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Going Up The Value Curve A Guide for Indian Companies in International Business
Adaptiveness is best in systems where elements/pieces are optimally connected. Too rigid connection causes obstructions and too loose a connection results in chaos.The challenge is to first observe and diagnose the latent socio-cultural perspective of society, and see how the target customer fits in there

Textiles and Welspun – a success story for Future?
That is precisely what Mr Jindal latched on to outline Welspun’s journey as an entrepreneurial outfit initially to now being the most preferred supplier for global retailers.

All of the above however didn’t happen in a day, as Mr Jindal noted in his presentation. In 1994 Welspun was worth Rs 90 crore with a net profit of Rs 4 crore when it started in its towel business. From then on, backed by quality improvement at each stage of production, product analysis based on customer feedback, and business through intermediaries Welspun carved out a path that could be a lesson for many of India’s current textile exporters.

But it was not till 1999, that Welspun realised how innovation was the missing link in its business journey. As a result product development and design assumed priority with items like, hygro cotton, zero twist, and blister pile towels coming out as among many of its new products. The results of all this culminated in a design house with 5 people in India and 2 designers each in US and UK

But product innovation alone was not Welspun’s focus. Thus it followed up the above with a host of process and strategy innovations spanning across business functions like marketing as well as using information technology as an integrator. Initiatives like a grid analysis of top retailers and sharing learnings ensured that Welspun’s relationship with its customer retail outlets like Walmart blooming by the day. Welspun plans to grow big 2005 onwards Mr Jindal noted. It envisions installing a 13,000 tonne per annum terry towel capacity and a 35m-metre home furnishing fabric-manufacturing unit in the coming days at an estimated total cost of Rs 400 crore. This should help Welspun expand its reach from its current relationship with 12 of the world’s top retail outlets.

And all this should add to its kitty of awards – which already is shining with accolades like the best Global Vendor Award in 2002 by Walmart or Operational Excellence Award by JC Penney Stores in 2003.

Quality and Customer Service – the Sona Way, the Indian way
If awards however were the benchmark to put your finger on an Indian company – that too in the manufacturing space – don’t miss out on Sona Koyo Steering Systems. From being identified as a ‘global growth’ company at the World Economic Forum in 1997 to being the only steering maker in the world to be awarded the Deming Award in quality in Nov’03 -- Sona now looks forward to 2010 as its defining year, said Mr Deshmukh as it was fully entrenched in its march towards global competitiveness and growth.

Sona’s journey, as was evident from Mr Deshmukh’s presentation at the forum, is marked by three pillars – local presence in the customer’s markets, operational excellence and a global mindset. Thus it is armed with a world scale capacity of plants oriented towards exports, has technical service centres in US, Europe and Thailand besides using the Internet intelligently to build a virtual development centre. This apart, Sona is also exploring joint ventures in Europe. With the help of Mckinsey and global TQM and TPM experts like Professor Y Tsuda and Mr S Yamaguchi of the Japan Institute of Plant and Management Sona has been able to inculcate some best practices in its operations. Thus as ‘practice’ seems to be the buzz word at Sona’s plants from the shop floor employee to the manager at the helm of operations or strategy – kaizen is the way of life for Sona employees.

A result of all this has been evident in a few parameters that Sona measures to gauge the efficiency and effectiveness of its programs. On the human resources side, absenteeism has fallen to 7.1 per cent from 11.29 earlier, as training hours per person has increased to 57.5 from 9.5 earlier. Combine that with innovation, new products now account for 44 per cent of total products at Sona from 11 per cent earlier and that comes with the lead time for development reducing to 5.7 months from 12.3 earlier. Going forward the Sona group has ambitious plans lined up for its Vision 2010. For example the company wants to see overseas sales accounting for 45 per cent of its overall sales in 2010 from 2 per cent currently. Hence it has lined up a capacity expansion plan worth Rs 54 crore, as its export-oriented unit at Chennai has started working. Besides it already has six overseas customers with names like Toyota and GM among them in its kitty.
And don’t miss out on R & D please

And there you go – the global MNCs. They surely could not be left out in times when names like Intel, Google and Microsoft are hogging the Indian R&D mind space as much as players like General Electric or Timken. The name that is the pioneer of innovations in the modern industrial era is Cummins Inc. An independent diesel engine maker Cummins has its unit in India – and in 2004 it set up its R & D unit – the Cummins Research and Technology India to tap India’s scientific manpower.

The fourth speaker of the seminar was Mr John O’Halloran chief executive officer of Cummins Research and Technology India (CRTI) -- presenting his perspectives on why Cummins chose India for its R & D centre and also what could be India’s way ahead in global R & D. CRTI is a 50-50 joint venture between Cummins Inc and Cummins India feeding on Cummins’ global technical centres around the world focusing on specific products or markets. Thus CRTI forms the hub for all Cummins’ technical centres worldwide – across all products and markets with dedicated mechanical design and analysis teams. A ‘virtual locational’ arrangement allows it to rapidly deploy analytical resources worldwide.

India, Mr O’Halloran believes is the ideal starting point for global MNCs looking at setting up R & D centres. Thus CRTI has followed a phased growth path. From an engineering leadership-benchmarking trip to India, in Mar ’03 to approval by management of Cummins Inc in April ’03 of setting up the center CRTI has traveled a long distance. In Jan’04 it saw its inauguration and its expansion in 2005 continues ahead of its plan. Typical challenges though exist for CRTI – in the form of recruiting top talent, on time delivery of process innovations, communications barriers induced by language and time zones, and infrastructural bottlenecks, in which India still lags behind. Yet a set of factors like a large number of highly qualified engineers, excellent academic institutions, English language usage for engineering education, an excellent IT infrastructure he said.

So there you go as the cards got laid out. The speakers shared their lessons – in a world where nations and companies are increasingly trading identities. Come around the next time and Spirit of Success will have something more interesting to reveal from its hidden basket of aces.

Bhaskar Chakravorti – Innovation Guru from Monitor Group Mr Kiran Deshmukh – COO of Sona Koyo Steering Systems Limited – Case Study of Innovation used as route to global ambitions Mr Akhil Jindal – President of Welspun Group – offering lessons for textile players in India Inc for trade competence and Innovation Mr John O ‘Halloran – CEO of CRTI talking on how India is becoming the R & D hub for global MNCs like Cummins

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