The Tech-Powered Transformation in Engineering
The global industrial machinery market is defrosting itself from the pandemic freeze and is expected to bounce back with an enhanced growth trajectory. The market is anticipated to reach $793.85 billion in 2025 at a CAGR of nine percent. The Asia Pacific was the most significant contributor, accounting for more than 50 percent of the global industrial machinery market in 2020, and is expected to continue its dominance. The growing pace of Smart City projects and infrastructure development in fast-developing countries like India will drive this trend. The vertical transportation industry in India, which is expected to grow at nine percent CAGR during 2021-2025 (according to Research and Markets), is in ideal alignment with this trajectory. Companies rearranging their operations to recover from the COVID-19 impact is expected to become a tailwind to this growth. Further elaborating on the factors driving the industrial machinery industry, technological advancements in the segment, and the influence of digitization through an exclusive interview with CEO Insights is Amit Gossain, the managing director of KONE — India & South Asia.
In conversation with Amit Gossain, Managing Director, KONE — India & South Asia
Tell us about how digitization has created a difference in India’s industrial machinery manufacturing market.
The manufacturing industry is witnessing a significant shift in the way things are conceived and made, consumed, and maintained as news of competitive advantage and actual advantages earned by early movers trickle out. Across all industries, businesses are attempting to promote the digital transformation of their organizations and processes by incorporating automation, software, and cutting-edge technology into their daily operations. Across assembly lines, the traditional approach of manual data collecting and analysis is quickly giving place to digital efforts.
Digital technologies shorten the time and cost of product development, allowing for digital engineering and subsequent advances in pre-manufacturing stages like R&D and design. Digitization in manufacturing improves productivity and saves money, which they may spend on bettering product quality and expanding into more complex product lines. Through intermediation via digital platforms, such as business-to-business (B2B) and business-to-consumer (B2C) e-commerce, digital technologies minimize the costs of exchange and trade. The companies involved in manufacturing may now obtain inputs more simply and at more competitive prices over the internet.
In the next five years, digitization in the machinery industry will be crucial in helping manufacturers withstand severe competition and diminishing pricing margins. As a result, India stands to gain from a broad-based strategy to promote Industry 4.0 applications that serve all companies, both leading and small, and break these technology barriers. Firms with advanced digital capabilities should be aided in developing new products for new services and markets.
The consistent increase in the number of high-rise buildings in the Industrial Sector, the growing demand for residential lifts from India’s urban and suburban regions, the country’s high demand for urbanization, and growing government investments are all contributing to an increase in elevator and escalator installation.
Where do we stand in terms of focus on safety among industrial machinery manufacturers, including governmental interventions regarding the elevator and escalator industry in particular? Which are the areas you have observed the industry paying less attention to?
The consistent increase in the number of high-rise buildings in the Industrial Sector, the growing demand for residential lifts from India’s urban and suburban regions, the country’s high demand for urbanization, and growing government investments are all contributing to an increase in elevator and escalator installation. As a result, India’s elevator and escalator business has been expanding rapidly. While regular servicing and maintenance, testing, and monitoring of elevators are undeniably important in ensuring their efficiency and passenger safety, they are not the only driving forces. Other components of design and technology are employed in the construction of elevators with more significant safety measures.
In terms of government involvement, while some states have progressive elevator laws, there is no comprehensive national policy that enforces rigorous safety requirements for elevator design, building, and installation. Even lift licenses, which require elevators to be inspected after installation and given a permit to operate, are not common in all states. The fact that elevator manufacturers use subcontractors to install their goods further complicates the problem. While larger, more organized manufacturers may have their own training programs in place before certifying subcontractors, smaller, less organized manufacturers may not.
It is important to realize that, from technology and maintenance suppliers to building owners and equipment users, everyone is involved in safety. This is why we have global policies, processes, and standards in place at KONE to ensure that all of our business activities, including subcontractor operations, are planned and carried out in a systematic and internationally synchronized manner.
An area that I believe is not given the attention they need is the varying implementation of safety rules across India. Given the relevance of vertical mobility in today’s urban environment, there is a rising concern regarding safety and regulations for installing the elevators, which calls for the Lift Regulation Act to be made mandatory. To date, only twelve states have enacted legislation that ensures the safe installation of elevators.
It’s time that the government brings uniform guidelines across the country for the safety norms to be followed by the elevators and escalators manufacturers. Global companies and many Indian companies follow strict safety norms as per the guidelines from implementation agencies of govt.
What are the latest trends and challenges influencing the market’s growth?
The housing requirement for the population and the latent demand post-pandemic are the prime reason driving the market. The rising number of high-speed metro projects, as well as new airports, are also driving growth in the elevator and escalator industry, and so is the drive for affordable housing by the government.
There is also a growing demand for customized elevators. Hospital elevators, for example, of different sizes are in demand. So are elevators for commercial buildings with high-end technology such as turnstiles and 24/7 connected services.
Talking about the challenges in the market, safety would be a prime area of concern as there is no national lift act, and in turn, no standard safety specifications nationally. Some states follow a lift act, while most do not.
Also, although new elevators and escalators have an average shelf life of 20 years, several operating issues necessitate elevator and escalator monitoring for maintenance. Elevators and escalators must be maintained and monitored regularly to avoid any problems. At KONE, we came up with a leading-edge innovation - KONE 24/7 Connected Services for intelligent predictive maintenance. It connects elevators and escalators to KONE’s cloud and uses artificial intelligence-based analytics to identify any potential issues before they cause problems, hence making them safe.
How does KONE Elevator maintain its sustainable success in the market? What are the core values reflecting the organization’s strong foothold in the market?
KONE entered the next phase of its strategy for the next four years, which is, Sustainable success with customers. We will focus on expanding the value we produce for clients with new intelligent solutions throughout the course of the four-year strategy term, as well as embedding sustainability even more deeply across all of our activities.
Within that strategy is for us to define the opportunities for profitable growth and differentiation or, as we call them, ‘Where to Win’ areas. This strategy will go a long way in helping us establish a strong foothold in the market. These ‘where to win’ areas include:
Core products and services: Here, connectivity and adaptability are used to fit consumers’ unique needs for a smooth experience. All products and services shall be cost-effective and environmentally friendly.
New solutions for customer value: These are being developed and integrated with core products and services in order to provide new value to customers.
Smart and sustainable cities: This involves becoming a preferred partner for smart and sustainable city development.
The company’s core values are Care, Customer, Collaboration, and Courage, which are clearly followed all across the organization.
Tell us about your leadership approach and corporate governance model.
As Global and India leaders in the elevators & escalators industry, we are committed to safety, quality, sustainability, and KONE principles, all of which serve as a solid basis for our organizational culture. We firmly believe that leaders must lead by involvement and example. First and foremost, senior leaders must own and demonstrate the new behaviors. The vertical structure for altering leadership culture is at the heart of our strategy.
The duties and responsibilities of KONE India are determined by the company’s internal structure, Indian company law, and the governance principles under different statutes of India. KONE India’s Corporate Social Responsibility program aims to improve society by implementing initiatives that promote its residents’ long-term development and progress. Our societal commitment is ingrained in our value system. KONE India’s CSR programs include various activities in which we engage to give back to the community. KONE India CSR now also operates in rural areas in Tamil Nadu’s Sriperumbudur and Tiruvallur districts, prioritizing the most vulnerable.
What are the emerging opportunities and changes that the market is up against in the post COVID era?
Production and supply chains have been disrupted due to the pandemic’s effect on our industry. The items and commodities in the upstream supply chain are produced less to nothing in the months since the epidemic spread. These supply chain disruptions presented KONE with several obstacles that we had to overcome. From delivery delays to increased costs to the sheer uncertainty in people’s minds about whether the market would ever return to normal. The market is still recovering and getting back to its original size and efficiency. Furthermore, due to several construction projects being left unfinished and deserted in the wake of the pandemic, the market has the opportunity to spring back to its earlier potential as these projects start to resume work.