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Telecom Linked: Manufacturing companies deploy communication solutions to boost growth

January 31, 2013
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There is a growing rank of multinational companies that view India as a base for supplying equipment to the Asian markets. India, with its manufacturing and engineering capabilities and pool of skilled workers, offers a strategic advantage for servicing the Asia-Pacific market. Recently, Siemens, the German technology major, announced its plans to make India the global manufacturing hub for its key steel plant equipment.

Over the past few years, the manufacturing sector in India has been gaining traction. From 4-6 per cent growth per annum in the early years of this decade, the growth rate has risen to 9-12 per cent in recent years. Segments such as air conditioners, nitrogen fertilisers, tractors, cables and electrical wires, ball bearings, construction machinery, auto parts, tires, electric fans and pharmaceuticals have, in particular, seen a surge in their growth figures.

To keep pace with this growth, manufacturing companies have been investing heavily in building their telecom infrastructure. Connectivity solutions have been effectively leveraged to streamline and integrate critical functions such as procurement, production and distribution. Telecom networks have also helped these companies achieve cost efficiencies, faster time-to-market for new products and services, and competence in managing resources.

Today, in order to optimise productivity further and tap new opportunities, these companies have been steadily increasing their telecom spend on either establishing new communication networks or in upgrading existing ones. A mix of telecom operators is being engaged to provide a full suite of managed services for data, voice and data centre solutions.

Over the years, a host of technologies and applications have come into play in the manufacturing process. Companies in this space are utilising multiple technologies for wide area network (WAN) connectivity. The more popular mediums include leased line networks, integrated services digital networks (ISDNs), Ethernet, VSATs and IP-VPNs. While ISDNs are providing them fast connectivity and higher bandwidths (especially for bandwidth-hungry applications such as video- and audioconferencing), Ethernet provides flexibility for future upgrades and is an economical option.

Similarly, keeping in mind that manufacturing companies have to deal with large amounts of data spread across diverse locations, VSATs are a popular connectivity option. VSATs are a cost-effective medium that help companies expand their communication network when they acquire, move or add new sites to their operations. VSATs also help companies enhance network flexibility, facilitate migration from existing legacy systems and add new network applications. Most importantly, connectivity between a manufacturing company’s head office and remote locations is streamlined, open and transparent.

Optic fibre and wireless connectivity (primarily radio frequency [RF]) are being increasingly utilised as last mile access technologies. Besides these, mobile and enterprise applications such as audio- and videoconferencing, VoIP, web conferencing, mobile email and corporate intranet have also come into play.

Apart from telecom, IT applications like enterprise resource planning (ERP) and supply chain management are being used extensively by manufacturing companies to enhance productivity. Another example of an IT application being used in the manufacturing space is computer numerical control (CNC). This application has significantly reduced the number of machining steps that require human action, thereby enhancing quality and productivity. CNC automation has also reduced the frequency of errors as well as brought in more flexibility in the way components are placed in the manufacturing process, and in terms of the time required to change the machine to produce different components. The machines are controlled directly from files created by certain software packages so that the product assembly can go directly from design to manufacturing, without the need to produce a blueprint of the manufactured component.

Given the highly competitive environment and the complex market dynamics involved, it is expected that manufacturing majors will continue to invest in telecom and IT applications.

tele.net carried out a survey among various organisations in the manufacturing sector to assess their telecom requirements and solutions.

The following questions were asked in the survey:

•What are the organisation’s key technology requirements?

•What mix of service providers and vendors is used?

•What are the biggest concerns with respect to telecom infrastructure?

•What are some of the mobility and enterprise applications that the organisation has implemented?

•Which network security tools has the organisation implemented?

•What redundancy tools are being used?

•Which new product or service holds the most relevance for the organisation?

Key technology requirements

The results of the survey indicate that manufacturing companies are leveraging telecom as a strategic tool to improve performance and quality through real-time process monitoring as well as enhance network reliability via appropriate maintenance. According to industry experts, a robust telecom system is imperative for this segment. This applies particularly  to demand-based manufacturing, where vendors that supply accessories to original equipment manufacturers use just-in-time or in-line sequencing methodologies, which require constant real-time access to data. Besides, a flexible telecom system ensures that latency between material and information flow is minimised, which helps lower manufacturing costs.

To achieve these goals, the companies utilise technologies and systems such as intranet, virtual private networks (VPN), multi-protocol label switching (MPLS), ISDN, leased lines, Wi-Fi, RF, optic fibre cable networks, VoIP, wireless broadband and local area networks.

Of these, VPNs, MPLS, intranet, leased lines and RF links are the most widely deployed. According to the findings of the survey, most of these technologies are used either as stand-alone mediums or in conjunction with one another for internal and interbranch connectivity, and last mile access.

For example, Antec, Inc. has deployed an intranet as the backbone of its communications set-up. “The intranet performs several functions such as sharing information and supporting operational systems and computing services. It also acts as a platform for employees to post questions and answers by category and topic. We use the intranet mostly as an interactive corporate platform, due to the different locations and time zones of our head office and branches,” says the company respondent.

Godrej & Boyce Manufacturing Limited’s communications infrastructure is also based on a single technology – a VPN link. All of the group’s showrooms are connected to a centralised data centre via a VPN network, with an ISDN link for backup.

Similarly, Usha International Limited’s (UIL) regional offices, plants and warehouses are connected to a data centre over an MPLS-based network provided by a third party. According to the company respondent, the use of MPLS has yielded several benefits such as reduced costs, improved network performance, quality of service and disaster recovery. “Depending on the specific mix of applications and network configuration, MPLS-based services can reduce costs by 10-25 per cent over comparable data services (frame relay and ATM). With the use of MPLS, data centres and other key sites can be connected in multiple redundant ways to the cloud (and thus to other sites on the network). Further, remote sites can quickly and easily reconnect to backup locations if needed, thus improving disaster recovery.”

Meanwhile, companies such as Micro Technologies India Limited (MTIL), Mahindra & Mahindra Limited (MML) and Simmtronics Semiconductors Limited (SSL) have deployed a multi-tier communications infrastructure.

MTIL’s communication system backbone comprises a network sourced from Cisco. It uses a dual-technology network for inter- and intra-office connectivity. For connectivity with its development centre in Pune and between its head office to branch offices, MTIL uses a VPN-based set-up. For communication within its branch offices, and media and marketing offices, it uses leased lines. The leased line network is of 10 Mbps speed and in the 1:1 user configuration. A Wi-Fi set-up is used to connect to the internet. Branch office connectivity takes place via VoIP, while the internet is used for communication with overseas offices.

MML’s telecom set-up is divided into three separate networks – MahindraNet (to link the company’s plants and sales offices), MahindraWorldNet (to connect MML’s group companies at various national and international locations) and Mahindra DealerNet (for the company’s dealers across the country). MahindraNet comprises 150 MPLS circuits, 10 leased lines and over 50 RF links and routers from Cisco that belong to the ASR 1800, 1900, 3900, 2800 and 3800 series. MML’s plants have a three-tier local area network with switches comprising the Cisco Nexus 5000, 7000, 6500 and 4500 series routers, and the Cisco 2900 series distributed workgroup switches. MahindraWorldNet connects  MML’s group companies through MPLS lines. The bandwidth of the various components of MahindraWorldNet ranges from 256 kB to 45 MB, depending on the number of users and the load on the network. Last mile connectivity on this network is achieved via optic fibre, copper and RF (which are in conjunction with either Ethernet or serial drop). The network enables MML’s group companies to access a common portal and shared telecom services. Further, it is connected to MahindraNet through a unified threat management (UTM) device. Mahindra DealerNet runs separately over MPLS lines and the internet. Over 450 of MML’s dealers across the country can access the hosted dealer management solution through this set-up. This network is also connected to MahindraNet through a UTM device.

Similarly, SSL has a multi-tier infrastructure, with each component catering to a different requirement. For WAN, a mix of DLC (local loop), DLC (NLD), IPLC and ISDN technologies, and the internet is used. According to the company respondent, 4 Mbps leased lines help the company maintain seamless connectivity with its branch offices. For both national and local connectivity, Bharti Airtel is the preferred service provider. Between SSL’s domestic and international networks, and its head offices, branch offices and factories, basic mediums like phones, videoconferencing facility and webcams are used. The company’s factories have installed IP-enabled cameras that facilitate seamless international connectivity. The company also uses dedicated hotlines and data lines for the same purpose.

Several companies such as Godrej, UIL and MTIL have deployed data centres. MTIL’s data centre comprises over 50 high-end servers, routers and switches. The key functions of a data centre include ensuring storage and server backup, supporting various enterprise management solutions, and ensuring adequate networking and network security.

Many companies utilise IT-based applications and platforms, besides telecom tools, for their communications network. For example, UIL uses software applications such as customer relationship management (CRM), a vendor portal, business process management, a document management system and SMS gateway tools.

MTIL uses the ERP and CRM tools. Both have been developed in-house.

Service providers and vendors

Manufacturing companies have deployed products and services of a mix of IT and telecom companies such as the Baan Corporation, SAP, Sify Technologies Limited, Bharat Sanchar Nigam Limited, Reliance Communications (RCOM), Bharti Airtel, Cisco, Mahanagar Telephone Nigam Limited, Tata Communications, Tulip, Tata Teleservices (Maharashtra) Limited, Symantec, SCCM, Checkpoint, IPS, Vodafone and BlackBerry.

Issues and concerns

Ensuring network access for all employees, integration of all telecom systems on a single platform, access to reliable and secure information across locations and lack of connectivity in certain areas are the major challenges faced by manufacturing companies.

For Antec, Inc., identifying an appropriate technology road map, keeping abreast of technological advances and installing a user access network for each of their office facilities are the main issues.

For MML, ensuring access to information across locations and the lack of connectivity in certain areas are key concerns. “Due to our increasing global presence, we need to provide secure and reliable information anywhere, at any time. Hence, it is essential to extend the network to new locations, monitor and upgrade the network, and open it up to partners with appropriate security. User expectations in terms of uptime, response time and problem resolution are also growing. Therefore, redundancy is factored into several components of the network.”

Mobile and enterprise applications

A host of enterprise applications are being used by this vertical. For example, UIL uses SAP ECC 6.0, which comes with add-ons such as the advance planning and optimisation, business intelligence, employee self-service and dealer management system modules. SSL uses web hosting, VoIP, audio- and videoconferencing, and email and chat servers. For coordination between support executives, VoIP services like Skype are used. MML uses enterprise applications such as SAP, Exchange Email and Microsoft Sharepoint.

Manufacturing majors also deploy several mobility applications. For example, SSL’s executives use mobile email, data connectivity and conferencing facilities. According to the company respondent, SSL’s sales personnel are provided with RCOM’s data cards that enable them to access the company’s corporate intranet and any data, even from remote locations. The senior executives use BlackBerry devices for the same purpose.

Similarly, MML has deployed multiple mobility applications to provide real-time information to the stakeholders, including mobile employees and field staff, who interact with their various dealers. Mobility applications give the field staff access to employee services, portals and learning content on their mobile handsets.

Network redundancy

For backup, companies in this vertical use ISDN links, dual networks and individual back-up drives. MTIL uses two alternative backup systems. In case one system fails, the other takes over immediately. According to the respondent, the VPN setup is problematic when connectivity is not smooth and the organisation experiences downtime. Therefore, an MPLS network has been set up in parallel to the VPN. Interestingly, the company also has a solar power-based redundancy system.

Network security

To secure their networks, manufacturing majors use multiple mediums. For example, UIL uses a firewall in high availability mode, antivirus and anti-spam tools, and the gateway load balancer platform.

MTIL uses firewalls that have multiple layers of user authentication. The company has developed an information security management system wherein any potential threat, internal or external, is dealt with immediately. MTIL has also developed an internal access system to protect its network. This system prevents unauthorised users from gaining access to the network by alerting the concerned official via SMS. Thereafter, the official has to send another SMS to the system that  blocks the intruder’s attempts.

The way forward

Most of the respondents intend to strengthen their telecom networks over the next year.

Godrej & Boyce Manufacturing Limited is in the process of rolling out the Microsoft Dynamics AX platform across all COCO Stores. It also plans to implement the CRM functionality. On the technology upgrade front, it is looking to implement mobility applications.

MTIL is considering deploying a VPN solution internally for greater network reliability and flexibility. Implementing an optical mesh network is also of interest to the company as it will help reduce downtime and enhance network speeds.

Meanwhile, UIL is looking to implement a solution that will improve business processes as well as leverage IT for business enhancement.

All in all, in the face of fierce competition and changing customer requirements, deploying the latest telecom and IT technologies has become a key priority for companies in the manufacturing space.

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