INDIA IS ARRIVING ...... COME MAKE IN INDIA

INDIA IS ARRIVING ...... COME MAKE IN INDIA

 

 

In May 2014, as the new stable government took oath in Delhi, there was a wave of optimism and excitement that pursed through Indian veins. Of the numerous announcements made by the new government the one that generated the most news, was in regards to the boost to the manufacturing sector. The current prime minister is very keen to turn India into a manufacturing hub and he even announced a grand initiative to that end titled 'Make in India'.

The Manufacturing promise

All the optimism notwithstanding, there are still some critical areas of concern that need to be resolved. For instance, the latest India Development Update of the World Bank shows how manufacturing in India, that accounts for around 16 per cent of GDP, has stayed fairly unchanged and is relatively lower in comparison to names like Brazil, China, Indonesia, Korea and Malaysia. Though India's longer term growth potential seems high due to favorable demographics, relatively high savings, domestic market integration, improved growth prospects in the US as well as stronger remittance inflows and declining oil prices.

 

Not only that, as China's lead in competitive quotient is facing question marks, India's name pops showing the usual advantages of costs, labour arbitrage, manufacturing efficiency as well as unusual factors like strong inventory base due to local manufacturing, component strengths and positive differences on shipping/freight factors.

In fact back in 2012, McKinsey analysis had hinted that rising demand in India, together with the multinationals' desire to diversify their production to include low-cost plants in countries other than China, could together help India's manufacturing sector to grow sixfold by 2025, to $1 trillion, and creating up to 90 million domestic jobs.

In spite of all the favorable factors, what has then stopped us from being the manufacturing hub of the world, say like our Mandarin neighbor?

The fact of the matter is that the world of manufacturing is not exactly a sibling of the outsourcing industry or agriculture sectors that we have mastered well so far. India seems to have missed one essential aspect even as it boasts of the rest like labour and cost arbitrage, which is technological and infrastructural resiliency.

Working on the nuts & bolts

India today exists in a world that is surrounded with new forces that shape its fate – globalization, lean manufacturing, real-time/follow-the-sun standards of collaboration and pre-emptive customer insight instead of post-launch market feedback for R&D and product lifecycles.

Hence, that brick-and-mortar shopfloor has been accosted with new imperatives suddenly. It is not enough for engineers to just design, but they have to think ahead of customers and guess with unrelenting accuracy as to what works with them or what does not. It would not suffice for assembly lines to ship a certain delivery in time unless it rigorously hugs some very exacting standards of quality and UI along the way. Resources will have to ensure productivity but they would be expected to cross new levels of competitiveness and diversity-tapping. For factories to stay relevant, they would have to be in sync with their suppliers, their ecosystem partners, their customers, the chain-influencers, the regulators, the procurement points, and even some indirect stakeholders.

Tech as the differentiator

All these levels of depth and breadth can be facilitated tremendously with answers like Cloud and new-age collaboration. With Cloud you need not invest disproportionately into more bricks or metal just to stay shoulder to shoulder with other biggies. Cloud offers the elasticity and the scalability that a player from India or any segment can leverage to its advantage. It helps traverse global boundaries as well as fringes of maturity so that one can leapfrog to new levels despite one's current geographical co-ordinates or stage of manufacturing strength.

World's top-notch brands from smart phones to fast cars are already tapping into the advantages of smart sourcing and hence very soon the product in your hand could very well read 'made-in-cloud' instead of 'made-in-Taiwan' or 'made-in-Germany'. The winner of this race would, hands-down, be the one who can add some native, quintessential magic over that label.

India, with its epic wealth of diversity, inveterate resilience and amazing lineage of overcoming struggles, can very well add that extra stripe on every barcode. But to be able to do that, it would need to have common denominators like technology, firmly under its belt.

'Make In India' is not a fantasy, it is not something that will happen in the next few years, it's happening right now, right around, as we read these lines.

Let us allow the power of technology to act as a super-catalyst in this almost super-natural journey of the world's next superpower. India is arriving.

 

MONEYCONTROL.COM