India has emerged as an important global automotive market and offers huge growth potential due to low vehicle penetration and improving economic fundamentals. The sector accounts for 7% of India’s GDP and employs about 19mn people. 
Mahindra & Mahindra
Mahindra & Mahindra (M&M), part of The Mahindra Group, is one of the largest vehicle manufacturers by production in India. It produces and sells over 500,000 units per year across SUVs, tractors, pickups, commercial vehicles, and motorcycles.
Connected Factories in Industry 4.0: Digitalization of Automotive Manufacturing
Over the last decade, several new technologies have disrupted the automotive manufacturing process, none as much as the Industrial Internet of Things (IoT) creating a connected factory environment. IoT-driven manufacturing allows real-time operation by continuously tracking processes and resources.
Concerns at M&M
M&M has for long enjoyed a prime position in the Indian markets. However, with markets slowing down internationally, global automotive players are seeking new markets, with India a lucrative target. The entrant of global suppliers with deeper pockets, digitally enabled supply chains into a competitive market with a large range of products, for an extremely price sensitive customer, has created a strong pressure on M&M to have a hyper-efficient plant that is also flexible to meet changing customer demands – providing extreme flexibility with mass production capabilities. However, for Mahindra, moving from a traditional setup to a digitalized supply chain requires not only an empowered top management to execute the vision, but also a significant investment in research and technology.
There are three key trends that are influencing this transformation at Mahindra:
- Capacity to capability: Manufacturing flexibility is critical to respond to variable market demand
- New production models: M&M will look to move from a make-to-stock approach to embrace more make-to-order, configure-to-order, and engineer-to-order production models.
- Workforce engagement: People will continue to provide decision-making capabilities to handle increasing operational complexity. These higher levels of collaboration have a critical need to build a seamless man-machine information flow. 
M&M Opens the ‘Factory of the Future’
M&M invested $3Bn to deploy a Connected Factory of the Future in Chakan, Pune, India. Built with a vision of “connecting the top floor to shop floor”, the plant is automated with IoT and Cloud technologies and can seamlessly manufacture 40 models using a new generation of systems that enable real-time, automatic interactions among machines and assets.
- The Connected Engineering framework enables the acquisition of data from all the connected sources:
- Track & Trace connects all of the 20,000 tools on the shop floor to determine the location to an accuracy of 30 cm. 
- All tools relay real-time information to a central database and can be remotely programmed and provisioned for specific tasks.
- Real-Time Manufacturing and Maintenance
- Analytics on the stored data provide insight on key parameters and ensure quality and conformance to stringent regulations.
- Any disruption in manufacturing is quickly identified. Real-time control systems help in routing and tracking of vehicles as well as in quality assurance and equipment performance monitoring. 
Results of the new factory
Compared to other plant rollouts, M&M achieved:
- Changeover time reduction
- Lower defect rates and early fault detection and rectification
- Improved and centralized reporting for complete measurability and controllability 
Thinking About the Future
The next challenge is to seamlessly integrate the robots with shop floor in a scalable model. To this effect, the company is looking to leverage its research arm, Tech Mahindra, by launching a Factory of the Future Lab which is primarily involved in bringing down the cost of robotic operations, which is at $6 per hour currently. 
Recommendations for M&M management
- Transforming at Scale: A new factory can only serve as a prototype – technological integration is always a challenge at scale. M&M will have to upgrade existing facilities while continuously running them. They should now build IoT implementations that work with and on top of existing equipment and enterprise systems. It is important that there is a framework that can facilitate communication and be adaptable to different ecosystems with minimal cost implications. Further, M&M should add not only the flexibility of technology to accommodate increasing variety of products but also the adaptability of existing products into new supply chain models
- Predictive Analytics: M&M’s supply chain has traditionally been reactive. They need to integrate machine data with performance analytics to introduce proactive maintenance hence reducing downtime
- Connected vehicles: M&M should now leverage this framework for customer delight through connected vehicles that can enable service provision and maintenance management through onboard diagnostics.
- When future planning, how should M&M account for disruptive manufacturing technology such as 3D printing?
- With mechanization of processes, M&M will be downsizing labor. How should a company of this magnitude execute the downsizing while avoiding any backlash or reputational damage?
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 Hector, Darlington. 2017. “Smart Manufacturing: With Factory Of The Future Lab, Tech Mahindra Places A Futuristic Bet”. The Financial Express. http://www.financialexpress.com/industry/smart-manufacturing-with-factory-of-the-future-lab-tech-mahindra-places-a-futuristic-bet/612503/.