Interviews

Heading the Indian office of The German Engineering Federation (VDMA) as Managing Director

QUESTIONNAIRE

1. Your views on the global economy if you have to compare the Indian and the German manufacturing industry, what are the differences and what are the similarities

The Small and Medium Enterprises (SME) play a vital role in the economic progress of not only the developing countries but also for the developed countries. This holds true for the manufacturing Industry in Germany and India.

Successful SMEs drive inclusive growth resulting in overall prosperity and balanced development. Certainly the strength of both the German and the Indian Manufacturing industry lies in the SMEs.

SMEs sector in India contribute around 38% of the nations manufacturing output and 35% of the exports. Even within the 6000 odd German Mechanical and Plant Engineering companies, predominant are the SMEs

Further both German and Indian manufacturing industry boosts of the availability of well qualified technicians and engineers.

The difference in the Manufacturing Industry in both the country lies in the economies of scale, investment in Research & Development and labour productivity. Whereas the Germany has one of the highest productivity rates in the World, India lags below the world average in productivity.

Especially in the manufacturing industry, Germany has a well developed network of Associations and Federations, which cater to the needs and requirements of the Industry. In India there is certainly scope of forming a unified body or Association catering exclusively to the manufacturers.

2. What according to you is the status of the Indian manufacturing sector given the global slowdown? What should the companies do to cope up with this crisis?

Functioning in a global economy India cannot be isolated from the global slowdown. However I think India is comparatively better off than the economies of the developed countries.

The biggest saviour for us is the huge domestic demand. Since in manufacturing sector, we are not a predominantly exporting nation, the global meltdown would not affect us so strongly. Further this should help us to recover also faster from the downtrend.

The Indian Manufacturing industry should utilize this slowdown to their advantage. The consistent growth in the last 7 -8 years have hardly given the manufacturing industry a breather as it was always about meeting the delivery deadline and increasing production.

Now is the time to do some introspection and look into issues like training of the employees, best utilization of the available manpower and financial resources, diversification and new opportunities.

Further customized solution and value added propositions are the need of the hour.

Infact for Indian Manufacturing companies with global aspirations, this could be the opportune moment for overseas acquisitions and mergers.

Hence the Indian Manufacturing Industry should use this period, to reenergize themselves in preparation for the take off once again.

3. India today is one of the comparatively stable economies of the world. How can this country grow from strength to strength from here?

One of the biggest hurdles in growth of the country is infrastructure. This is not only affecting the manufacturing industry but hampering the overall development of the country.

Although with projects like Golden Quadrilateral, N-S, E-W corridor, Greenfield airports, modernization of existing airports, improving port and handling facilities, the government has been looking into this aspect, however this is not enough. Much more needs to be done and done at a faster pace to maintain and increase growth.

The government should work to facilitate investment in new projects and help in capacity expansions as this will not only boost growth but will ease inflation. The implementation of few large projects would send good signals and will automatically build up demand.

With the rapid growth the country has been undergoing and would undergo (not withstanding the pause at present), the requirement of qualified and skilled manpower would be enorm. India needs to augment the technical training institutes. One of the reasons for the success of the German Machinery Manufacturing Industry as global market leaders lies in the dual training which leads to highly skilled manpower.

A closer cooperation between the technical institutes / universities and the industry is a must to groom out graduates with requisite skills to face the challenges of the industry in a global environment.

4. What according to you are the perfect ingredients to succeed in this global marketplace?

A single ideal recipe valid for all enterprises does not exist. The choice of ingredients depends on the specific market conditions. But many of our member enterprises have some ingredients in common: They produce the highest quality, offer tailor-made solutions and are a reliable partner to their customers in order to maintain a sustainable relationship. Further they believe in value proposition.

The high export quota of German machinery manufacturers speaks of their commitment at global level and the cutting edge technology they offer.

5. What has been your organizations strategy to achieve and retain the leadership position over the years wading all kinds of hurdles and crisis?

The investment in Research and Development so as to offer products of the highest quality and latest technology has given our member companies the leading edge.

This has also been facilitated by the close cooperation between the Industry and the R&D institutes. New projects are conceived together and then funded by the industry. This gives thrust on progress and innovation.

The highly qualified manpower and the on-hand training under the motto of learning by doing has helped create an effective and efficient work force with high productivity.

Further the success of our member companies can be attributed to their flexibility. The customers are conceived as long term partners in progress.

6. Next practice development isn't about making something more efficient; instead, it is about a fundamental transformation of the core business activity. What would be the best example in this regard?

The engineering industry has a lot to offer both to society as a whole and to the customers. VDMA aims at providing technology for the people. Here, large companies together with the wide variety of small and medium sized companies which form the backbone of our industry are equally involved.

A good example would be the constant creation of new specialized associations such as Industrial Communication and Micro Technology and initiatives like e-market which reflect the industry's dynamism.

Competence in microtechnology has become a key to innovation and competitiveness in modern engineering. Hence this newly formed association offers the companies the opportunity for focused analysis and penetration of the markets.

Virtual marketplace is growing in importance. The VDMA e-market initiative as a source of information helps the customer to make a selective choice that enables him to pick the optimal product regardless of the manufacturer. Hence it is a win-win situation for the manufacturer and the customer.

7. Please list five best practices that VDMA follows

 

  • Service to our members by means of market information, market access etc
  • Creating an optimal platform for our enterprises where even competitors sit together, exchange ideas and work together. VDMA is the industry's largest network in Europe
  • Offering the members a global network through the overseas office like the Offices in India, China, Russia, Japan & European office in Brussels. In India VDMA has offices in Kolkata, Delhi & Bangalore
  • Reflect the variety of customer-supplier relationships along with the value added chain and make cooperation possible both within and beyond the specialized sectors
  • Concept of technology for you and me. VDMA has formed R&D groups within the sectors where members collaborate with each other as well as with technical institutes to develop new energy efficient technologies which would benefit the industry as a whole. VDMA is committed to shaping the future of business while providing technology for the people.

 

8. Talking about next practices, as the profound management guru Prof C K Prahalad has strongly recommended a shift from a firm-centric view of products to co-creation of value. Taking this as the guiding light, how can we ensure sustainable future ahead?

More than ever, day-to-day business, the day-to-day business that determines whether you stay in business, is characterized by direct competition for orders, capital and the best talent. More than ever the companies in the capital goods industry are facing the challenges of complex mechanisms of global markets for goods and services.

Hard-earned competitive advantages are eroded ever more quickly by the speed of technical progress, global shifts in added value chains and new forms of international labour division. Lasting success is often only possible by means of strong focus on your own core competencies

9. Please list 5 latest trends and technologies doing the round in German manufacturing?

The Technology Platform Manufacture Germany elaborated a Strategic Research Agenda (SRA). The 270 manufacturing companies involved in the process defined the most important research topics of German manufacturing industry as follows:

  • Intelligent Products:
    Future products will provide cognitive aspects and will be able to receive and handle manifold information.
  • High Performance
    Integration of highly dynamic components into the production facilities and the maximisation of performance, flexibility and quality of the associated production equipment.
  • Energy Efficiency
    Alternative technologies to generate, distribute and use energy.
  • Product Design and Configuration
    Product designs with half of the development time and directly resulting in the construction of customer-specific products with highest reliability.
  • Adaptive Production
    Adaptive production systems will continuously adapt their structure and configuration to their tasks and environment.

 

10. How do you foresee the Indian manufacturing sector 5 years down the line:

As mentioned earlier, the Indian Manufacturing sector has huge potential. The growth can be accelerated by favourable government policies, infrastructure development, reforms in labor laws, easing out of bureaucracy and regulatory burdens.

The Manufacturing Industry should leverage on the advantage of low cost qualified work force. However to be global players and to cater to the international market, issues like productivity and quality have to be sorted out.

Alongside, investment in modern technology and best practices in manufacturing is necessary to make products of international standards.

In the automobile components sector, India is seen as a favourable outsourcing destination. We should use this advantage to make the world look favourably at India as a source for machine building and quality production.

The Manufacturing Industry is like a ball which has started rolling. If the government agencies and industry best practices can provide it the favourable incline, the ball can only gain momentum.

11. On a personal note, please tell us about your likes and preferences on the following:

    • a. Your dream car and why.

      Mercedes Benz. It signifies all the virtues of Made in Germany robust, reliable and efficient but at value price

 

    • b. The book that inspired you and why.

      You can Win by Shiv Khera Because of the easy to read and practical approach which gives the winning edge

 

    • c. Your favorite destination in the world and why.

      Andalucia (Southern part of Spain) Because of its varied landscapes, the benignancy of its climate and the friendly character of its population

 

    • d. Your mentor and how has he/she made a difference in your life.

      Father of the Nation M.K. Gandhi For his indomitable courage and spirit to challenge the might of an empire and fulfill the aspirations of the whole nation

      Here I would like to quote the final tribute paid by the famous scientist Albert Einstein Generations to come will scarce believe that such a man as this walked the earth in flesh and blood.

 

  • e. The ideal businessperson and why.

    There is of course no set definition of an ideal businessperson but some denominators are dominant and repeated in literature on business such as making a profit, competing and networking.

    Here I would like to single out Dhirubhai Ambani for the metamorphic rise from a humble beginning to create a truly global corporate group and showing a dream of prosperity and wealth to millions of countrymen.

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