The manufacturing sector in India has made very little contribution to India's GDP growth over the past few years. Between 2003 and 2009, the GDP of the manufacturing sector has grown only two points while the import of plant and equipment has grown nearly by a multiple of eight. The slowdown in the growth of the manufacturing sector is mainly due to increased global competition, the non-availability of skilled workforce and uninterrupted energy supplies and the lack of public infrastructure. Every manufacturer or supplier is challenged by a multitude of local conditions, infrastructure constraints, customer preferences and an increasing set of market demands for personalised products and customised services.
However, the future holds great potential. With new markets developing globally, the demand for products and services is expected to be unprecedented. To remain competitive in a dynamic and globalised economy, India has to focus on innovation and collaboration in terms of operational excellence, productivity improvement and talent development.
Looking at a brighter future
According to Deloitte's Global Index 2013 for 38 nations, India is the fourth most competitive manufacturing nation behind China, the US, and Germany. A report by McKinsey & Company believes that India's manufacturing sector has the potential to create up to 90 million jobs by 2025.
India is fast emerging as a major destination for high-end engineering, research & development (R&D), and product/service/process innovation for most companies across the globe. With a footprint of about 750 captive engineering and technology centres of major multi-national companies, of which close to 350 are focused on R&D, India is developing key competencies needed for future growth. According to an estimate by the National Association of Software and Services Companies (Nasscom), the value of India's engineering R&D sector is around $10 billion currently and is set to reach $45 billion by 2020.
Against this background, restoring growth and achieving sustainability require a strategic shift in mindset as well as strategy devised by the manufacturing companies. The industry needs to address the challenge of producing more while consuming less energy and generating less waste.
The road ahead is tough
Innovation has clearly become a key determinant of success for every major economic sector today. R&D and innovation together can create a robust pipeline of newer and more efficient products.
Given the increasing shortage of critical natural resources and the need to compete on a global scale, creating compelling customer value propositions (high value at low cost using fewer materials, lesser energy and less time) becomes essential for an organisation's success. History has proven that organisations that do this well and in a consistent manner enjoy continued customer confidence and sustained growth.
Companies today need to look at not just product innovation but also process and operational innovation to achieve higher efficiencies and increased productivity. Optimisation of resources lies at the core of any enhancement effort. This includes better utilisation of capital, deployment of advanced technologies, increased use of simulation and modeling, and a high-talent engineering workforce, to name a few.
The other pillar on which to improve the sector's current standing is convergence. The present and future is about convergence technologies and collaborative approaches to creating solutions as markets demand end-to-end solutions. The solutions of the future may not be the forte of single entities or even large organisations, but may be generated by the pooling of niche competencies and win-win partnerships. This problem gets further compounded in the context of emerging economies. New innovations aimed at addressing issues of emerging nations are expected to emerge from a knowledge economy that reinvents itself almost every two to three years. The pace is only expected to increase. Industries are expected to move toward creating platform solutions that deliver converged technology and customisation. Organisations that take the lead in creating these extensible platform solutions are expected to be seen as industry leaders.
Paparao Kodali
VP & General Manager, Ingersoll Rand Engineering & Technology Centers, India
However, the future holds great potential. With new markets developing globally, the demand for products and services is expected to be unprecedented. To remain competitive in a dynamic and globalised economy, India has to focus on innovation and collaboration in terms of operational excellence, productivity improvement and talent development.
Looking at a brighter future
According to Deloitte's Global Index 2013 for 38 nations, India is the fourth most competitive manufacturing nation behind China, the US, and Germany. A report by McKinsey & Company believes that India's manufacturing sector has the potential to create up to 90 million jobs by 2025.
India is fast emerging as a major destination for high-end engineering, research & development (R&D), and product/service/process innovation for most companies across the globe. With a footprint of about 750 captive engineering and technology centres of major multi-national companies, of which close to 350 are focused on R&D, India is developing key competencies needed for future growth. According to an estimate by the National Association of Software and Services Companies (Nasscom), the value of India's engineering R&D sector is around $10 billion currently and is set to reach $45 billion by 2020.
Against this background, restoring growth and achieving sustainability require a strategic shift in mindset as well as strategy devised by the manufacturing companies. The industry needs to address the challenge of producing more while consuming less energy and generating less waste.
The road ahead is tough
Innovation has clearly become a key determinant of success for every major economic sector today. R&D and innovation together can create a robust pipeline of newer and more efficient products.
Given the increasing shortage of critical natural resources and the need to compete on a global scale, creating compelling customer value propositions (high value at low cost using fewer materials, lesser energy and less time) becomes essential for an organisation's success. History has proven that organisations that do this well and in a consistent manner enjoy continued customer confidence and sustained growth.
Companies today need to look at not just product innovation but also process and operational innovation to achieve higher efficiencies and increased productivity. Optimisation of resources lies at the core of any enhancement effort. This includes better utilisation of capital, deployment of advanced technologies, increased use of simulation and modeling, and a high-talent engineering workforce, to name a few.
The other pillar on which to improve the sector's current standing is convergence. The present and future is about convergence technologies and collaborative approaches to creating solutions as markets demand end-to-end solutions. The solutions of the future may not be the forte of single entities or even large organisations, but may be generated by the pooling of niche competencies and win-win partnerships. This problem gets further compounded in the context of emerging economies. New innovations aimed at addressing issues of emerging nations are expected to emerge from a knowledge economy that reinvents itself almost every two to three years. The pace is only expected to increase. Industries are expected to move toward creating platform solutions that deliver converged technology and customisation. Organisations that take the lead in creating these extensible platform solutions are expected to be seen as industry leaders.
Paparao Kodali
VP & General Manager, Ingersoll Rand Engineering & Technology Centers, India