ELCIA

President’s Msg: For ‘Make in India’ to succeed

Make in India

Here was someone from a simple background and rose up to be the President of India – Our beloved Missile Man, Dr. A.P.J. Abdul Kalam. He was an example of humility, simplicity, integrity and sincerity. The passion and the missionary zeal with which he reached out to touch and inspire millions of youngsters is legendary.

Sir, we salute you.

One of the slogans that has been adopted by the government and the country now is “Make in India”. There are many aspects of enterprise that we need to master to be successful in the market, of which I will refer to two that are important in this time and age.

The first is productivity.

India is at 16% of Germany’s Unit Labour Cost. India’s cost competitiveness is more to do with lower wages than increase in productivity. How can we achieve higher productivity?

A typical machinist or an assembly-level worker in a manufacturing plant may draw around $3,000 a month in the US or about E3000 in Germany. In India, a similar job would get a salary of Rs.25,000 per month.  However a machinist in the West will be working simultaneously on three or more CNC machines, programming, then loading-unloading components on one CNC machine when others are running.

In India, you find three CNC Machines need three “Operators”, a “Programmer” and a “Helper”!!! Huge difference.

We need to target that kind of productivity. This could be achieved by a combination of stronger product designs using Design for Manufacture (DFM), better process strategies (Lean manufacturing, 5S, 3M etc.), Process control, TQM, Time-engineering, optimal technology interventions and a host of other steps. More than all this, successful outcomes need a positive attitude, mindsets, skills and above all hard work.

If you want to shine like the Sun, first burn like the Sun” – Dr. Kalam

The second is value addition.

While there are many vendors in India who supply components and software services to aerospace companies like Boeing and Airbus, there is huge discrepancy in the value add. A 180 seater, 40-tonne aircraft made of Aluminum, plastic and other materials, would probably cost Rs.20 Lakhs by raw material weight! This is sold at Rs.300 crores each. That is value addition of a whopping 1500 times!!

We need to address the value add issue at the time of choosing a) our product-line, b) our addressable market, c) the ingredients that go into it. Interestingly, high-value products typically require less funding due to high internal free cash generation. However we need to tackle high engineering costs. Subsequently, a focus on strong R&D, productivity, marketing will take us to big time success. Higher product value add will also buffer us from currency fluctuations, sudden dumping or competition and other market forces.

We need to dream big to achieve these goals.

Dream is not what you see when you sleep, it is the one that doesn’t let you sleep” – Dr. Kalam

Have a great month ahead!

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