India cannot become a manufacturing superpower without a productivity revolution

Years ago, manufacturing competitiveness was more often associated with labour availability and cost advantages. Today, however, global competitiveness is being reshaped by automation, advanced digital technologies and analytics, artificial intelligence (AI) and increasingly complex and evolving customer expectations. As a result, productivity can no longer be viewed as just an operational metric. It is a strategic lever that influences profitability, resilience, innovation and market leadership.

For Indian manufacturers, the challenge, is not a lack of activity. Across industries and sectors, plants are busy, production lines are running, and teams are working hard. Yet, more activity does not automatically lead to better outcomes. In many organisations, delays in decision making, unclear responsibilities and inefficiencies give rise to friction, that is easy to overlook but challenging to overcome. Overtime these issues can undermine productivity and in turn limit overall performance.

Majority of the times, these inefficiencies may remain invisible during periods of growth, but they become increasingly costly, as organisations seek to scale in an agile manner and compete globally.

Manufacturing businesses often find themselves caught in what can be described as a productivity puzzle or paradox. They continue to add people, layers and processes to manage growth and yet struggle to achieve consistent improvements in output and profitability.

The challenge is very rarely lack of effort. In fact, employees across such manufacturing organisations are often working harder than ever to meet the growing demands. The real issue lies in how the work is structured, co-ordinated and delivered. When decisions get caught in multiple layers of approval, managers spend more time chasing alignment than driving outcomes, and skilled employees are tied up with routine or low-value tasks, productivity inevitably suffers. Over time, these inefficiencies become part of the way an organisations operates, making them difficult to identify and even harder to address.

In response, many organisations add headcount to ease immediate pressures. While this may provide short-term relief, it seldom resolves the underlying issues. Sustainable improvements in performance come from rethinking how workflows across the enterprise, simplifying processes, clarifying accountability and enabling people to focus on activities that create the greatest value.

India’s manufacturing future will depend on a shift in mindset. The conversation must progress from workforce expansion to workforce effectiveness.

This entails reimagining roles, simplifying work structures, strengthening leadership and creating operating models that help people focus on value creating activities. Though technology will play a huge role here, it alone cannot solve productivity challenges, without corresponding changes in processes, decision rights and workforce design as without digital investments these changes often fail to deliver their full potential.

A KPMG in India report titled - India’s trillion-dollar manufacturing ambition requires a workforce productivity revolution examining more than 130 large India companies highlights a clear relationship between workforce productivity and enterprise value creation. The report argues that substantial productivity gains can be achieved when organisations simultaneously rethink work, revisit organisational structures and remodel workforce strategies rather than treating productivity as a single operational metric.

The manufacturing leaders of the future will not necessarily be those with the largest workforce or biggest facilities. They will be the organisations that create agile work operating models where people, technology and processes work together seamlessly.

Achieving this requires strong frontline leadership capabilities, faster and quicker decision making and greater use of data and AI to improve execution. As global supply chains evolve, organisations that can adapt quickly deploy talent effectively and respond faster to market developments will gain a competitive advantage.