India Competitiveness Vs China

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India Competitiveness Vs China

• Dr. Guy Rabbat

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India needs manufacturing to compete for the
local and in the global economies

• India must not cede the ground to China when it
  comes to manufacturing
• India must use its Information Technology
  strengths as a competitive advantage in
  manufacturing
• India must remove industry impediment to be
  competitive versus China

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Summary

• India will do better by
• Selecting the right product mix
• Enabling information technology (IT) for data
  capturing and information flowing
• Improving the quote hit rate
• Improving the supply chain efficiency
• Improving productivity with the use of IT tools
  and systems such as ERP

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Requires

• Product Selection Criteria
• Data Information Technology
• Efficient Supply Quotation
• Efficient Supply Chain Management
• Productivity

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Product Selection Criteria Manufacturing
Market Segmentation
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Select a Product with low Cash Cycle - Convergence
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Products Selection Criteria

• Stay away from me too products with low margin
  and too much competition.
• Target customers looking for high quality
  products at reasonable prices.
• Avoid products which have long lead time
  components as far as possible to reduce
  inventory.
• Tie up third party vendors with JIT capability to
  avoid large inventory stocking.
• Look for additional revenue from customers who
  need post sales support at site. If it requires a
  large work force in the field, tie up a third
  party contractor for such services.

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Data Information Technology

• India has a very high level IT talents compared
  to China.
• But not effectively used for increasing /
  improving National Productivity.
• In many situations lack of data and information
  hamper the decision making process
• Indian Manufacturers lack the shop floor
  management data / information and further
  analysis

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Quotation Execution and Support

• The quote to order hit rate is very low
• Analysis process is missing
• Need for Rapid/ Fast/ Intelligent quote models

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80 increase in RFQ volume every quarter in 2007
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Efficient SCM - Key Findings

• Excel in SCM Supply Chain Management not just
  Procure, Stock, Manufacture and Sell but should
  be Efficient, Competitive and Productive
• Vendors should lead by service in moderate-volume
  product segments, becoming true partners to their
  OEM customers.
• Vendors that have significant exposure to
  high-volume/low-mix product segments should lead
  by design.
• Vendorsand the industry as a wholemust dispose
  of excess capacity.
• Implement operational improvements.

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China manufacturing environment

• China is practically now the factory of the world
  in high volume electronics and mechanical
  products with over 20,000 companies and 30
  millions workers involved. It is a massive
  undertaking.
• All these workers work truly almost non-stop
  and live on factory premises with 5-8 individuals
  per room in massive dormitories.
• Total equality exists between women and men,
  workers and managers.
• All are dressed the same and live together in
  these massive dormitories, where food and full
  accommodation are provided.
• These workers are between 17 and 27 years old and
  are expected to work for an average of 7 years in
  12-hours days.

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China Manufacturing Environment

• The discipline is exceptional. For example, start
  time is punctually at 658am and precise
  repetitive conditions in thousands of stools,
  well designed by management breaks are 10 minutes
  in their individual locations.
• Work is done is very for maximum efficiency and 3
  shifts on 24/7 working environment.
• China is covered by massive and extensive
  highways and construction is simply gigantic.
• We must tap in that incredible energy and utilize
  it to our advantage. We should not limit
  ourselves by buying our vendors.

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Summary

• India can do better by
• Selecting the right product mix
• Enabling IT for data capturing and information
  flowing
• Improving the quote hit rate (SQM)
• Improving the supply chain efficiency (SIVA)
• Improving productivity with the use of IT (ERP)