material Material Monitoring-

Secondary Slitter
Purchase Input Output Waste

Material Issue to Metalliser/ Chemical

Energy Monitoring
Process Treatment

Formula/ Recipe for Process Batch Dispatch /

process Creation and Run Warehouse

FIGURE 7 FLEXIBLE PACKAGING MANUFACTURING PROCESS

Stages of Process IoT Enablement

Sales Order Booking IoT enabled auto replenishment based on sensors

at customer location, virtual or physical consigned
inventory locations

Raw Material Issue Flow Meters or IoT enabled dispensers

Formula Recipe IoT integration with PLC for dynamic recipe

configuration in the plant machinery

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 Process Batch Run IoT and M2M integration to get data from the batch
process using integrated PLC or Scada systems – IT-OT
integration

Energy Management Automated Metering Infrastructure with Smart

Meters and IoT enabled data transmission

Inventory IoT enabled inventory tracking systems – RFID or

Management between BLE beacon powered with proximity controls
process steps / Logistics
dispatch

g. Research Gap

A thorough review of literature shows a gap in the understanding of the

preparedness of Indian manufacturing industries from IoT (Consumer products),
IIoT (manufacturing operations) and Industry 4.0 (overall strategy) adoption, a gap
between recent industry and achievement of Industry 4.0 (Quin, 2016). None of the
current existing models or Literature have covered all the dimensions of IoT
adoption. Some have focused on technology – Core Systems while others have
generalized of management aspects – Strategy , Lean Operations The Indian
Manufacturing structure is different – Lower Collaboration , Less Data
Transparency , Limited Data Driven decisions , more spending on OT than IT,
Infrastructure issues even at connectivity levels , manual driven operations

Specific details and limitations of the below popular models are

summarized below.

 IMPULS- In this six dimension model the following aspects

or dimensions are constituted, along with the minimum requirements:-

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 o Smart Factory covering Digital Modelling ,
Equipment’s Infrastructure, Data Usage and IT Systems
o Smart Operations covering Cloud usage, IT security,
Autonomous Process, Information sharing
o Smart Products- ICT add ons, Data Analytics
o Data driven services – Share of revenues and share
of data usage
o Employees – Skill acquisition, Employee skill sets
o Strategy and Organization covering strategy ,
investments and innovation management.
The respondents are divided into Level 0 or outsiders who have done little
for adopting Industry 4 to Level 5 who are leaders. This model was
developed by the IMPULS Foundation of the German Engineering
Federation (VDMA).
Though fairly exhaustive the financial feasibility, process and
overall of IT into multiple areas seem missing.

 PwC: They have undertaken a comprehensive research into

the state of Indian adoption of IoT and Industry 4.0 (PwC, 2017) where only
27% of Indian Managers feel their organizations are adopting IoT but 65%
expect to reach there by 2020. The enabling factors have been divided into
three steps:
o Digitization and integration of digital horizontal and vertical value
chains.
o Digitization of product and service offerings
o Digital business models and customer access

The enabling technologies are Mobile devices, IoT platforms, Cloud

computing, location technologies, AR/VR, wearables, smart sensors,3d printing,
big data, customer segmentation and HMI.

PwC have divided their Industry 4 maturity model into main dimensions:

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 o Business Models , Product & Service Portfolio
o Market and Customer Access
o Value Chain and Process

Aspects such as People and organization is sparingly covered while IT and

Financial feasibility is also not segregated.

We list the following explicit gap statements motivating our research:

 “The relationship between existing factors such as stability of traditional IT

systems, process maturity, people and management capabilities as a factor
influencing successful adoption of IoT projects in Indian Manufacturing has
not been quantified”.

 “The results and extent of utility post adoption of IoT/IIoT in Indian

Manufacturing systems are not quantified using a before and after analysis”.

 “The progressive steps or the next maturity steps indicators for an

organization adopting a step wise approach to IoT adoption is not defined”.

h. Rationale for the study

Literature has shown in similar context that that evaluation of programs and
progress in possible using capability maturity models (Kenneth, 2017). The
capability maturity model originated as a framework developed by Carnegie
Mellon University to improve its process for developing computer software (Paulk,
2009). The model includes a self-assessment that presents the organizations best
practices in a key progress area and then shows how it can redefine its capabilities
as it involves to more mature state. (Paulk., 1993).

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 Analytical methods or normal based models can help improve reliability of
capability assessments (Rauffet, 2010).

Adoption of IoT in Indian context challenges has been discussed

comprehensively using MCDM techniques in an earlier literature (Luthra, 2018).
Predominant are high project cost issues (Granjal, 2015), talent issues (Bedekar,
2017 ) , issues with security (Gubbi J. R., 2014) and privacy (Whitmore, 2015),
business model challenges (Whitmore, 2015) , infrastructure challenges (Botta,
2016) , lack of standards (Al-Fuqaha, 2015) and internet connectivity issues
(Bedekar, 2017 ).

The objective of this study is to define an Internet of Things Maturity Model

(IoT-MM) which can be used by organizations to assess their current status. Indian
manufacturing has started adopting IoT but in a disoriented manner, with adoption
being guided more by technology consideration than a holistic business drive and
consideration encompassing the benefits of productivity, energy conservation and
environmental management.

The first step towards moving towards Industry 4.0 is to access the
readiness or capabilities. However technology roadmap of achieving Industry 4.0
is still not clear in industry or academia (Jian Qin, 2016). Maturity models are
commonly used as an instrument to conceptualize and measure maturity of an
organization or a process regarding some specific target state (Schumacher, 2016).
Maturity can be captured qualitatively or quantitatively in a discrete or continuous
manner (Kohlegger, 2009). Maturity refers to an organizations capability to bring
in continuous improvements and are generally qualitative with consideration of
technology, process, people or management structures. Maturity models can be top
down or where predetermined stages of steps are fixed and then using data and
cases it is corroborated. While in case of a bottom up model, individual items are
characterized first and then grouped together to give a generic view. Maturity
models cover a range of topics not limited to technology management, project
management, change management, quality management, knowledge management,
management of supply chain functions and human resources.

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 Many of these standards are defined in the ISO/IEC e.g. ISO 15504 for
information technology process assessment, and contains reference models for
defining dimensions e.g. in this case capability and process dimensions. It also
provides guidelines for assessment, including multi point scaling for ranking
different attributes. Assessments includes team identification, planning the
activities, data collection and validation, and process rating and reporting as the
action steps. We define further below a maturity model for IoT adoption with
appropriate dimensions, scaling and ranking attributes.

According to sources adoption of IoT enabled Industry 4.0 can lead to

decrease of production costs by up to 30%, logistics costs by 30% and quality
management costs by up to 20% (Thomas, 2016).

A literature review on similar study was done using 268 German companies
for their IoT enabled Industry 4.0 readiness in terms of 6 dimensions (Verband,
2015) namely:

 Strategy and Organization

 Smart Factory
 Smart Operations
 Smart Products
 Data Driven Services
 Human Resources

As of 2017, in Germany as per above survey, 56.1% of German companies are not
Industry 4.0 ready and only 20% have started pilot runs. As less as 8 companies
from the sample have reached a maturity level across all six dimensions. As an
example SEW Eurodrive has benefited using the implementation of IoT concepts.

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 Table 2 Existing Maturity Models for IoT
Model Name Promoted By Method

IMPULS – VDMA, RWTH Aachen, 6 Dimensions,

Industrie 4.0 Readiness IW Consult 18 Items , 5 Levels
(2015) (K. Lichtblau V. S.,
2015)

Empowered and Lanza et al. Process Model

Implementation Strategy for Industry 4.0
for Industry 4.0 (G. Lanza
P. N., 2016)

Industry 4.0 / PricewaterhouseCoopers 6 Dimensions , 4

Digital Operations Self- Levels
Assessment (2016)

The Connected Rockwell Automation 5 Stage

Enterprise Maturity Approach , 4
Model (2014) Dimensions

i. Indian Manufacturing Shortfalls

Indian manufacturing has been for long plagued by infrastructure

deficiencies and outdated systems, machines and processes.

With the help of Make in India drive, India is on the path of becoming the
hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba,
and Boeing have either set up or are in process of setting up manufacturing plants
in India (IBEF, 2017) leading to a Cumulative Foreign Direct Investment (FDI) in
India’s manufacturing sector reached US$ 70.51 billion by June 2017.

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 The manufacturing sector of India has the potential to reach US$ 1 trillion
by 2025 and India is expected to rank amongst the top three growth economies and
manufacturing destination of the world by the year 2020. The implementation of
the Goods and Services Tax (GST) will make India a common market with a GDP
of US$ 2 trillion along with a population of 1.2 billion people, which will be a big
draw for investors.

With impetus on developing industrial corridors and smart cities, the

government aims to ensure holistic development of the nation. The corridors would
further assist in integrating, monitoring and developing a conducive environment
for the industrial development and will promote advance practices in
manufacturing.

The structural transformation of the Indian economy over the last three
decades has been spectacular growth of the services sector, which now accounts
for about 50 per cent of the GDP. However, the rapid growth of the services sector
much before the manufacturing industry attaining maturity is not a healthy sign. A
knowledge-based economy cannot be sustained in the long run unless it is
adequately supported by a growing manufacturing economy.

As per WTO (2016), international trade with over 70 per cent of the seven
trillion dollar market being in processed manufacturing, it is necessary for India to
develop global competitiveness in the manufacturing sector.

To understand how Indian Manufacturing fares overall in the global

landscape and see the key determinants we have used two scientific and reputed
project reports from AT Kearney (Mathur, 2015) and Deloitte Global (Deloitte
Global, 2016).

As per AT Kearney (Mathur, 2015) report India faces several challenges to

become world class in manufacturing and has prescribed a roadmap of steps which
would alleviate Indians Manufacturing competitiveness. The key findings are
detailed below

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  The GDP in India is around $2.3 Billion (world’s ninth
largest) and the purchasing power parity is $8 Billion (world’s third largest).
However manufacturing accounts for only 16% of the GDP as compared to
services at 52%. Worst still India accounts for 2% of the world’s
manufacturing output as compared to China at 20%.
 India has the advantages or strengths of a large engineering
talent pool, young work force, low wages and a huge domestic consumption
of finished goods. There have been some very limited global state of the art
ventures in the manufacturing which are technologically advanced like
Bharat Forge.
 As per AT Kearney’s proprietary GEO framework , 60% of
Global Manufacturers are better off than Indian (expect for the Pharma
sector) one reason being that due to low labor rates operational excellence
has never been emphasized or worked upon. The leading countries are US
and Western Europe followed by Korean and Eastern Europe and then
China in the first three quadrants.

The analysis shows that three elements primarily needs to be worked

upon to improve India’s manufacturing competitiveness.
 Low Productivity the challenge being all Indian
manufacturing process are labor intensive.
 In Efficient Supply Chains to some extent because of
Infrastructural and transport bottlenecks, but primarily due to increased raw
material and finished goods inventory. Agile companies need to reduce
wastage and carry less inventory.
 Lower Levels of Supplier Competence this is deep rooted
and the focus should be on making lean factories and building quality in
designs at a low cost which all suppliers can afford without making huge
structural changes or manpower mobilization.

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 Deloitte Global (2016) Report on Global Manufacturing
Competitiveness Index across multiple countries has shown that China stands
number one in the list of competitive manufacturing nation today with a neck
to neck competition with US followed by Germany. India is still ranked a poor
11th, the report also throws considerable insights as below

 The most critical drivers for global competitiveness as per

survey of manufacturers are cost competitiveness, productivity and supplier
network efficiency.
 The top manufacturers with a futuristic vision have fully
converged the digital and physical worlds. Adoption of a combination of
advanced hardware combined with advanced software, sensors, and
massive amounts of data and analytics is resulting in efficiency and
disruptive practices leading to evolution of smarter products, processes, and
more closely connected customers, suppliers, and manufacturing.
 Future competitiveness will be driven by Predictive
analytics, the data for which will be provided by the Internet-of-Things
(IoT), along with both smart products and smart factories via Industry 4.0,
as well as the development and use of advanced materials will be critical to
future competitiveness.
 Manufacturing innovation i.e. shifting to higher value giving
products, in turn powered by advanced manufacturing technologies will
dominate cost considerations alone. This innovation will be powered by
data, collaborative ecosystems and R&D.
 Advanced manufacturing technologies rated highly are
Smart Connected IoT products, Smart Factories (IoT), predictive analytics
and additive manufacturing (3D printing).
 Sixty two percent of the global manufacturing executives
find India to be highly competitive on costs and labor skills but need to
work on its infrastructure and technology adoption.

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 According to a report from IBEF (IBEF, 2018), the Government of India is
aiming at increasing the contribution of manufacturing output to 25 percent of
Gross Domestic Product (GDP) by the year 2025, a significant raise from the 16
percent currently. This will be predominantly driven by IoT, which is one of the
most important aspects of Industry 4.0 for India. IoT is expected to capture close
to 20 percent share in global IoT market in the next five years. According to IBEF
forecast, the IoT market in India is projected to grow at a CAGR of more than 28
percent during 2015-2020.Indian Manufacturing ranks very low in terms of global
manufacturing competitiveness. The manufacturers need to embrace Industry 4.0
powered by IoT technology to remain an attractive destination for investments and
for the growth of manufacturing.

Though a lot of work has been done on IoT technologies and utility
worldwide along with adoption in countries like China and Taiwan, the study
relating to its adoption in Indian manufacturing setup has been largely neglected.
This is primarily because we had the cost advantage due to a huge skilled labor
resource pool so technology adoption and process improvements were
marginalized.

The IoT technology can have positive impact on Indian manufacturing

thereby making us competitive world wide. IoT applications must incorporate the
characteristics specific to Indian manufacturing to facilitate adoption which are
lowering of manufacturing unit cost, enhancing competitiveness, ensuring quality,
ensuring compliance and consumer need fulfillment.

The missing link in research is the starting point for a manufacturing

enterprise to move towards “Industry 4.0” and for which the key questions to be
answered are as follows:-

 How do we determine if a candidate firm is ready to move

towards IoT enabled Industry 4.0 or Smart Manufacturing and what would
be the building blocks prior to this movement?

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  Understand through ground assessment if firms transitioning
towards IoT technology adoption have benefitted from the process by
having a positive impact on the key determinants of global manufacturing
competitiveness as described by literature review and validated by expert
assessment.

Further it is necessary to see if the IoT adoption has been in the right
direction and not ad-hoc technology adoptions , the main factors of
manufacturing competitiveness are as below:

o Supply Chain Efficiency

o Adding Value to a Product from commodity to
specialization
o Productivity Management at operations and shop
floor

 Understand if IoT can be deployed in a profitable manner by

adopting business models since new technology may not guarantee
economic returns (Brody & Pureswaran, 2014). Further check awareness
and construct wise advantages experienced, through a survey, of Indian
manufacturing organizations as per an adequate sample size. This survey
will also highlight the current status of adoption of IoT/IIoT in Indian
Manufacturing and validate whether our roadmap is appropriate for
adoption.

j. Research Motivation

Traditionally Indian post-independence has seen a lot of changes especially

after the economic reforms (Mitra, 1998) were introduced (Unel, 2003). Numerous
business articles and scholarly research has shown potential of India (Reddy, 2009)

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to become a world leader in Manufacturing since the last decade (Rodrik, 2004)
(Hulten, 2005) (Bosworth B. S., 2007). However it remains to see that we are
almost at the end of this decade but still having the same issues and hence lagging
behind other new economy countries like China (Bosworth B. a., 2007) which has
now become a world leader or traditional manufacturing giants like EU and US,
which existed in the last decade also (Dangayach, 2001).

The need of the hour and also the government focus in India is now IoT
driven Industry 4.0 adoption on a mass scale for manufacturers (Swarnangini, 2017;
Kashyap, 2016).

Our research motivation comes from the researcher’s observation that many
Indian firms are still at a very lower level of IoT adoption in India and are generally
not clear in the roadmap, approach of the entirety of the adoption pattern to be
followed (Ramakrishnan R. G., 2017).

k. Research Questions

Since the study aims at developing a roadmap for IoT adoption/enablement

in Indian Manufacturing organizations, we refer to technology road-mapping
(Loureiro, 2010) a technique widely used in the different areas towards the
development of long term planning strategies, thereby allowing market alignment
as per business objectives, product and technology over a short or long time
horizon. Technology roadmaps are important to manage the future of innovative
technologies similar to forecasting what is possible (Kappel, 2001).

• The Use of a Technology Road Map enables Improved

alignment between strategic objectives and technology management
(Carvalho,2012)

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 • The Use of an IoT Road Map will help Improve India’s
rating in the Global Manufacturing Competitiveness Index (Deloitte, 2016).
The measures identified through a systematic survey of literature are as
below:

• Cost Competitiveness of the ability to generate more

at a lower comparative cost while improving or keeping quality
parameters constant.

• Productivity or the ability to utilize time and

resources to produce more qualitatively and qualitatively.

• A well developed, robust and mature Supplier

Network or the ability to have suppliers and tie ups with them to
ensure supply in close to real time thereby reducing inventory levels.

• The ability to Use Advanced Technologies – IoT or

AI

• Roadmaps are used to identify and showcase the objective

to be achieved in the future and answer the set of questions “why-what-
how-when” in order to develop the action plan and achieve the goal
(Albright, 2003). Technology roadmaps have become crucial as they link
technologies, products and markets leading to innovation (Rinne, 2004).

• R1 what we are and what we want to become–

This involves market competency assessments and desirable
applications. We plan to formulate a Self-Assessment Tool /
Maturity Model for this part showing the different progressive
Levels (Loureiro, 2010)

• R2 When do we go there – Different action items

are required to be done at different times including development,
resource allocation, investments and migration (Loureiro, 2010).

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 • R3 How do we reach there – Checklist of things or
direction of plans including challenges, architecture and solutions,
action plans and risks (Loureiro, 2010).

• R4 what is the benefit of reaching there/Why –

This defines the broad scope of the roadmap and is done through
Validation through case study (Loureiro, 2010).

• R5 what are the challenges faced in implementing

an IoT project.- In this based on survey responses we derive an
abridged version of technology acceptance model for IoT projects.

l. Research roadmap

The research roadmap given below shows the steps we are following in the
research process, in a 11 stage process starting from literature review to validating
the benefits of the IoT adoption in terms of influencing positively the factors
affecting global manufacturing competitiveness index.

Using Delphi Interview and

Identification of Abstract
Using AHP assign weights to supporting Lit. identify Using Expert Survey choose top
Constructs which influence IoT
the constructs` measurement variables in each 5 Variables
Adoption in an Enterprise
construct

For each variable identify the

possible states in multiple Non Prepare a Excel Tool giving
Test the Tool in 9 organizations
IoT/ IoT organizations – Expert weights to Project- Constructs , Suggest a 5 Level Maturity for
at different level of IoT
Interviews and Observations . Current-Variables State of the each construct (R2)
Maturity
Group them into 5 states per states identified above. (R1)
variable

Validate the benefits for the

Prepare a RoadMap Graphical Identify the success factors and
top 5 constructs with > 10%
tool for the timeline wise challenges for implementing
weights by comparing before
action items(R3) IoT
and after scenarios

FIGURE 8 RESEARCH ROADMAP

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 The research process was divided and conducted in phases as follows, each
of which has the inputs from the previous phase and worked on adding further
values to the input from previous stages:

STAGE A: Identifying the determinants of manufacturing

competitiveness and the factors affecting IoT adoption in an enterprise using
existing models.

 Identification of key factors which increase manufacturing

competitiveness as derived by secondary literatures which were survey
report findings globally conducted by reputed agencies. These point
distinctly to moving towards digitization and smart manufacturing.
 Identifying constructs or abstracts listed above which
influence IoT adoption in any organization. This is done from existing
models and highlights a set of 9 constructs namely Strategy, Machine Data,
Assets, Products, Process, IT Landscape, People and Financial feasibility.
Literature review in subsequent sections have shown that these influence
IoT adoption in any organization in one way or other.

Identify
Manufacturing Identify
Literature Review Literature Review
Competitiveness Constructs
Index Factors

FIGURE 9 STAGE A SEQUENTIAL STEPS

STAGE B: Assigning weights and ranks to these factors using AHP

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  Identification of the factors which are necessary from the
technology prospect and process prospect to adopt Industry 4.0 in the
previous section need to be validated by experts.
 The AHP analysis by 10 experts well aware of all the
constructs helped rank them with percentage weight using pairwise
comparison.

Factor Expert Eperts Consent AHP

Identification Identification Participation Administration

FIGURE 10 STAGE B SEQUENTIAL STEPS

STAGE C: Identifying the measurable variables inside each construct,

the top 5 to form a tool for measurement of the maturity.

This was done using Delphi interviews surveys with 15 experts , an initial
list of variables against each construct was shared with them and open
questionnaire was given to help them add more variables they felt was relevant.
They were required to give a one line justification of why it was required. Once the
replies were received the list was consolidated from all participants and send back
to each participant to allow them rank the top 5 variables. Once the ranked variables
were received a group ranking was derived and a consolidated list was shared with

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each respondent showing his ranking and the group ranking allowing them to revise
their individual rankings to suit the group rankings. This iteration was done three
times till the final list of to 5 variables were prepared.

STAGE D: Post identification of ranked variables the weights were

assigned as per their ranks.

It has been assumed that the placeholder value of the variables decide their
ranks. The ranks were used for preparation of the excel tool for determination of
current IoT maturity of an enterprise.

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 STAGE E: Observation and Interviews for identifying possible states
for each state.

In this section around 9 organizations at different levels of IoT adoption

starting from no IoT adoption to advanced IoT adoption was selected to evaluate
the excel tool. Using a mix of interview methods, observation methods and
secondary data it was figured out how the organizations have progressed to their
current state and what all projects were undertaken with an objective to adopt IoT,
move towards Industry 4 and capabilities or enhancement benefits reaped as a result
of a successful IoT project adoption and implementation.

STAGE F: Preparation and Testing of the excel tool and preparing the
Roadmap tool.

In this section an excel tool was made which had three different sections.
The first section captures the demographics of the attempting organization. The
second section aims to capture the organizations initiatives in these areas of
constructs. An organization can select three states of its initiatives – Not Started,
Work in Progress and Deployed/Running successfully. Each of these states has an
increasing value of 0, 1 and 2. The values are multiplied by the weights to identify
the Construct Adoption Maturity Value (“CAMV”).

The third section of the excel tool lists down construct wise the measurable
values (“CWMV”) and provides a list or drop down the possible states of these
values (“PSV”). Participant organization can choose on the nearest matching state
(“NMS”) from the possible states. The PSV has different rating values from 1, 2,
3, 4, and 5 in progressively increasing order of improvement or maturity on
enhancement of the states. Each of the states has been given a value corresponding
to its state value. We assume that each organization can have the minimum

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achievable state of 0 i.e. any organization will be treated to be in state 0. The value
so derived takes support from existing SEI-CMM (Capability Maturity Model)
which is a well-established Maturity Model derived from CMM/CMMI framework
and the standard ISO/IEC 15504 (Christiane, May 2010) (Salviano, 2008) (Sheard,
Sep 1997) (Pušnik, 2007). A set of organization who were responding and
attempted to execute the excel tool for self-analysis were communicated their
current standing as per our “IoT-MM” IoT Maturity Model. The results sections
will show case around 9 organizations in different levels of maturity and decipher
their current state and responses to the tool.

STAGE G: Identifying impact and benefits of IoT adoption in the top

5 construct areas using a pre and post analysis.

The above research has identified constructs and the transition states which
are measurable, however the study will be incomplete whether the constructs have
really contributed to the improvements in factors which determine Global
Manufacturing competitiveness Index at the firm/enterprise level. A before
treatment-after treatment scenario would be appropriate along with the use of
statistical measures to see improvements in the states before-after.

For the purpose of convenience and ensuring valid filtration, the filter we
have picked up the top 5 constructs which have achieved a weightage of more than
10% from experts. We have filtered and omitted the rest of the 4 constructs which
have received an overall score/weight of less than 10% thereby ranked lowest in
terms of criterion for ranking the abstract constructs.

Suitable organizations have been chosen which have adopted and

implemented projects relating to IoT adoption in the respective construct areas.

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 Overall four organizations have been choose with one having been chosen
for two constructs as it has been successful in implementing two IoT projects in
two different construct areas.

The profile of the organization, nature of IoT project adopted and the
statistical evaluation techniques have been detailed below along with the pre and
post IoT project adoption scenarios/measurements.

In the event that significant improvement is observed we have finally

formulated the IoT-MM model contributing to global competitiveness index for
any manufacturing sector enterprise in India.

STAGE H: Using survey method analyze the factors determining a

successful adoption of IoT projects as evidenced by successful adopting
organizations.

A survey of over 100 respondents across manufacturing organizations in

India of different scale and scope and the challenges faced during successful
adoption of IoT projects in any of these construct areas. The respondents were
filtered using filter questions on their status of adoption.

m. Outline of Thesis Chapters

The thesis has been divided into the following chapters:-

Chapter 1 deals with an introduction covering all basic concepts including

Internet of Things, Industry 4 , the state of Indian Manufacturing , the current
Maturity Models relating to IoT or Industry 4 in place along with their limitations.

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It also covers the motivation for the research and a quick outline of the stages being
followed in the entire research process along with research questions.

Chapter 2 deals with the review of supporting literature on a wide range of

related topics mainly our constructs such as business models, technology, products,
financial feasibility, IoT technology stacks, people and technology projects,
process improvements, industry 4 and other aspects. Thereby our primary research
draws a lot of assumptions and strength from laid down literature and methods
thereby forming a strong base for our research analysis and conclusions drawn on
already concluded work from reputed and verifiable sources and authors. At the
end we are able to identify the 9 key constructs which influence IoT adoption
maturity of any organization.

Chapter 3 deals with our complete research process – research

methodology which defines the multiple phases and phase wise tools and technique
used in the process, overall the profile of respondents/participants be it individuals
and enterprises is discussed in detail. The methods used are AHP for constructs
weights, Delphi method for variable identification of variables, interview and
observation, and expert survey for measurement tool testing and organization self-
analysis and finally validation trials using case study methods.

Chapter 4 deals with statistical method application, tabulation of data,

collating results and presenting the results along with our analysis. The methods,
their pre-conditions before application, their fitment for application in the current
scenario viz a viz other methods and finally their limitations if any is also listed in
the below sections.

Chapter 5 which is the last chapter consists of key findings, conclusions,

limitations of research and the plans for future research which can be done by other
researchers.

This is followed by list of references, list of related research papers

published by the researcher, copies of acceptance letters, manuscripts and a brief
personal profile.

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 n. Summary

The chapter summarizes the research problem and the objectives of the
dissertation which is to identify the constructs affecting manufacturing
competitiveness index in the Indian context. The chapter also provided an
introduction to the theoretical grounding of this thesis, including the contributions
that it makes to research and finally to conclude with an overview of the remaining
chapters in this dissertation, including methodologies and studies.

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