This case study highlights how Shri Shakti Cylinders achieved stringent quality standards for their products by leveraging Opstech’s powerful quality control tool for their manufacturing assembly line.
In an era when Aatmanirbhar Bharat, or self-reliant India, is gaining currency, it is time to take a closer look at how manufacturers in the Micro, Small and Medium Enterprises (MSME) sector are achieving operational efficiency on the factory shopfloor. The MSME sector is the backbone of the Indian economy, and is the second largest employer after agriculture. Given its vital contribution to the country’s GDP (30% in 2020), it is all the more essential to improve the capabilities of MSME manufacturers—across industries—to sustain their competitiveness and enhance their long-term productivity. One thing is clear—only if the manufacturers improve their quality processes and make innovation a priority would they be able to effectively contribute to India’s phenomenal growth story.
MSME manufacturers at large face distinct challenges that hinder their competitiveness. Issues such as poor infrastructure, technological obsolescence, and lack of funding and skilled manpower are some of the roadblocks manufacturers across industries need to overcome to scale to their full potential.
Besides the issues that have been there for years, MSMEs also face multiple on-ground challenges on a daily basis. The most pressing ones include delayed payments that make it difficult to pay the rent and utility bills on time, labour problems, the lack of a healthy balance sheet and the high cost of raw materials, among others.
During execution, one of the biggest challenges MSMEs grapple with is the delivery of defect-free products to customers within promised scheduled timelines. Since the MSME sector still uses traditional processes to execute large orders, manufacturers don’t have the benefit of using digital solutions to help manage and implement strict quality control on the shopfloor. Adding to the gamut of existing challenges, the lack of digital infrastructure further leads to unexpected penalties and suspensions which the manufacturer needs to bear to survive.
Crucially, be it automotive, defence, or biotechnology, Industry 4.0 has accelerated the need for MSME manufacturing units to harness the power of digital technologies to achieve growth. Decisions controlling the manufacturing process should be led by data and usable insights to ensure product quality for customers. It is possible for MSME manufacturers too to empower their employees by digitising the shopfloor.
This case study focuses on the unique bottlenecks faced by MSME manufacturers in the liquefied petroleum gas (LPG) cylinder industry, as seen through the lens of Hyderabad-based Shri Shakti Cylinders, a leading LPG cylinder manufacturer.
Before venturing into how Opstech brought about a revolutionary digital transformation for Shakti Cylinders’ shopfloor processes, let’s start with an overview of the Indian LPG landscape in which our client operates.
The growing awareness for clean cooking fuel among consumers has positioned India as the second largest consumer of LPG in the world. Besides the high demand for LPG in urban households, the colourless and odourless cooking fuel has also penetrated deep into India’s rural pockets as the fuel of choice. This has been largely possible due to the push given by the government to encourage wider adoption of LPG among rural households, to replace the more traditional and pollution-causing cooking fuels, such as firewood and cow dung.
The government’s Pradhan Mantri Ujjwala Yojana (PMUY) scheme was launched to benefit low income rural families, especially women living below poverty line (BPL), by providing LPG connections at subsidised rates. Under the scheme, over 8 crore poor households have received free LPG connection since 2016. However, the steep price hike per cylinder between December 2020 and February 2021, is compelling India’s poor to opt out of the scheme as they are unable to afford LPG refills. To remedy the situation, the next phase of PMUY will focus on making refills affordable for the scheme’s beneficiaries.
Despite such challenges amid the pandemic, India’s appetite for LPG is only growing by the day. COVID-19 lockdowns increased the residential demand for LPG, with consumption at 27.41 million tons (MMT) in 2020, compared to 26.944 MMT in 2019. The high demand for LPG is a trend that is likely to continue and as per a recent forecast, LPG consumption in India will reach 34 MMT in 2030.
This trend bodes well for LPG cylinder manufacturers in the country. Alongside the surge in demand for LPG in rural households, auto manufacturing companies are also focusing on Auto LPG tanks as a viable form of alternative fuel. This has enhanced the competitive landscape and increased business opportunities for LPG cylinder manufacturers. Further, increased disposable income has also contributed to the growth of domestic LPG cylinder manufacturing markets around the world.
If the LPG cylinder industry seeks to avail of lucrative opportunities in the residential and commercial sector (restaurants, cafeterias, etc.), they should be customer-focused and ensure their cylinders reach a “near zero” perfection before they are delivered to the end user.
Towards this end, manufacturers should follow stringent quality processes on their shopfloor to ensure defect-free LPG cylinders reach customers. Like in any industry, customer satisfaction is a key determinant of any LPG manufacturer’s future growth trajectory.
Before Opstech came on board, Shakti Cylinders lacked a robust digital infrastructure to manage its manufacturing workflow. Plagued with operational inefficiencies, the company was unable to keep track of various products and job orders on the shopfloor.
Like other LPG cylinder manufacturers in the industry, it had become dependent on cumbersome manual processes and used spreadsheets and paper-based entries to record crucial quality data. Around 85% of Indian MSMEs still use manual processes to keep track of job orders. This is a common pain point for manufacturers across industries.
Shakti’s quality data management processes were vulnerable to inaccuracies that frequently led to defective LPG cylinders getting passed on the shopfloor. In addition, the manual processes lacked accountability because there was no way to find out which worker rejected a particular cylinder and the reason behind the rejection. Shakti also needed a powerful digital platform that captured all the data and analytics at various stages of the cylinder manufacturing process.
Opstech developed a powerful SaaS-based quality control tool that leverages Artificial Intelligence (AI), machine learning, computer vision and Internet of Things (IoT), as well as the latest tagging technologies, such as 1D/2D Barcodes, NFC and RFID. By integrating these cutting-edge technologies, the platform enabled Shakti Cylinders to develop a data and analytics-focused approach to achieving optimum product quality at affordable costs. Opstech’s software inspects each stage of the manufacturing process by reducing human intervention. The data that is captured at each stage is stored on the cloud to ensure Shakti stays on track to develop an agile production assembly that would eliminate product defects and recalls without any digital infrastructure maintenance.
In the absence of digital systems to track crucial metrics, potential leaks in cylinders were overlooked and the defective products were loaded onto the delivery truck. When the bottling plants received defective cylinders, Shakti suffered one month suspension and about Rs. 2 crores in revenue loss, putting its reputation and growth prospects on the line.
Further, Opstech found that many stages in Shakti’s shopfloor workflow were manual and lacked integration with machines, leading to organisational silos.
Although the LPG cylinder manufacturing industry at large has used multiple approaches and tools to resolve the issue, the sector lacked a data-driven plug and play digital quality management platform.
At this juncture, Opstech came on board to solve the most pressing problem in the SME manufacturing industry: the issue of quality control. The time had come for Shakti Cylinders to go digital to achieve path-breaking results.
Since the root cause of the problem is defective products, Opstech’s solution applies data analytics to ensure the LPG cylinders adhere to stringent quality standards and are defect-free before they leave the shopfloor.
The LPG cylinders are number punched on the shopfloor. Opstech’s app generates a unique identification number for each cylinder. The number punching stage is updated on the app before it proceeds to the next stage.
In this stage, the LPG cylinders undergo a hydrostatic (HST) test to ensure there are no leaks and cracks in the cylinders. Opstech’s app records a photo documentary evidence of the pressure gauge’s reading for each cylinder that passes through the HST test. The software has a 30-second in-app timer to ensure the testing period before the test. Thereafter, Shakti’s quality control inspectors register cylinder-wise test results.
In this stage, each cylinder is assigned a QR code that matches the unique identification number on the cylinder. The QR code that is generated captures all the details of each cylinder through Opstech’s app. The information can be retrieved upon scanning.
In this stage, the tare weight (unladen weight) of each cylinder is checked and directly recorded by Opstech’s app and auto-rounded as per industry standards. There is no manual intervention at this stage increasing accuracy of data.
In this stage, the weight of the air-filled cylinder is matched with the app processed weight. Opstech’s app updates each cylinder’s weight.
In this stage, Opstech’s app sets a six-hour timer per cylinder to give sufficient time to detect potential air leaks. The cylinders can pass to the next stage only after the timers are monitored.
In this stage, Opstech’s app analyses the weight of each cylinder and signals if there is any potential leak.
After the successful completion of the seven stages, all cylinders are verified by Opstech’s app before loading them onto the delivery truck for sending to the large oil and gas companies.
Opstech’s app has an in-built dashboard where Shakti Cylinders can track data and analytics related to any specific stage in the quality control process. The client has to login to the portal to get multiple details on all aspects of the manufacturing process that occurs on the shopfloor. For instance, the client can see the real-time data related to rejected cylinders that includes the name of the worker who has rejected the cylinder and the reason for doing so. The data also captures important realtime data points such as the average time along the entire manufacturing process to further identify bottlenecks. . Opstech’s dashboard can be modified on a case-by-case basis, as per individual client requirements.
By integrating Opstech’s solution, Shakti Cylinders benefited in multiple ways. It was able to capture the data and analytics in real-time for every stage in the process. The data-driven solution enabled the company to identify potential bottlenecks in real-time that could hamper the delivery timelines and efficiently trace defective cylinders on the shopfloor to improve overall product quality.
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