Can Bharat Rule Manufacturing?
Posted : October 21, 2005 at 10:34 pm [IST]
I don’t know whether India can dethrone China in manufacturing, but for sure India can and must become a significant player in manufacturing. I have been writing about it occasionally.
NRI industrialist and also British Ambassador For Overseas Business Lord Swraj Paul recently made a statement that confirms my belief.
“India is the only country in the world, which can take on China in the manufacturing sector provided there is a change in priorities and mindset in the government and industry. A developed manufacturing sector is the strength of any country’s progress as it is the only sector, which provides regular jobs for the workforce.
All other sectors including the IT do not provide stable and permanent jobs. The example of China is there for all to see how a strong manufacturing sector has taken the country on the path of solid progress.
We had set up a single automobile parts plant in India in 1994. For some years it was functioning merely normal. During the past three years, our turnover has increased from Rs.60 crores to Rs. 300 crores. During the next two-three years we are aiming at a turnover of Rs. 1200 crores. We are now setting up ten to twelve plants in India simultaneously.”
Indian manufacturing sector might not have many Japanese enterprises here in India, unlike the other Southeast Asian countries. However, Indian small and medium companies as well as many bigger ones picked up Japanese manufacturing management tools and techniques such as Kaizen and TPM (Total Productive Maintenance) religiously and used them too quite effectively at the plant level. Many Japanese management gurus visited India and through the associations such as CII, SIAM, ACMA, IMTMA lectured and trained the managers of many companies. It almost became a fad to undergo these trainings. It really influenced and brought about a sea change in the quality of operation management.
Today on overall, the Chinese goods may be noticed for its abundant availability, but certainly not for its quality. I only wish that Indian managers don’t compromise on quality and must keep Japanese as their benchmark.
Recently, Rajivnayan R Bajaj, Joint Managing Director of Bajaj Auto Ltd. spoke about why Chinese goods are so cheap.
“China can afford to price so competitively because it does not take on certain costs, such as the cost of customer insight and product innovation, and of making mistakes until you get it right.
The absence of IPR (Intellectual Property Rights) means that products are quickly and easily copied. When Honda launches a product any where in the world, China copies it without delay.
Chinese motorcycle manufacturers don’t make huge investments in marketing. In China, customers’ expectations of products are not high. If a product breaks down, parts are replaced. There is no concept of service in the automobile segment. They don’t spend on under-standing the customer. Copying collapses time and eliminates the learning curve right through the supply chain.Saving on tax is another area. A company declared production of 300,000 units but made 500,000. Labour costs are lower, and more importantly, labour is largely subservient.
If one looks at the balance sheets of Chinese companies, not too many are making money. One Chinese company was recently taken over by an Indonesian group. Also one must compare like to like, component to component.”
A typical manufacturing company has lesson from Bajaj Auto.
“At Bajaj Auto, our manufacturing operations are characterised by a mix of high volume products from relatively simpler but older facilities and smaller volume products from complex new facilities, thus demanding very high workforce versatility.
We found TPM’s cross-functional, bottom up, empowering, detail oriented, fact based, analytical, and investment light approach to be extremely simple and sharply result oriented. TPM provokes awkward introspection. For example, previously certain processes continuously yielded 2% defective components. Professor Yamaguchi embarrassed us by observing that extraordinary skills were required to ensure such a precise failure rate. It should be much simpler to achieve 100% OK.
Needless to say, this was quickly achieved through data stratification, phenomenon identification, root cause analysis and implementation of not only appropriate counter-measures for immediate correction, but also preventive action for long term sustenance. TPM focuses effort on improvement in PQCDSM (Production, Quality, Cost, Delivery, Safety and Morale) through the elimination of sixteen losses.
Cells that implement TPM typically realise 50% increase in capacity and in OEE (Overall Equipment Effectiveness), zero defect quality, 20% conversion cost reduction, unfailing delivery and zero accidents — all through numerous Kaizens (improvements) aimed at the elimination, reduction and prevention of waste.”
Bajaj Auto, Hero Honda, TVS Motors- all are seriously and effectively using Japanese operation management tools. And I wish Indian manufacturers kept on the right track of emphasizing on improving the processes rather than hankering for the quick results. It will win the race.
- Indra
Category: Manufacturing |
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