Indian companies are winning over their mnc counterparts in sector after sector. There’s more to come, going forward.
By Jayashree Kini Mendes
Aequs has imported in advanced machines that helps it in complex machining for the aerospace industry.
Every so often a country comes along
whose economic transformation has a vast impact on the world’s manufacturing system. For the past generation that country has been China. Next it will be India. But the country on her own cannot catapult herself to competing with advanced economies. She needs a boost from people in power who can lead her in a specific direction. India’s leaders have long said they are committed to employment, but have shown little stomach for the economic upheaval rapid job creation entails. For years India’s politicians have preferred economic palliatives such as NREGA, a giant scheme that guarantees work for the rural poor, and subsidies for the needy.
But all this has not deterred Indian-origin manufacturing companies to move ahead and create gigantic companies. Be it in automotive and its components, aerospace, FMCG, cement, iron & steel, Indian companies have withstood several challenges and marched ahead. Today, most Indian companies have plenty of ammunition to compete with MNCs and those based overseas.
Speaking about the advantages that Indian companies have, Dr Rakesh Sinha, Head, Global Supply Chain, Manufacturing & IT, Godrej Consumer Products Limited, says, “What sets us apart is our deep understanding of Indian behaviours, culture and customs which influence the demand and supply of our products at the marketplace. As we started our business in India, we also have a thorough understanding of the government and legal regulatory requirements as well as workmen attitudes, which help us in running our manufacturing units smoothly.”
It has become part of business lore now how a sleepy elephant has metamorphosed into a hungry tiger since 1991. But little is spoken of the effort it has taken India to make the transformation from a protected, closed economy to one that catapulted itself to global developments. One Indian entrepreneur who runs his operations out of a small state is a fine example of how he has built world-class operations and tied up with some of the highly reputed companies in the world. Ask him the advantages of being an Indian company and Arvind Melligeri, Chairman & CEO, Aequs, says, “Indians understand ground reality better than MNCs who have established themselves in India for decades. Today, MNCs have donned on local garb and hire local guys that aids in their progress in India. But in the aerospace industry, the industry value stream is more complex. A lot of interdepencies exist in the supply chain and it is not easy to establish the whole ecosystem to deliver the value that they can deliver abroad. On the other hand, Indian companies can leverage a smaller supplier in the value system and deliver those values much easily.”
Most companies we spoke to also mentioned that financing to grow the business further is easily accessible to Indian-origin companies as compared to MNCs. It is the reason the latter is compelled to pump in investments into the country they have ventured into.
However, considering that many Indian companies today have plenty of international exposure, they are adroitly using it to their advantage. Satish Sharma, President, Asia Pacific, Middle East & Africa (APMEA), Apollo Tyres, says, “We have had sufficient international exposure, though not to the extent of some of the large MNCs, and have been using some of those learnings from other geographies to our advantage in India. Having said that, every market is different. In India itself, the preferences, practices, habits and usage patterns are different within close distances. The complex country that India is, either has very high variables or doesn’t have it at all. Even the expat CEOs have reiterated the fact that India is a difficult and very complex country. However, such complexity offers us a unique advantage over the MNCs, and helps us in shaping our strategy.”
An edge over MNCS
BEL makes some of the most sophisticated equipment for defence electronics.
It is a known fact that the agility of Indian companies stands unmatched even at the global level. Foreign companies, in contrast, often falter when faced with the inherent complexity of the Indian market. Speaking of the strengths of Indian companies, GK Pillai, MD & CEO, Walchandnagar Industries, says, “Indian companies are here to stay unlike MNCs who may be here for a short stay and mainly for economic reasons. The Indian companies, particularly those already doing business, are aware about the specific requirements in technical and quality aspects and are ready to adapt to these needs. The government’s focus on Make in India or indigenisation is also a fillip to Indian companies over MNCs. Moreover, the strong relationship with Indian customers and working for a “cause” puts Indian firms on a different platform as profit-making is not the only objective.”
Over the years, Indian companies have sustained their local focus with sensible forays overseas. There are fine examples of Indian companies who have thoroughly excelled in product R&D and development that has caught the eye of MNCs in India and overseas companies. Nataraj Krishnappa, Director other units of BEL, says, “As a PSU, when we compare ourselves to an MNC, we find that we have tremendous potential. There is a core competence that we bring to the table and a thoroughness in the subject we are doing. Over the last few decades, we have built ample resources.”
Bharat Electronics Limited was set up in 1954. At that time, even the private sector did not exist to the large extent it does now. Besides some of the Indian conglomerates, there was only the public sector. Over a period of time, BEL gathered tremendous amount of resources in terms of physical assets and capital assets that it has in each of its units. That gives the company an edge over MNCs.
This is how the shop floor of most Indian manufacturing companies look.
Having toured several manufacturing plants (large and small) over the last four years, it is visible that Indian companies are adopting some unique processes that make them distinct. Some of the quantifiable progress are towards fully integrated operations that effectively recognise and efficiently use the synergy between machines, processes and the jobs on the shop floor. Guruprasad Rao, Director & Mentor, Imaginarium India, says, “We are into enterprise 3D printing that calls for being lean. It is the reason we have an agile manufacturing plant with 24 production 3D printers with a highly skilled work force. We are unique in the world due to the projects we undertake, are application experts making inroads into every business which needs agile manufacturing solutions. Besides, we have an integrated state-of-the-art facility that is a one-stop shop for mass customisation for making even a single part. There are a fleet of 3D printing technologies that complement each other.”
Highlighting some of the Indian work methods, Sinha says that GCPL has a unique shop floor employee engagement process, implemented as a part of its Total Quality Management (TQM) and Total Productive Maintenance (TPM) processes. It aims at leveraging the collective knowledge of all the employees working in a manufacturing unit to improve its operations. “We encourage our team members to come up with new ideas to improve the operational productivity at our units. They align the plant head and implement ideas. Many of our workmen have won awards in Quality Control competitions at a national level,” he adds. Another unique process is the debottlenecking of its manufacturing capacities. The company uses Theory of Constraints (TOC) to identify capacity limiting constraints in its production lines and deploy cutting-edge processes to debottleneck them at zero cost. It’s an ongoing process which aims at increasing productivity of critical lines by 10% per annum. It has used this process for many years and improved the productivity of several critical lines by more than 100%. Apart from capex avoidance, it also leads to better labour productivity, lower energy consumption and reduced cost of operations.
Speaking of the unique processes followed at the plant, Sharma says, “At our plants, all the 4Ms of manufacturing (man, method, machine and material) and their every aspect are covered under Apollo Manufacturing System (AMS). The AMS is an outcome of years of experience of best practices across plants in various geographies. We have moved from firefighting on manufacturing processes, to a stable daily management and continuous improvement. This is evident in our efficiency and productivity improvements over the years. Our manufacturing units have come up in different timelines, and for every unit, we have used backward learning. While the plants built in the 70s have adopted the latest learnings, the new facilities have been built with Industry 4.0 concepts.”
Most Indian companies are also adept at creating novel products through impeccable designs. “Even before India began manufacturing, we have been providing designs and service to global companies. It’s sad that we have not been able to go all the way from concept to the product, but we can do the facilitation and come up with digital designs of the product. That is India’s strength,” says Melligeri.
Design and services have always been the forte of Indian companies.
One Indian company that has practically galloped its way to popularity is Maruti Suzuki. Speaking of some of the practices it has put in place, Ravindra Dayal, Executive Director, Maruti Suzuki, says, “When we design a car, we work closely with the customer needs and then with the engineering and manufacturing team. Various techniques are used to get the perfect car. We also have world-class employee training practices in place that foreign manufacturing companies have taken a cue from.”
In a world where the term emerging markets is used often and loosely, India is frequently clubbed with Brazil, Russia and China. How different the Indian market is, is something that is rarely understood. Krishnappa says, “Post-independence, the government thought of giving defence a boost. We were basically a corporate manufacturing organisation and slowly migrated to product manufacturing and from there to systems and then radars and big communication equipment. Today, we have grown to make surveillance equipment for the Indian army, among other big things. Our core competency is R&D, design, software and testing.”
Walchandnagar Industries has extraordinary expertise in fabrication and machining of heavy jobs with complex geometry and involving exotic materials. Such a capability is available with very few companies in the country. The processes, special tooling, manufacturing technologies, skilled manpower, state-of-the-art manufacturing resources are already delivering/fulfilling customer expectations. Customers’ demands of higher production rates for missiles sections, space launch
Most Indians now consider buying Indian goods as it means prompt service.
vehicle parts, defence equipment are being met this year due to close co-ordination, higher efficiency, almost zero defects/rejections, continuous improvements, R&D and so on, says Pillai.
On the other hand, Apollo Tyres’ Sharma says that his company’s R&D team is always working towards creating better and technologically advanced products for our customers worldwide. Developing tyres with low rolling resistance, better fuel efficiency and using environment friendly raw materials are all being worked upon by the R&D teams. “We practice a very strong Quality Assurance system and ensure a proper handshake between the processes and people. Our QA has been acknowledged by OEMs, some globally as well, by choosing us as their preferred business partners. While we have made rapid developments on the quality and safety journey in the last decade or so, both need to be nurtured further to cover newer grounds.
This only goes on to show that Indian companies, if guided well, can continue to be a trailblazer in more ways than one. But the ball is in the government’s court to ensure that it happens.