Industries Accelerate Automation Plans Amid Chronic Labour Shortage

The pandemic’s two major fallouts -— labour shortage and social distancing —- are now forcing companies to accelerate automation. As a result, how these companies look at labour is also undergoing a paradigm shift.

Engineering and construction firm Tata Projects is now using a tie machine at one of its Delhi project sites to bend metal bars. Before the pandemic, this was done manually by labourers. Company executives said the change was made because of the shortage of reinforcement fitters.

The lockdown and the fear of Covid-19 saw many labourers migrate back to their native places. This left companies with an acute shortage of labour when they resumed operations from April 21.

In fact, labourers are yet to return in full force. Most companies still report labour availability at about 80 per cent of pre-Covid levels. The gap is now being addressed through automation, mechanisation and digitisation.

KEC International is also using automation to make up for the labour shortage. At some of its factories, manual lifting and trolling of materials is being substituted with conveyor belts. The need of social distancing, availability of CCTV cameras, and shortage of labour has also reduced the requirement for safety marshals on the work floor.

Vimal Kejriwal, managing director and chief executive officer, KEC, said, “Our labour availability right now is at 80-85 per cent, it will reach 100 per cent in future, but the increase in numbers will not be needed. We are looking to increase our productivity by 20 per cent through mechanisation and automation”. He said clients at project sites are now more willing to accept mechanisation.

ALSO READ: RBI's core income growth takes a hit as global interest rates decline

Industries like crude oil refining, which are already high on automation, are finding better use for artificial intelligence (AI). An executive at Bharat Petroleum Corporation (BPCL) said live camera feed and AI is being used to receive technical advice from experts and clients based out of other cities and countries. It has helped overcome travel restrictions to access the necessary expertise, the executive said.

Companies are also moving towards digitisation, with an effort to complete billing and payment processes online.

For the road sector, introduction of FASTAGs earlier this year reduced the requirement for manual labour at toll booths. A top executive of a road development company said, “It is less about cutting head count, and more about safety of both drivers and toll collectors with social distancing”.

Others, like steel and energy conglomerate JSW, already had plans to launch an e-marketplace to sell steel, the pandemic has accelerated this.

Most of these measures have been introduced to address the labour shortage. However, many of these are expected to continue even after the pandemic. The BPCL executive added these new measures have resulted in better turnaround time and saving costs, including on travel. Engineering major ABB India is also betting on a digital transformation and opened a new robotics facility in Bengaluru in July.

It is too early to say what this means for labour. People are getting employed locally and re-skilling is underway to meet local requirements. Companies are now keen to keep a large part of their labour force local, said Kejriwal.