Thoughts shared by Gautam Rajan, CEO - Marsap Services Pvt. Ltd., Mumbai
Although analytics have caught everyone’s attention in the last decade, analytical techniques have existed for more than a hundred years. Raman has been around since the 1920s, while Liquid Chromatography celebrated its 50th anniversary just a couple years back. Moreover, our daily lives are constantly influenced by analytical devices ranging from PUC machines for our vehicles to mass spectrometers used at airports to scan for dangerous substances and chromatographs to test the quality of food and beverages we consume.
As humanity forges ahead, analytical instrumentation, its development and growth are very important to understand.
Before getting into the instruments themselves, it is important that we step back and take a look at the business aspect in the Indian context. The sector in India comprises mainly of Indian subsidiaries of large, foreign companies, distributors of foreign manufacturers and Indian manufacturers. While the last decade has seen the onset of several changes in the industry in terms of technology and business challenges, COVID-19 will be a major inflexion point in how the industry operates.
The first, immediate and short-term impact is going to be on revenues and profits. Capital expenditure by industry is likely to be significantly lowered, thus severely affecting new instrument purchase. Companies like Hindalco, Bharat Petroleum, Apollo Tyres, Tata Steel and Vodafone etc. have already announced significant such reductions. Simultaneously, the government, owing to its increased social welfare obligations and lower projected tax collections, will likely reduce expenditure on research which goes to institutes run by Department of Science and Technology, Indian Council of Agricultural Research and academia like IITs and Universities, which is a major market for analytical and life science instrumentation. To add to this double whammy, the Indian Rupee has depreciated significantly in the last 6 months. Since most sophisticated instruments are imported, customers that have budgeted using older exchange rates are inevitably going to negotiate purchase prices downwards and this is going to affect the instrument companies. A small ray of light in this bleak scenario is that owing to reduced capital expenditure, companies will try to maximise use of their existing instruments leading to greater spending on service contracts, calibration, spares and consumables to extend the utility and life of the equipment.
The long-term impact will be seen by the deviation from traditional business models. We can take the sales process to illustrate our point. Historically, given the high level of custom requirements and individual applications, there is a very high degree of face-to-face meetings in the sales process. Many instrument companies over the years have invested in regional, state or even city offices to cater to this need. Other companies that do not have the wherewithal to invest in multiple offices, invest in travel by sending their people to meet their customers. The lockdown has forced businesses and their clients to interact through digital communication channels, and in a sudden twist of fate, proven that companies can, in fact, do away with many unnecessary face-to-face meetings.
A similar but much more deep-rooted change is likely to happen in the repair and maintenance of instruments. Much like the sales process, servicing of these instruments has required the physical presence of an engineer from the manufacturer or the distributor. A minuscule number of organisations have in-house expertise to handle technical issues that may arise. Thus, service and maintenance of instruments formed important revenue centers for instrument companies. In the wake of COVID-19, instrument companies have come out with innovative digital ways to assist their customers in resolving such issues. The point to note here is that the actual work was done by the customers themselves, albeit under guidance. This has long been a pain point as customers have expected the instrument companies to handle even a simple process as turning the screw. In many countries, analytical instrument users handle basic troubleshooting, repair and maintenance themselves, either learning from the user manual or by contacting the supplier remotely. This model looks increasingly promising over the longer term, as customers will chose to minimise exposure to outsiders as far as possible in order to minimise risks to their own factories or research centers. This has the potential to lead to unbundling of pricing of instruments and allied services and to modify service revenue models of many companies.
A potential opportunity that we feel entrepreneurs and technologists should tap into includes creating instrument simulators using 3D imaging and holographic tools to help the instrument companies and their customers for training, repair and maintenance.
Coming to the instruments themselves. These analytical instruments are being developed with remote connectivity and constant interface with other devices, like smartphones and tablets. Smart instruments can automatically schedule calibration and send alerts for preventive maintenance. They can also wake up at a pre-scheduled time and start the work without the presence of an operator. This trend is more prevalent in regulated sectors like pharmaceuticals and clinical diagnosis to ensure traceability and accountability. Paradoxically however, most of these instruments are currently accessible only in standalone mode at worst or in a LIMS (Laboratory Information Management System) as a part of an enterprise-wide network at best. This is primarily because of data security and confidentiality concerns. Also, most instruments do require a significant amount of user intervention, for example, in the case sample preparation, loading, removal and cleaning, etc. Instrument manufacturers are already addressing many of these issues and the current situation will only accelerate the pace of development in these domains.
Higher levels of automation and connectivity will be the norm in analytical instrumentation in the years to come. Firmware and software will be increasingly powerful in instrument control and data analysis and the use of AI could even eliminate user judgment in analysis of the results and tasks like accepting or rejecting samples. Development of remote access tools without compromising data security and confidentiality, building AI paradigms for results analysis, workflow automation, incorporating instrument self-checks and remote alerts for maintenance, calibration, etc. are the potential opportunities for technology companies.
All said and done, there are interesting times ahead for the industry, especially in terms of its ability to collaborate with digital technology companies to change the very ecosystem that it operates within.
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