In a rapidly transforming global economy, India’s SME manufacturing sector stands at a critical juncture. The convergence of digital transformation, cloud-based ERP systems, and sustainable manufacturing practices has opened new doors for innovation and scalability. But with this promise also comes a unique set of challenges—ranging from legacy systems and cost constraints to a shortage of skilled manpower and resistance to change.

At a recent webinar—hosted by Construction World and Smart Manufacturing and Enterprises magazines—moderated by Aiyappa Muthanna, Senior Solutions Consultant, MEAI, Epicor, industry leaders shared their experiences and insights on overcoming these barriers and harnessing technology to unlock growth. The panel featured Dr Umesh Mhatre, Managing Director, Surface Modification Technologies; Sameer Kelkar, CEO, Grind Master Machines; and Amit Pradhan, Vice President – IT & CIO, Dixon Technologies. Together, they painted a compelling blueprint for the future of SME manufacturing in India.

Enhancing performance through material innovation

Dr Mhatre provided a powerful insight into the transformative role of surface modification technologies. These include coatings and chemical treatments that enable materials to function better in hostile environments—whether that’s high temperature, corrosion, or mechanical wear.

“Surface modification technologies allow us to make components perform under specific environmental conditions. From aerospace to pharmaceuticals to imitation jewellery, these coatings are becoming essential,” said Dr Mhatre. He added, “While India is still catching up, the Western world has long embraced these innovations. Our focus now is on making these solutions indigenous, sustainable, and scalable.”

“We couldn’t just import technology—we had to innovate. Now, we have our own R&D centre, our own equipment, and we’re exporting technology back to Germany.”

Surface finishing

Kelkar shed light on how micro and nano finishing have evolved to meet increasingly stringent industrial requirements. “Back in 2010, car warranties barely lasted two years. Today, they go up to 10 or 15, and surface finishing is a big reason why,” Kelkar explained.

As components rotate at high speeds—whether in vehicles, agricultural machinery, or industrial bearings—the precision of their finish becomes crucial. “We now see components moving from finish level one to level three. That’s a significant jump and an opportunity for manufacturers like us to deliver machines that meet these exacting standards.”

Kelkar emphasised that quality expectations have risen worldwide, and only manufacturers with strong internal systems and research can keep up. “We need to be known for our technology, not just our pricing.”

Building sustainable manufacturing

Sustainability, once a buzzword, is now central to manufacturing strategies. Kelkar said: “Manufacturing is inherently unsustainable. But it’s our moral responsibility to aim for net-zero.” Grind Master has committed to achieving net-zero emissions by 2030 and is taking a two-pronged approach—mass afforestation and remanufacturing.

“We’ve planted over 200,000 trees and are adding 100,000 every year. By 2030, we’ll reach 800,000, covering 50 to 60 per cent of our carbon footprint,” he said. Remanufacturing, too, has been a game changer. “We take 15-year-old machines, tear them down, and rebuild them better. Companies like Maruti Suzuki and Cummins support this model – it reduces costs and carbon impact.”

Dr Mhatre said. “By extending the life of tools and components, we reduce waste and material usage. We’re also working on hydrogen fuel cell components, where coatings can make parts lighter and more corrosion-resistant. This is where material science meets climate action.”

Digital transformation in action

On how digital transformation is being implemented at scale, Pradhan from Dixon, one of India’s leading electronics manufacturers, said, “Digital transformation is not a luxury, it's a necessity. We’ve moved from measuring rejections to proactively preventing them using AI-based quality inspection systems. These vision-based tools check for defects in real-time, helping reduce customer returns and improve product consistency.”

He explained how Dixon’s layered approach combines cloud ERP systems with startup partnerships and global platforms. “Traceability, MES systems, and custom analytics help our production teams take real-time decisions. This makes a huge difference when you're manufacturing at scale.”

Global journey of Indian manufacturing

Grind Master’s global expansion journey is a testament to how technology and process excellence can open international markets. “Breaking into Japan, China, and the US wasn’t easy,” said Kelkar. “It took better product reliability, stronger branding, and cloud ERP systems that gave our clients transparency into every stage of the project.”

A cloud-based project management system enabled Grind Master to provide real-time visibility to customers in different time zones. “If a Japanese client wants to track the progress of their machine, they don’t have to wait for emails. Everything is available on their portal—that’s the kind of trust and professionalism cloud ERP brings,” Kelkar emphasised.

Embracing change

Change management remains a crucial factor in successful digital adoption. Kelkar highlighted the importance of empowering young engineers: “We need to stop relying on low-cost labour and start positioning ourselves as a globally competitive tech hub. That means giving responsibility to younger teams and encouraging innovation.”

Dr Mhatre agreed: “Our first step was infrastructure. We built a modern factory in Bengaluru. Then came ERP implementation, TQM systems, and automation. Precision matters, especially when dealing with micron-level coatings, so reducing human error through automation is key.”

Pradhan added, “Adoption is a challenge across both SMEs and large enterprises. Most people use only 13 per cent of a software’s features—just like how we use only a fraction of our smartphones. The government should consider incentivising ERP implementation costs for SMEs. This would help democratise digital transformation.”

He further emphasised the importance of creating internal ecosystems. “At Dixon, we’ve built hybrid models involving SI partners, startup incubators, and even partners from China, Korea, and Taiwan. This diversity of thought and expertise helps us overcome roadblocks swiftly.”

Looking ahead

India’s manufacturing sector is at an inflection point. But there’s a long road ahead. “We still lack the deep material understanding that the Germans or Americans have,” said Dr Mhatre. “Indian engineering can achieve micron-level precision, but the metallurgy often lacks the treatment required for durability. That’s where our R&D focus lies.”

Pradhan echoed the sentiment: “PLI schemes are a great start, but we need 360-degree transformation—from policy and infrastructure to skills and systems. Electronics manufacturing is still nascent in India. We need to ramp up not just production, but also component-level innovation.”

From blueprint to reality

While challenges remain—be it in change management, sustainability, or global competition—solutions are within reach. From adopting cloud ERPs and AI-driven quality control to building in-house R&D and remanufacturing practices, the SME sector is carving out its own success story.

As Muthanna summed it up, “Digital transformation isn’t just about software or machines. It’s about mindsets, systems, and a vision for the future. The blueprint is here—now it’s time to build.”