case study india is a competitive manufacturing

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Case Based Questions (MCQ)

• Ex 5.4 (Optional)

Question 1 - Case Based Questions (MCQ) - Chapter 5 Class 10 Arithmetic Progressions

Last updated at April 8, 2024 by Teachoo

India is competitive manufacturing location due to the low cost of manpower and strong technical and engineering capabilities contributing to higher quality production runs. The production of TV sets in a factory increases uniformly by a fixed number every year. It produced 16000 sets in 6th year and 22600 in 9th year.

Based on the above information, answer the following questions: googletag.cmd.push(function() { googletag.display('div-gpt-ad-1669298377854-0'); }); (adsbygoogle = window.adsbygoogle || []).push({});, find the production during first year., (adsbygoogle = window.adsbygoogle || []).push({});, find the production during 8 th year., find the production during first 3 years., in which year, the production is rs 29,200., find the difference of the production during 7th year and 4th year..

Question India is competitive manufacturing location due to the low cost of manpower and strong technical and engineering capabilities contributing to higher quality production runs. The production of TV sets in a factory increases uniformly by a fixed number every year. It produced 16000 sets in 6th year and 22600 in 9th year. Based on the above information, answer the following questions:Question 1 Find the production during first year. Rs 5000 Question 2 Find the production during 8th year. Production during 8th year is (a + 7d) = 5000 + 2(2200) = 20400 Question 3 Find the production during first 3 years.Question 4 In which year, the production is Rs 29,200.N = 12 Question 5 Find the difference of the production during 7th year and 4th year.Difference = 18200 – 11600 = 6600

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CBSE Class 10 Maths Case Study Questions for Maths Chapter 5 - Arithmetic Progression (Published by CBSE)

Case study questions on cbse class 10 maths chapter 5 - arithmetic progression are provided here. these questions are published by cbse to help students prepare for their maths exam..

CBSE Class 10 Case Study Questions for Maths Chapter 5 - Arithmetic Progression are available here with answers. All the questions have been published by the CBSE board. Students must practice all these questions to prepare themselves for attempting the case study based questions with absolute correctness and obtain a high score in their Maths Exam 2021-22.

Case Study Questions for Class 10 Maths Chapter 5 - Arithmetic Progression

CASE STUDY 1:

India is competitive manufacturing location due to the low cost of manpower and strong technical and engineering capabilities contributing to higher quality production runs. The production of TV sets in a factory increases uniformly by a fixed number every year. It produced 16000 sets in 6th year and 22600 in 9th year.

Based on the above information, answer the following questions:

1. Find the production during first year.

2. Find the production during 8th year.

3. Find the production during first 3 years.

4. In which year, the production is Rs 29,200.

5. Find the difference of the production during 7th year and 4th year.

2. Production during 8th year is (a+7d) = 5000 + 2(2200) = 20400

3. Production during first 3 year = 5000 + 7200 + 9400 = 21600

4. N = 12 5.

Difference = 18200 - 11600 = 6600

CASE STUDY 2:

Your friend Veer wants to participate in a 200m race. He can currently run that distance in 51 seconds and with each day of practice it takes him 2 seconds less. He wants to do in 31 seconds.

1. Which of the following terms are in AP for the given situation

a) 51,53,55….

b) 51, 49, 47….

c) -51, -53, -55….

d) 51, 55, 59…

Answer: b) 51, 49, 47….

2. What is the minimum number of days he needs to practice till his goal is achieved

Answer: c) 11

3. Which of the following term is not in the AP of the above given situation

Answer: b) 30

4. If nth term of an AP is given by an = 2n + 3 then common difference of an AP is

Answer: a) 2

5. The value of x, for which 2x, x+ 10, 3x + 2 are three consecutive terms of an AP

Answer: a) 6

CASE STUDY 3:

Your elder brother wants to buy a car and plans to take loan from a bank for his car. He repays his total loan of Rs 1,18,000 by paying every month starting with the first instalment of Rs 1000. If he increases the instalment by Rs 100 every month , answer the following:

1. The amount paid by him in 30th installment is

Answer: a) 3900

2. The amount paid by him in the 30 installments is

Answer: b) 73500

3. What amount does he still have to pay offer 30th installment?

Answer: c) 44500

4. If total installments are 40 then amount paid in the last installment?

Answer: a) 4900

5. The ratio of the 1st installment to the last installment is

Answer: b) 10:49

Also Check:

CBSE Case Study Questions for Class 10 Maths - All Chapters

Tips to Solve Case Study Based Questions Accurately

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India’s Opportunity to Become a Global Manufacturing Hub

• A new study by the World Economic Forum presents five ways India can realize its manufacturing potential and build a thriving manufacturing sector • According to the report, India can play a significant role in reshaping supply chains and could contribute more than $500 billion in annual economic impact to the global economy by 2030 • India’s domestic demand, demographics and government programmes encouraging manufacturing put it in a unique position • Read the full report here

Geneva, Switzerland, 2 August 2021 – Beyond the unprecedented health impact, the COVID‑19 pandemic has been catastrophic for the global economy and businesses and is disrupting manufacturing and Global Value Chains (GVCs), disturbing different stages of the production in different locations around the world. Furthermore, the pandemic has accelerated the already ongoing fundamental shifts in GVCs, driven by the aggregation of three megatrends: emerging technologies; the environmental sustainability imperative; and the reconfiguration of globalization.

In this fast-evolving context, as global companies adapt their manufacturing and supply chain strategies to build resilience, India has a unique opportunity to become a global manufacturing hub. It has three primary assets to capitalize on this unique opportunity: the potential for significant domestic demand, the Indian Government’s drive to encourage manufacturing, and with a distinct demographic edge, including considerable proportion of young workforce.

These factors will position India well for a larger role in GVCs. A thriving manufacturing sector will also generate additional benefits and help India deliver on the imperatives to create economic opportunities for nearly 100 million people likely to enter its workforce in the coming decade, to distribute wealth more equitably and to contain its burgeoning trade deficit.

The World Economic Forum’s new White Paper entitled Shifting Global Value Chains: The India Opportunity , produced in collaboration with Kearney, found India’s role in reshaping GVCs and its potential to contribute more than $500 billion in annual economic impact to the global economy by 2030. The White Paper presents five possible paths forward for India to realize its manufacturing potential.

The insights presented in the White Paper reflect the perspectives of leaders from multiple industries in the region. The five possible solutions include:

· Coordinated action between the government and the private sector to help create globally competitive manufacturing companies

· Shifting focus from cost advantage to building capabilities through workforce skilling, innovation, quality, and sustainability

· Accelerating integration in global value chains by reducing trade barriers and enabling competitive global market access for Indian manufacturers

· Focusing on reducing the cost of compliance and establishing manufacturing capacities faster

· Focusing infrastructure development on cost savings, speed, and flexibility

“For India to become a global manufacturing hub, business and government leaders need to work together to understand ongoing disruptions and opportunities, and develop new strategies and approaches aimed at generating greater economic and social value”, said Francisco Betti , Head of Shaping the Future of Advanced Manufacturing and Production, World Economic Forum.

“A thriving manufacturing sector could potentially be the most critical building block for India’s economic growth and prosperity in the coming decade. The ongoing post-COVID rebalancing of Global Value Chains offers India’s government and business leaders a unique opportunity to transform and accelerate the trajectory of manufacturing sector”, said Viswanathan Rajendran , Partner, Kearney.

This White Paper aims to serve as an initial framework for deliberation and action in the manufacturing ecosystem. The World Economic Forum, in collaboration with Kearney, will continue to develop this agenda by working closely with the manufacturing community in India to generate new insights, help inform discussions and strategy decisions, facilitate new partnerships, and provide a platform for exchanges with the global community.

Notes to editors

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'Make In India' Manufacturing Push Hinges on Logistics Investments

A strong logistics framework will be key to transforming India from a services-dominated economy into a manufacturing-dominant one.

Published: August 3, 2023

India has an immense opportunity to increase its share of global manufacturing exports, and the government is seeking to raise manufacturing to 25% of GDP from 17.7% by 2025.

Developing a strong logistics framework will be key to transforming India from a services-dominated economy to a manufacturing-dominant one, particularly enhancements in intermodal connectivity and heavy investments in ports and shipping capacity.

Accelerated investments should aid India's ambition; a boom in Indian mobile phone production provides a template for future policies in other sectors.

India stands on the cusp of a massive opportunity to increase its share of global manufacturing exports. Corporate manufacturing giants are looking for alternative production and sourcing destinations to accelerate supply chain diversification. India should benefit from these positive tailwinds, aided by significant milestones already achieved in its domestic and export logistics framework as well as by projects now underway. The telecom sector provides a case study for the delivery of the Modi administration’s “Make in India, Make for the World” policies. Global smartphone manufacturers are setting up shop in India after years of patient government intervention via targeted trade policies focused on phones and components.

Successive Indian governments have emphasized policies promoting domestic manufacturing to reduce India’s import dependence and to increase its share of global exports. The current administration’s focus on “Make in India, Make for the World” encourages investments in manufacturing, especially through Production-Linked Incentive (PLI) schemes. First introduced in 2020 for electronics makers, PLIs provide incentives to domestic and foreign companies that invest in Indian manufacturing and meet predetermined output targets.

India’s policy landscape is often disparate , spanning multiple states with independent reform agendas. Approaching reform at a national level through platforms like PLIs can allow the central government to circumvent state-level differences. Effective uptake of these schemes will be crucial as India seeks to increase manufacturing to 25% of GDP by the year ending March 2025 . It was 17.7% last fiscal year, according to S&P Global Market Intelligence.

Policies in complementary sectors — especially logistics — will be key to meeting the government’s goal of transforming India from a services-dominated economy into a manufacturing-dominant one. Sophisticated logistics could give India a competitive advantage over other countries vying for inbound investment. 

Accelerated Investments Should Aid India’s Global Manufacturing Ambitions

India’s ability to compete internationally against other manufacturing exporters will be enhanced by its two-pronged approach to logistics. This is focused on improving intermodal connectivity and on heavy investment in ports and shipping capacity.

Capital-intensive infrastructure projects would also be supported by the government’s strong digitalization efforts. Existing frameworks such as the National Logistics Policy (NLP) could help to build a technology-enabled, integrated, cost-effective and dependable logistics ecosystem.

Digital and infrastructure initiatives have already helped India to rise six spots since 2018 in the World Bank’s Logistics Performance Index (LPI), to rank 38th out of 139 countries in 2023. The country has significantly improved its score in four of the six LPI indicators (infrastructure, international shipments, logistics quality and competence, and timeliness), which bodes well for the future.

A key variable affecting India’s manufacturing potential is cost competitiveness in logistics. Costs are about 14% to 18% of GDP, according to the country’s full-year 2022–23 Economic Survey. The government aims to lower these costs to below 10% to be more in line with major Asian exporters.

Improving road and rail connectivity will help to cut logistics costs. There is already a noticeable acceleration in national highway building, with the government expecting construction to reach 33 km/day in fiscal year 2024, almost double the 17 km/day achieved in fiscal year 2016. The share of containers being shipped by rail is also rising: It is forecast to hit 23.5% in fiscal year 2024 and 33% in fiscal year 2030, according to the government.

Ports Need Investment to Boost India’s Cargo Capacity and Throughput

Increasing India’s manufacturing exports in a cost-competitive and efficient manner will require improvements in logistics. The country has geographical advantages including a long coastline of more than 7,500 km and proximity to shipping traffic transiting the Indian Ocean.

Looking Forward

India lags Japan, South Korea and mainland China in export infrastructure and efficiency, particularly in terms of port capacity. To narrow this infrastructure gap and to become the global manufacturing destination of choice, India will need massive upgrades covering areas such as rail, ports and freight corridors.

India needs to reduce its reliance on transshipments via hubs such as Singapore and Hong Kong to help manufacturers avoid potentially lengthy transit times. This means adding efficient high-capacity ports that can handle the largest container ships or incentivizing operators to introduce direct services to major markets. It will also entail strengthening links with global container carriers and freight forwarders.

India has an opportunity to increase its share of global container shipments and bulk commodities, even if North Asia will likely continue to be the driver of global container volumes, according to S&P Global’s Global Trade Analytics suite. Accelerating port infrastructure development will be key to achieving this goal.

Port capacity and container throughput have experienced robust growth in India over the last five years. Looking forward, capacity will have a compound annual growth rate of 2.7% in 2023–30, with container traffic achieving 6.5%, based on estimates from CRISIL, an S&P Global company. This is growth from a low base, and a key question is how India facilitates significantly more port investments and higher growth rates in support of its bid to become an export powerhouse.

Successfully emerging as a global manufacturing hub is central to achieving India’s domestic growth target and geopolitical ambitions. The path to achieving this goes via the government’s ability to design and build a world-class logistics system, encompassing domestic road and rail networks, as well as international shipping services.

Smartphones Show Potential for Electronics Manufacturing

Getting the logistics framework right should facilitate growth in sectors earmarked for exports, especially high-strategic areas like electronics that require tightly integrated supply chains. Electronics makers also generally rely on airfreight, which means the sector is less affected by India’s existing seaport constraints.

India’s policy interventions in the smartphone sector illustrate its ambitions for manufacturing as a conduit to service the domestic market as well as its geopolitical aims. Smartphones are among the most sophisticated manufactured products, and their ubiquity makes them a logical target for any country looking to extend its economic development. The arrival of Apple contractors as major players in Indian mobile phone production shines a light on the nation’s success so far and on its opportunities for future growth.

Evolution in India’s Domestic Market

Reshoring of telecom manufacturing is a competitive field, with India facing significant competition as multinationals look to expand their operations. However, India’s large domestic market gives it an advantage, especially over Southeast Asian countries.

A revolution in India’s telecom services has helped to make the country one of the world’s most digitalized economies. India’s next target is to ensure the availability of low-cost mobile phones.

Sales of telecom products in India are projected to reach $18.3 billion — or 1.3% of the global total — in 2027, according to forecasts by S&P Global Market Intelligence. The market is expected to grow 7.3% annually through 2027, outpacing the global average of 6.2%. India’s large mobile phone sales make it worthwhile setting up local supply chains serving both domestic and export markets. Major manufacturers that already operate in India include Samsung Electronics and Xiaomi, as well as contract producers for Apple including Wistron and Pegatron.

The “Make in India” strategy includes a variety of import restrictions on phones and parts, which offers support to local manufacturers. Domestically produced, low-cost phones may also help bring informal, unregistered businesses into the mainstream economy.

India’s Viability as Export Hub

India’s export industry for telecom equipment, including smartphones, is rapidly expanding. Exports reached $11.8 billion in the 12 months to March 31, 2023, data from S&P Global Market Intelligence and Panjiva shows. Samsung Electronics led with 35% of exports, followed by contract manufacturers Wistron and Foxconn (Hon Hai Precision Industry) with 17% each.

To ensure sustainable growth in telecom, public and private sector coordination will be needed to transition beyond only assembling smartphones. This work can always be relocated to lower-cost locations, whereas fully integrated operations are stickier. Such operations would also make India pivotal to the global telecom equipment supply chain.

Replicating the full supply chain back to semiconductors is not necessary. For instance, mainland China and Vietnam both import processors and other chips. India’s imports of semiconductors and other parts for telecom and computing devices have tracked steadily upward. Panjiva data shows imports of telecom equipment and computer chips reached $27.4 billion in the 12 months to March 31, 2023, after 12% of compound annual growth since 2017.

India has significant opportunities for manufacturing expansion across a range of sectors. Success so far in smartphone supply chains provides a template for future development potential — in terms of both scale and the complex hurdles to be overcome.

Right place, right time: Supply chain outlook for third quarter 2023 Before the battery and magnet: IRA and mineral supply chains

Next Article: Future Farming: Agriculture’s Role in a More Sustainable India

This article was authored by a cross-section of representatives from S&P Global and in certain circumstances external guest authors. The views expressed are those of the authors and do not necessarily reflect the views or positions of any entities they represent and are not necessarily reflected in the products and services those entities offer. This research is a publication of S&P Global and does not comment on current or future credit ratings or credit rating methodologies.

Fulfilling the promise of India’s manufacturing sector

India’s manufacturers have a golden chance to emerge from the shadow of the country’s services sector and seize more of the global market. McKinsey analysis finds 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, while creating up to 90 million domestic jobs.

Four imperatives for India’s government

India’s central and state governments must eliminate four barriers that slow down the efforts of the country’s manufacturers to improve their capital and labor productivity.

1. Product market and ownership barriers. More than half of India’s employees in the organized sector (regulated by labor laws for hiring and firing) still work in government-owned institutions—for example, in the base-metals, petroleum, and power generation industries. Product market barriers and government ownership tend to lower productivity and distort markets significantly.

Yet receding levels of government ownership have dramatically improved the productivity of labor and capital in other parts of the economy. India’s automotive sector, for example, was among the first to be liberalized, in the early 1990s, and the entry of multinational and domestic players sparked a competitive transformation. Subsequently, between 1995 and 2005 the automotive sector’s GDP per manufacturing employee grew by a factor of 15. Today, India produces nearly three million small cars a year, of which about one-quarter are exported. To be sure, India’s government might well deem some sectors (aerospace and defense, for example) as strategic and limit the extent of foreign participation. Yet for a majority of sectors, greater private and multinational participation in India can help unlock productivity structurally.

2. Land market barriers. Distortions in the land market (including high stamp duties and cumbersome regulations) are a huge barrier to productivity improvements in India. In the steel industry alone, we estimate that more than $60 billion of committed capital currently awaits environmental or land clearances. Much of this planned investment has already been delayed by three to five years.

Challenges to aggregating land in India also make it tough for suppliers and manufacturers to raise their overall productivity by locating facilities closely together and thus reaping network effects enabled by streamlined supply chains, the sharing of infrastructure, and mutual learning opportunities.

3. Labor barriers. Stringent labor laws make it difficult for Indian companies to restructure and thus to increase their productivity and expand output. Firing underperforming workers is difficult in India, and this ongoing problem translates into high levels of unproductive labor at many companies there. India’s government should consider liberalizing its labor laws by encouraging reskilling programs that could help workers become more productive and prepare them for new jobs. Encouragingly, India’s National Skill Development Corporation (NSDC) is experimenting with ways to use public–private partnerships to strengthen vocational training. Coupled with sensible labor laws, such moves could quickly begin to make a difference.

4. Infrastructure. Urgent attention is needed to create more railways, roads, ports, and power-generating capacity across India. Poor infrastructure saps industrial productivity and leaves the country at a huge disadvantage compared with others. Bad road conditions, for example, limit trucks carrying cargo in India to an average distance of only about 250–300 kilometers a day, compared with the developed world’s average of 500 kilometers. Similarly, turnaround times for ships loading and unloading in India’s ports can be up to four days, compared with only 10 to 12 hours in Hong Kong.

Recently, India’s Ministry of Commerce & Industries called for the development of National Investment and Manufacturing Zones (NIMZs). 1 1. For more, see the government’s recently announced National Manufacturing Policy (NMP), available at www.india.gov.in. The encouragement of such industrial clusters is a positive development, since they are a proven way of catalyzing the efforts of the public and private sectors to address infrastructure challenges. In the Indian state of Jharkhand, for instance, a cluster in the city of Jamshedpur attracted dozens of industrial companies that teamed up to improve the local infrastructure. The benefits extend beyond better roads, power, and water supply: companies in Jamshedpur actively collaborate to improve workers’ skills and have even, in some cases, developed shared pools of workers. The learning benefits for companies are substantial, too, as industrial clusters help spark the kinds of supplier ecosystems that help innovation thrive.

Capturing this opportunity will require India’s manufacturers to improve their productivity dramatically—in some cases, by up to five times current levels. 1 1. To improve total factor productivity three to five times, a manufacturer would have to improve its labor productivity by a factor of 2.0 to 3.0 and its capital productivity by a factor of 1.5 to 2.0. The country’s central and state governments can help by dismantling barriers in markets for land, labor, infrastructure, and some products (see sidebar, “Four imperatives for India’s government”). But the lion’s share of the improvement must come from India’s manufacturers themselves.

Recognizing this, a few leading ones are upgrading their competitiveness by bolstering their operations to improve the productivity of labor and capital, while launching targeted programs to train the plant operators, managers, maintenance engineers, and other professionals the country needs to reach its manufacturing potential. A closer look at the experiences of these companies offers lessons for other Indian manufacturers and for global product makers considering opportunities in India.

Made in India?

India’s manufacturers have long performed below their potential. Although the country’s manufacturing exports are growing (particularly in skill-intensive sectors such as auto components, engineered goods, generic pharmaceuticals, and small cars) its manufacturing sector generates just 16 percent of India’s GDP—much less than the 55 percent from services. 2 2. In fact, India exports goods worth 17 percent of GDP but also imports manufactured goods worth nearly 16 percent of GDP, so the net contribution of the manufacturing sector’s exports to overall GDP is negligible. By contrast, China’s manufacturing sector contributes 47 percent of China’s GDP, and its contribution to net exports is large. Services account for 44 percent of China’s GDP. Moreover, a majority of India’s largest manufacturers don’t return their cost of capital (Exhibit 1), a factor that dampens investment in the sector and makes it less attractive than its counterparts in competing economies, such as China and Thailand. Indeed, China’s manufacturers captured nearly 45 percent of the global growth in manufacturing exports from low-cost countries between 2001 and 2010, whereas India accounted for a paltry 5 percent.

More than half of India’s manufacturing companies do not return their cost of capital.

Nonetheless, India’s rapidly expanding economy, which has grown by 7 percent a year over the past decade, gives the country’s manufacturers a huge opportunity to reverse the tide. History shows that as incomes rise, the demand for consumer goods skyrockets. And many of India’s consumption sectors—including food and beverages, textiles and apparel, and electrical equipment and machinery—have reached this inflection point. In fact, our research suggests that these sectors will grow from 12 to 20 percent annually over the next 15 years (Exhibit 2).

Many sectors in India will experience strong domestic market growth driven by increased consumption.

To be sure, global economic growth is poised to create opportunities for low-cost manufacturers everywhere: by 2015 the market for manufactured goods from low-cost countries will more than double, to nearly $8 trillion a year. China will probably capture much of the growth. Still, we estimate that up to $5 trillion a year will be up for grabs as global companies seek to diversify production and sources of supply beyond China, both to address rising factor costs there and to chase domestic demand in other countries.

India has a massive workforce, an emerging supply base, and access to natural resources needed in production—notably, iron ore and aluminum for engineered goods, cotton for textiles, and coal for power generation. The country could become a viable manufacturing alternative to China in industries ranging from apparel to auto components and might even dominate some skill-intensive manufacturing sectors (Exhibit 3).

India could be competitive in a number of industries.

If India’s manufacturing sector realized its full potential, it could generate 25 to 30 percent of GDP by 2025, thus propelling the country into the manufacturing big leagues, along with China, Germany, Japan, and the United States. Along the way, we estimate that India could create 60 million to 90 million new manufacturing jobs and become an attractive investment destination for its own entrepreneurs and multinational companies.

India’s product makers must embrace global best practices in operations—while tailoring them to India’s unique environment—to improve the efficiency and effectiveness of the country’s manufacturing investments dramatically. A look at how some Indian companies are making inroads in these areas suggests a path that others can follow.

Bolster operations

India’s legacy of industrial protectionism has left many of the country’s manufacturers uncompetitive. To seize the opportunities now available to them, they must dramatically increase the productivity of their labor and capital. The rewards could be significant: a McKinsey benchmarking study of 75 Indian manufacturers found that for an average company, the potential productivity improvements represented about seven percentage points in additional returns on sales.

Improve labor productivity

Indian manufacturers lag behind their global peers in production planning, supply chain management, quality, and maintenance—areas that contribute to their lower productivity (Exhibit 4). Consequently, workers in India’s manufacturing sector are almost four and five times less productive, on average, than their counterparts in Thailand and China, respectively.

Indian manufacturers lag behind their global peers in key operational areas.

Nonetheless, some Indian companies are making strides. Tata Steel, for instance, improved its output per worker by a factor of eight between 1998 and 2011, largely by adapting its operational and management practices to India’s unique conditions. The company dramatically improved the output of its blast furnaces, for example, by learning to adjust them continually to account for the large variations in the ash content of Indian coal from shipment to shipment. In this way, the steelmaker can burn coal with a high ash content more efficiently than would otherwise be possible.

The company has also made significant organizational changes to support the new ways of working. To make employees more accountable, for example, Tata Steel reduced the number of managerial layers to 5, from 13. It also began investing heavily in building analytical and interpersonal skills among frontline managers and staff to ensure access to scarce competencies. Today, the company’s Shavak Nanavati Technical Institute trains more than 2,000 employees a year in both “hard” skills as well as “soft” ones, such as conflict resolution. Together, these moves strengthened the company’s focus on continuous improvement—Tata Steel won the coveted Deming Prize in 2008 for advances in process excellence and quality improvements—and helped it become one of the world’s lowest-cost steel producers.

Improve capital productivity

India’s manufacturers must also improve the productivity of their capital, 3 3. In this article, we define capital productivity as operating profit divided by total assets. in some cases by 50 percent or more. While such improvements are challenging, they are possible if companies set bold targets and adopt an “owner–entrepreneur” mind-set when tackling large capital projects or making other big investments.

For example, a global mining and metals company that was setting up aluminum smelter operations in India set a capital cost target 50 percent lower than the industry’s global average. The company then empowered its project teams to reach the goal—for example, by giving them greater freedom to make decisions about capital specifications and which low-cost equipment suppliers to use. (A technical and commercial audit team of senior managers ensured that the new approach didn’t compromise the quality of capital equipment or backfire in the form of graft.)

Moreover, the company did not give the contract out on an EPC 4 4. Engineer, procure, construct: a common contracting arrangement, under which the contractor is responsible for all aspects of engineering, procurement, and construction, including the management of subcontractors. basis. Instead, it brought together a mix of Chinese and European companies to finalize the design and to supply the equipment needed, and the integration and commissioning work was done in-house, thus saving much of the margin that would otherwise have been given away. Together, these moves helped the company to launch its Indian smelter operations at a capital cost 50 percent below industry averages (and 20 percent less than other players in the same market spent).

Many Indian companies are also assessing the technical design of their capital equipment to make trade-offs between capital expenditures and life cycle expectations for reliability—essentially “Indianizing” the specifications. Tata Power, for example, has lowered its capital expenditures in a drive to identify relatively inexpensive designs and specifications for big projects. During the planning stages of a new 4,000-megawatt facility, for instance, the company brought together customers, suppliers, and Tata engineers to make a number of Indianized design decisions. These included using cheaper welded tubes instead of seamless ones in feedwater heaters and redesigning the layout of the turbine-generator building to make it more compact. Together, such trade-offs saved the company more than $100 million in capital outlays while preserving the plant’s core capabilities and meeting standards for safety and reliability.

Meanwhile, some Indian companies are working to raise the productivity of their existing assets—for example, by focusing on the reliability of equipment. In our experience, throughput improvements from 40 to 100 percent 5 5. In our assessment, the potential improvement ranges from 20 to 40 percent for continuous-process industries (such as steel), 30 to 60 percent for discrete manufacturing (automotive, mining), and 50 to 100 percent for batch-process-based industries (such as pharmaceuticals). are possible when Indian companies apply traditional lean-management techniques to keep machines running longer and to reduce time wasted during retooling and production line changeovers. Tata Steel, for instance, focused on standardized tasks throughout its mills and trained workers to uncover the root causes of equipment problems. One of the company’s melting shops we studied raised its production dramatically over two years by standardizing jobs and empowering its operations and maintenance employees to identify potential problems of key machines that had previously been prone to creating production bottlenecks.

Targeted skill development

India’s manufacturers could learn a lot from the IT sector’s experience in promoting the large-scale development of skills. India’s IT services and business-process-outsourcing sectors together hire nearly a million new recruits a year and bring them up to speed in just months. A key factor in this success was the early recognition among Indian IT companies, back in the 1990s, that the number of engineering graduates in computer sciences wouldn’t meet the needs of the country’s burgeoning IT sector. In response, Infosys, Wipro, and other companies began hiring graduates from all engineering disciplines and using in-house curricula and faculties to build skills among new hires. That approach ultimately led to the formation of a successful network of independent, privately owned computer-training institutes, such as Aptech and NIIT.

India’s manufacturers should follow a similar path by establishing in-house training centers to promote vital manufacturing roles, including those of fitters, machinists, maintenance engineers, and welders. Some Indian companies are already taking matters into their own hands. For example, to impart vocational skills, India’s largest automaker, Maruti Suzuki, has adopted six technical institutes across the country, some in regions with little manufacturing presence. By using the company’s own managers as faculty for some classes, Maruti Suzuki inculcates trainees with a strong feel for its culture as well. The automaker is now expanding its training programs to include employees of key suppliers.

Although training programs make good business sense, they are also increasingly necessary to get local populations to accept the establishment of a manufacturing footprint in India. Tata Motors’ partnership with the Gujarat state government to improve the skills of local workers, for example, helped the company to ameliorate concerns about the displacement of residents by the construction of a Tata Nano car factory, while giving the company access to new workers. Today, nearly 1,000 people who live within a 10-kilometer radius of this Sanand factory make Nanos. Similarly, Tata Steel has agreed with the Orissa state government to train and improve the skills of workers living near a planned steel plant in Kalinganagar. The company has pledged to give local villagers jobs in the project’s execution and operations.

Frontline workers aren’t the only ones whose skills need upgrading; India’s manufacturers must also improve those of managers. Consider the experience of the cement maker Holcim, where executives set—and achieved—such goals as significantly improving the reliability and energy efficiency of the production process, as well as other important operating metrics at the company’s Indian subsidiaries.

At the heart of this initiative is an academy the company set up in its Indian plant to help future leaders bolster their skills through a “field and forum” approach that intersperses class work with hands-on fieldwork in the form of operational-improvement projects. Similarly, Holcim trains its managers to focus performance dialogues with frontline employees on the importance of identifying the root causes of problems and of finding potential solutions through cross-functional teams. The company uses operational “war rooms” in its Indian plants to serve as a clearinghouse for the best ideas and to uncover the best contributions. In parallel, Holcim created an ambitious leadership program to support the personal development of up-and-coming manufacturing leaders.

The combination of rocketing domestic demand and the multinationals’ desire to diversify their manufacturing footprint offers Indian product makers a once-in-a-generation opportunity to emerge from the shadow of the country’s services sector. By improving their productivity and bolstering operations, they could become an engine of economic prosperity for the whole country.

Rajat Dhawan is a director in McKinsey’s Delhi office, of which Gautam Swaroop is an alumnus; Adil Zainulbhai is a director in the Mumbai office.

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India’s Manufacturing Cost Competitiveness: Holding Steady

August 19, 2014  By  Arun Bruce

If any Indian industrial sector were well positioned to benefit from the nation’s growing low-cost advantage, cotton fabrics and garments would seem a likely candidate. India is the world’s second-leading exporter of raw cotton and has an immense, growing workforce. What’s more, the cost of Indian labor has remained virtually flat over the past decade when adjusted for productivity gains. That should give India a big advantage in apparel, a sector for which labor accounts for nearly 30 percent of the total cost. By contrast, labor costs in China’s coastal provinces have nearly tripled.

Cost Competitiveness: A Country Guide

• An Interactive View
• Australia: Losing Ground
• United Kingdom: A Rising Regional Star
• India: Holding Steady
• Mexico: A Rising Global Star

Yet India accounts for only 3 percent of the global apparel trade—and there has been no big rush to build cotton textile or apparel plants in India. Instead, much of the country’s raw cotton and yarn is still shipped to China, where it is woven into fabrics and converted into apparel at factories that are primarily located in China, Bangladesh, Cambodia, and Vietnam.

The reasons illustrate the challenges that economies such as India must still overcome before they can fully translate their low-cost advantages into a surge of manufacturing investment and exports across a broad range of industries. In terms of direct manufacturing costs, the new BCG Global Manufacturing Cost-Competitiveness Index shows that India has held steady from 2004 to 2014 relative to the U.S. Within Asia, India has the potential to become a rising regional star. Strong productivity growth and a depreciating currency have offset the increase in average manufacturing wages. Electricity and natural-gas costs have risen less than in most other major Asian export economies since 2004.

But factors other than direct costs undermine India’s competitiveness by adding risk and hidden costs. Bottlenecks at India’s seaports add days to shipping times. It typically takes six months to a year to clear all the regulatory hurdles needed to build a new factory in India. Labor laws that make it difficult and expensive for companies to manage their workforces during slow times discourage companies from building large-scale, cost-efficient factories. And while the government keeps electricity rates low for end consumers, in reality many manufacturers must pay much more for power than in other Asian economies. Because there is a perennial shortage of power capacity in the country, many factories must operate expensive diesel-powered generators on their own.

There is some cause for optimism. Container terminals and expressways are being built and expanded in India, and the growing use of power exchanges is bringing down electricity prices in some industrial areas. In addition, the country is developing special economic zones that offer speedier regulatory approvals and help in managing human resources. The Indian government has also been working harder to promote India as a global manufacturing base.

But fundamental reforms in labor, energy, and investment regulations are required before India can fully capitalize on its low-cost advantage. If the new government can accomplish such reforms, India is in a powerful position to emerge as Asia’s next star in manufacturing.

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Unleashing India’s Industrial Potential: Building a Globally-Competitive Manufacturing Base

While the world is moving to the information age, industrialisation remains an important driver of employment, prosperity and growth. Industrialisation has historically been one of the biggest drivers of shifts in global geopolitical power starting with the rise of the British Empire after the industrial revolution, followed by the rise of the US in the first half of the twentieth century and the rise of Asia (first Japan and the Asian Tigers and then, much more dramatically, China) in the latter half. Power and prosperity has flowed to the countries and regions which have successfully unleashed industrial transformations. India however missed the Asian industrial revolution, with its recent growth driven primarily by its services sector. Services for a country the size of India has not been sufficient to create growth to drive mass prosperity; India has grown at half of China’s pace since 1980 when both India and China had a per capita GDP of c.US$300. China’s has grown at a CAGR of 10% over the last three decades reaching c.US$7,000 while India’s, growing at half that pace, is currently at c.$1,500 . In spite of similar population sizes and low-cost profiles, China’s industrial sector at US$4 trillion (and still growing), now dwarfs India’s which is estimated at c.US$300 billion. With China reaching middle-income levels and its leadership implementing reforms to re-balance the economy towards the services sector and consumption rather than manufacturing and investment; its competitive advantage has eroded and is likely to continue to do so (See our Sign leader from April 2014 on China’s Changing Competitiveness to 2025). India, with its far more favourable demographics, has a huge untapped labour pool and has therefore retained the potential to create a cost advantage. Just as the US took over dominance in manufacturing from the British Empire at the turn of the twentieth century, India now has an opportunity to truly harness its demographic dividend by creating a large number of manufacturing jobs and displace China as the world’s factory. With a new government led by Mr. Modi with a sweeping parliamentary majority, there is now an opportunity to make the necessary structural changes to unleash an industrial revolution (See our Sign leader from Mar-2014 on 12% Growth Agenda: A Blueprint for India’s New Government). Whether or not India capitalises on this opportunity will not only determine the country’s economic course over the next few decades, it will also determines India’s place in the emerging geopolitical landscape as the role of Asia in the world continues to become clearer and the US strategy towards China continues to develop.

Creating an industrial revolution of the scale that would be material in term of geo-economics and geo-politics requires the new Indian government to develop a strategy that turns India’s mass population into a strength. This will of course not be easy and requires India to absorb the policy lessons from modern imperial history, from the other Asian countries and leverage its own strengths in knowledge-based industries to create a manufacturing base that takes people out of poverty and on a scale and in a manner that changes the game in the global manufacturing industry. China, the Asian Tigers, and Japan provide several critical lessons which India needs to absorb:

• Importance of Scale. China’s experience demonstrates that economies of scale play a crucial role in rapidly expanding the industrial sector. In industries such as white goods, chemicals and auto ancillaries, China redefined the idea of “minimum efficient scale” by building a scale that was well in excess of sector norms. For example, in the early 1990s, the Chinese firm Haier set up a 100 acre industrial park – China’s first, and the largest in the world at the time.
• Importance of Industrial Eco-systems. Scaled manufacturing not only creates industrial efficiencies, but also enables a supplier ecosystem to emerge which in turn makes manufacturing more competitive. In the electronics industry, China and Japan have both focused their efforts on creating local supply chains resulting in companies like Apple making Guangzhou their hub for making iPods and iPhones.
• Importance of Scaling the Domestic Supply of Human Capital. Major investments in education, R&D and skills development have been an important driver of industrial growth. All the Asian Tigers achieved universal primary education by 1965 and South Korea achieved c.90% secondary enrolment by 1987 . This foundation enables the transition from basic to more advanced skills which is essential to the development of advanced industries.
• Importance of Mobilising Investment. China and Japan have pioneered the investment and export led industrial growth models by effectively mobilising domestic savings towards fixed asset investment. China went a stage further by attracting foreign domestic investment by making it easy for foreign corporations to set up its global manufacturing facilities, attracting US$1.5 trillion of cumulative FDI between 1990 and 2013 .
• Importance of Attracting Foreign Intellectual Property. In the 1990s, China not only had the vision to allow foreign corporations to employ its people by establishing huge manufacturing facilities, it also had the foresight to see that this would bring with it intellectual property and that this would transfer into the hands of domestic companies. Indeed, in some cases, the need to work with a joint venture partner made this a necessary price of entry. For example, China’s current global leadership in high-speed trains (and its decision to launch a US$32 billion Shanghai-Beijing rail corridor) can be attributed to intellectual property state-owned firms acquired in the early 1990s through product and technology licensing with leading international manufacturers.
• Importance of Picking the Right Industries. All the Asian manufacturing miracles have consciously selected and invested in certain core industrial segments in order to quickly build scale and competitive advantage. Japan, Taiwan and South Korea’s focus on high-technology manufacturing and China’s policy focus on specific export product markets has allowed strong competitive advantages in these sectors. South Korea’s current strength in nano- and bio-technologies can be attributed to government investments in 23 projects in bio-science, nanotechnology, space technology and other related areas between 1999 and 2009.

“The Right Man for the Job” with a Historic Opportunity

Mr. Modi is being hailed as the “right man for the job” in many quarters given the state of India’s economy. Mr. Modi has shown the key ingredients for this kind of industrial transformation in his home state of Gujarat which he led for the last 12 years before his landmark election victory in India’s recently-concluded general elections. With just 5% of India’s population, Gujarat contributes 17% of the country’s industrial output and accounts for 25% of its exports. Industry now has a c.30% share in Gujarat’s economy vs. c.15% at the national level. This remarkable industrial growth has allowed Gujarat to become one of the most prosperous states in India with a per capita income almost 50% higher than the national average. While the entrepreneurial heritage of the Gujarati community (which includes merchants and traders who have migrated across India and much of the world) has contributed significantly to Gujarat’s success, Mr. Modi’s government has catalysed this through a state-level policy framework focused around (i) streamlining administration, (ii) creating rapid infrastructure development (roads, ports, power), and (iii) mobilising significant domestic and foreign capital. These factors together have helped Gujarat achieve an average annual industrial growth rate of 10% over the last decade vs. 7% for India as a whole . Mr. Modi’s government will now need to find a The Shanghai Free Trade Zone is widely viewed as a testing ground for long-awaited economic reforms, including investment, international trade, and finance.” way to replicate this success at a national level for the balance 95% of India’s population. Even with the stable parliamentary majority which his party secured in the election, this will be far more challenging. If the answer has to come by dictate or by changing old laws, it is unlikely to be successful quickly enough. No doubt some laws will need to be changed and that list is being drawn up and the priorities are being set. However, for speed and effectiveness, it makes far more sense to work with states that are cooperative, to create “islands” (or special zones) where new rules can be created and to create symbolic events that create the demand for change.

So, in parallel to the slower process of implementing legal changes at the national level, a good starting point for the government would be to focus on implementing its strategy in the key states of Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan which account for over one-third of India’s total population and where the ‘demographic dividend’ will be largely concentrated over the next decade. Most of the workforce in these states is currently dependent on subsistence agriculture and Bihar and Uttar Pradesh rank amongst India’s poorest with per capita incomes which are 60% and 45% below the national average, respectively. These states voted overwhelmingly for change in the recent elections, with Mr. Modi’s party (the BJP) and its allies securing c.85% of the cumulative parliamentary seats in these states. The BJP already controls the state legislatures in two of these states (Madhya Pradesh and Rajasthan), and based on the recent performance, may well come to power in upcoming state assembly elections in Bihar and Uttar Pradesh. If Mr. Modi can effectively work with these states to ensure that new policies are adopted at the state level, the government could gain the wins it needs to galvanise the national reform process. Indeed, if only the four states with 35% of the population benefited, the strategy would have been successful. This success would of course be heavily advertised and would kick-start a healthy competition amongst states to deliver to their own populations.

The Prize: India Creates the 21st Century’s Industrial Model

For highly populous nations, even in the information age of the 21st century, possessing a highly productive industrial base is the cornerstone of prosperity. World attention has been on China’s manufacturing base and analysts have been marking the day when China overtakes Germany, then Japan and then the US. China has proven that such an asset not only creates prosperity, it creates geopolitical clout. In countering this power, the Bush Administration began to woe India by legitimising its nuclear arms programme. This became even more important once the Obama Administration declared its “Asia Pivot”. However, India has struggled to live up to the promise of an economically and politically powerful democratic success. It is highly clear that India is the only country of size and scale to compare with China in the plans of nations and global corporations and this has become important to the US, Japan and the many Asia-Pacific nations daunted by China’s growing power. Arguably, this is not the reason for India to create a mass industrial base. The better reason is to pull its people out of poverty and to create opportunities that enable its citizens to unlock their potential. This personal economic logic has been behind the outright victory the electorate handed to the Modi government.

The examination of where India is today, what it means to have an industrial base in the 21st century and what it takes to create is the subject of the remainder of this paper.

The Baseline: India Lags, India has Potential

India has lagged expectations: the glass has been half empty for a long time. India has great potential: the glass has been half full for a long time. How full or empty the glass is, is not easy to calculate. In the absence of comprehensive and comparable data on other parameters, any analysis of manufacturing competitiveness tends to focus on relative wage and labour cost differentials. However, simply looking at India’s low absolute wage levels is a poor way to measure the country’s manufacturing competitiveness because it fails to factor in the significantly lower levels of labour productivity and higher other costs of doing business (logistics, freight and other costs). A simple comparison with China (see table below) demonstrates that despite higher absolute labour costs, China’s effective manufacturing productivity (industrial output per unit of wages) is still 30% higher than India’s. Similarly, looking at total logistics spending also does not paint an accurate picture. In spite of China’s logistics spending being more than 6x India’s levels, relative to the country’s industrial output, it is almost twice as efficient as India in managing its logistics costs. Other metrics such as the time and cost of exports and imports are also presumably lower in China and other Asian low-cost manufacturing destinations (such as Thailand, Vietnam, Sri Lanka, Bangladesh) which consistently rank much higher than India in the metrics analysed in the annual ease-of-doing-business rankings .

The Powerful Impact of Manufacturing on India: Creating a Multi-Decade 10% GDP Growth Machine

If India is to deliver rapid industrial growth which is sustained over the next few decades, clearly China provides the best benchmark given its scale and success in fostering its own industrial revolution. In spite of India’s seemingly weak baseline position against China’s manufacturing sector, it is nevertheless well-poised to improve its competitiveness vis-à-vis China and other Asian manufacturing destinations due to a combination of factors. After three and a half decades of rapid industrial growth, China’s economy appears to have reached close to full employment and recent years have seen sharp increases in average wages in excess of output growth. Furthermore, its exchange rate has also appreciated considerably (28% over last two decades vs. 93% depreciation in the rupee over the same period) and freight costs are unlikely to see the kind of structural decline which spurred China’s export miracle. As a result, China’s manufacturing competitiveness has steadily declined since the early 1990s and will likely continue to erode over the next few decades (See our analysis in the April 2014 Sign of the Times where we examined potential scenarios for China’s competitiveness over the next decade).

India’s manufacturing competitiveness relative to China and other countries, on the other hand, has gradually improved since economic liberalisation due to (i) rising productivity growth across sectors, (ii) low labour costs due to a large labour pool which is still very far from full employment, and (iii) a declining currency. As a result, India’s relative competitiveness is likely to continue to improve vis-à-vis China and other Asian countries which have already developed their industrial bases and will likely surpass China at some point in the next few decades. The key question for India however, is not whether it will become a more competitive manufacturing destination than China, but rather how long it will take to reach that point. Given some of the key factors are already aligned in India’s favour, the speed at which it can close the competitiveness gap will depend entirely on the decisions of its government and policymakers and whether it can successfully (and quickly) implement reforms which will drive manufacturing productivity, manage wage inflation and reduce other manufacturing costs. Over time, global factors (such as exchange rates and other countries’ policies) and intrinsic factors (such as wage differentials) will become less favourable to India, which implies that it has a limited window of opportunity years to accelerate reforms which can harness its advantages to create an industrial revolution and become a global manufacturing superpower.

In order to understand the potential impact of accelerating industrial reforms, we have modelled two scenarios for India’s manufacturing sector with the following key assumptions:

• Baseline Scenario with Gradual Reforms. Under this scenario, Mr. Modi’s government is assumed to continue down the path of gradual reforms which will help India achieve the current consensus GDP growth rate of 6-7% for the next decade . The scenario also assumes that wage growth will exceed productivity growth due to inflexible labour markets because of an inability to enact significant labour law reforms, while other manufacturing costs will reduce only gradually due to slow infrastructure development. As a result, India’s relative competitiveness would stay largely flat vs. current levels and it would take only moderate (c.2%) share of global manufacturing.
• Accelerated Reforms Scenario. Under this scenario, Mr. Modi’s government would launch significant industrial reforms to make Indian manufacturing more competitive including labour law reforms (which would results in a slower pass-through of productivity to wages), rapid infrastructure development (which would lower other manufacturing costs) as well addressing other bottlenecks. As a result of these changes, India’s competitiveness would improve significantly and exceed China’s competitiveness by 2025 and it would take significant (c.7%) additional share of global manufacturing.

The summary of the key results of the scenario analysis are presented below:

Therefore, by accelerating industrial reforms and triggering a manufacturing revolution, India could increase its overall GDP growth rate to up to 10% on the strength of industrial reforms in the manufacturing sector alone (factoring in the likely incremental impact on services and agriculture that such an aggressive reform agenda would likely have, overall growth could of course increase even higher) . More tangibly, industrial reforms on this scale could provide over 200 million new manufacturing jobs by 2025 (compared to a baseline estimate of c.80 million) with average wages of $4,200. These jobs would benefit India’s most impoverished people who are currently dependent on subsistence agriculture indicating that this is the most impactful way in which India can reduce or even eradicate extreme poverty.

Strategy and Vision: What Would India’s 21st Century Industrial Revolution Look Like?

For Mr. Modi, implementing such a far-reaching reform agenda will be about more than just legislative action. It will be about forming a vision for India’s industrial sector and executing it through both the policy framework and other actions (such as investment promotion). The industrial experiences of Great Britain in imperial times, the US, Japan, the Asian Tigers and China have all been different and each has had a unique model which leveraged the best of what each country could offer and also factored in the economic, social, cultural and political contexts of the time. For the scale of transformation that is required, India also needs a uniquely ‘Indian Model’ of industrial development which leverages off its core strengths. A comprehensive vision for industrial development would sit above the following strategies (which are complementary rather than mutually exclusive):

• Making India Wide Open to the World. Indians alone cannot build the industry, IP and infrastructure required to take hundreds of millions out of poverty and make this government a resounding and historic success. That requires India to co-opt the world. The appropriate strategy would be for India to ‘open’ the potential of its people, its resources and its entrepreneurs to the world and leverage the rest of the world for its own economic transformation (See out Sign leader from Feb-2012 India Wide Open: Transforming India Now for 2040 ). India would need to recognise that such a far-reaching industrial revolution cannot be accomplished by domestic players alone and so India would set out to become a manufacturing base for the world by attracting industrial investments from key countries like Japan (see our Sign leader from May-2014 India and Japan: The Strategic Agenda ), the US, Germany (and other EU countries), and also China.
•  Injecting IT into Industry to Create the Next Generation Intelligent Manufacturing Base. India would leverage its strong services sector and in particular its world-class IT industry to infuse IT into manufacturing, using analytics to drive supply chain efficiencies and productivity growth through the full use of IT deployed at scale. India’s large pool of trained manpower including its engineers and researchers would help it become a global innovation hub and laboratory. India has already proved that it can do this and become globally-competitive in sectors such as automobiles and pharmaceuticals. The industrial revolution would see this advantage extended to several other sectors.
• Scaling India’s Artisanal Manufacturing Class. In order to harness the true potential of its large number of SMEs which employ close to 40% of the country’s workforce and dominate several key product markets such as textiles, handicrafts and metal products, India would need to organise and scale these businesses through joint ventures and additional investment. Prominent examples of such mid-sized often family owned and run class of businesses exist in Germany where they are highly respected (called the “Mittelstand”) and also in Italy and Japan which have each spurred innovation and have created globally-competitive scaled players with strong brands in several sectors and extended their reach across the domestic markets and the rest of the world through exports.
• Building India’s Chaotic Cities into Smart Manufacturing Clusters. India’s metros and urban centres are dominated by slums which are hotbeds of economic activity however operating far below their potential (see our Sign leader from October-2013 Transforming India’s Slums: A Critical Step in Creating the New India ). Various cities in China, Japan, Dubai and the US have experimented with creating smart cities and industrial clusters geared around innovation – with varying measures of success. Developing an industrial model for its cities which leverages the economic potential of slums would ensure India’s cities become highly productive and also plan for urbanisation so that they are not subsequently plagued by the type of pollution that is now assaulting the lives of Beijing and Shanghai’s citizens. On this front there are important lesson from China’s industrial experience (See our Sign leader from April-2013 China’s Potential Green Future ).
• Building Islands of New Rules and Regulations. Rather than wait for a nationwide consensus on the aggressive reform program which will be difficult given India’s complex political climate, India could also opportunistically create islands of reform with states and special economic zones with a clear set of new rules in order to immediately start attracting additional industrial investments. China has demonstrated this strategy to great effect with its trade zones along the coastal provinces whose success has effectively provided the benchmarks for the other provinces and regions of the country to reform. The Shanghai Free Trade Zone is a whole new level of strategy, through which, if China is successful, it will create the seeds of a new-rules China: more transparent, more legally bound and far easier to do business with.
• Transforming India into a Power and Resources Industrial Giant. India is well-endowed with natural resources which it has nowhere close to fully harnessed. Vast untapped coal reserves, discoveries such as the offshore KG basin (which could double the size of India’s natural gas reserves ) and the hydroelectric power potential in the country’s northeast worth an estimated US$35 billion annually point to an opportunity to transform India into a resource hub like Australia or Texas. A similar opportunity also exists in food production where India’s yields per acre are a fraction of China’s and the rest of the world’s. India would need to mobilise significant investment to explore and harness these resources both to power India’s own growth and also to become a global resources hub.

Pre-Requisites for Successfully Executing the Vision and Strategies

This Indian election, perhaps more than any other in India’s history, reveals a population that does not accept democracy as an excuse for slow and ineffective change. If the Modi government is to continue to be a force that is trusted by the population to deliver, it will need to implement a bold vision and the type of strategies that go with such a bold vision and it will need to do so very quickly. The lengthy legal processes of India’s democracy cannot be held up as an excuse for failing to deliver. China’s non-democratic government election process has delivered far better than India’s democratic one. The bulk of evidence from Freedom House and other analysts, make clear that this is a failure of leadership in India rather than a failure of democracy. The pre-requisites for success include the following:

• Maintaining a Stable Powerful Government for Next 10-15 years. President Xi can expect to have 10 years to deliver his agenda . However, unlike China’s government, Modi’s government can only legitimately be in power if the electorate says so. So if it fails to secure three election victories, it seems unlikely to have the time a Chinese leader has to deliver. So of course, it will need to convince the electorate and this requires it to deliver. The first betrayal of the electorate would be to mismanage its agenda and deliver the country back to shaky coalition politics and policy gridlock. It will be critical to maintain a stable governing majority while de-politicising the idea of industrial growth. Brazil demonstrated from year 2002 to 2011 how a government with a strong mandate managed to build a political consensus for reforms and growth.
• Tackling Corruption and Inefficient Governance. Rapid reforms and development will require transparency in government processes. Improving administrative effectiveness, while reducing the discretionary powers of government officials will be needed in order to ensure that industrial development happens at the required pace. India currently stands at 94th in the global league table for corruption and 134th for ease of doing business and will be watched closely for progress.
• Launching a Massive Build-out of Transport Infrastructure. The competitiveness of manufacturing in India will depend not only on flexible labour markets and low labour costs, but also on the costs imposed through the country’s lack of adequate infrastructure. Building a robust trade and transport network (highways, ports, etc.) will be critical to reducing logistics costs and thereby improving competitiveness. Previous governments’ ambitious unimplemented plans stand as a starting point but implementing these will require huge amounts of foreign capital and this will require a new “trust contract” will global capital providers.
• Opening India to Large Amount of Foreign and Domestic Capital. Industrial growth is far more capital-intensive than service sector growth, and will therefore require large amounts of capital to be mobilised – both by opening India to large foreign investment and unlocking domestic capital currently tied up in unproductive physical assets (like gold). India has benefited from being averse to debt but there are not decent comparables of the levels of financing required for India’s infrastructure and industrial plans that do not deploy large amounts of debt. If the Modi government indebted India, its place in history would be marked for all the wrong reasons. The new government will need to consider new structures involving debt and equity, combinations of public and private capital and sovereign and pension funds.
• Creating a Level Playing Field for Domestic Manufacturers. It will be impossible to build a consensus around the influx of foreign capital without creating a level playing field for domestic manufacturers. Rationalising poorly-targeted subsidies and trade barriers while ensuring the tax and regulatory framework does not disadvantage domestic manufacturers will be required. However, the focus for the short term will be the bank interest of a domestic player versus a foreign one. Given foreign interest rates are still close to zero compared to current Indian interest rates of 8-10%, this will require all manner of risk capital through private equity and sovereign capital. This may still not be enough and India may also need to consider a state owned fund to kick-start its agenda.
• Leveraging the Low Currency While it Lasts. The Indian rupee has depreciated 32% against the US dollar in the last decade. This, combined with India’s already low-cost base, has given India a window where it is relatively more competitive against other low-cost manufacturing locations. It will be critical to harness this advantage before the currency moves in the other direction.
• Creating Success Stories and “Champions” in States. Creating national manufacturing champions (like Gujarat) out of the states and zones where reforms can be implemented will be critical in creating case studies of success and a competition amongst states. China managed to do this successfully by rewarding provinces which delivered industrial growth while extending their success to other areas.
• Measuring and Communicating the Results. In India’s chaotic democracy, to maintain and build its political capital, the government will need to build public support its vision for reforms and industrial growth. To sustain this consensus, constant measurement and communication of the results will be needed through strong leadership. The Modi government managed this highly effectively in the pre-election period. The challenge of continuing to hold the attention and goodwill of the people in the years to come through what will be a time of huge change while allowing a robust press and analyst community to challenge policy will be the test of the government and the will of the people to exert their rights.

Key Conclusions: Manufacturing is the Only Way for India to Fulfil its Demographic Destiny.

India’s election revealed a people that were prepared to use the democratic process, rather than revolutionary process that is sweeping the Middle East, to demand radical change. That mission was handed to Mr Modi more so than his party or his colleagues. The execution of that mission has occupied Mr Modi in appointing his team and setting new ground rules. The fleshing out of what it means to deliver on the mission is clearly one of the most challenging tasks in a country of nearly 1.3 billion people and rising (to over 1.6 billion by 2050). One of the most fundamental requirements will be to employ the people in ways that are productive and fulfilling. The failure of India leaders to date has been in this most fundamental requirement.

Clearly, if the Indian leadership can implement a plan that creates a productive world class industrial base, the impact could be dramatic: India could close the manufacturing competitiveness gap with China within 5-10 years instead of 15-20 years and thereby achieve overall GDP growth rates of over 10%. Doing this would create in excess of 15 million new manufacturing jobs per year over the next decade thereby providing high quality employment to households comprising almost half of India’s population. Widespread modernisation and development for India cannot happen without industrialisation on such a scale because it is the only way the country can re-deploy its agrarian labour force which for decades has been under-employed. It is also linked to other critical structural changes India will need to make such as land and labour reform. While the services sector has attracted a lot of glory for India, it may prove to be irrelevant in the longer-term if India fails to take advantage of the opportunity to build a large industrial base which can be a genuine job engine.

The path for India is clear: the only way it will generate growth and employment on the scale required to fully harness its demographic advantage is by creating a unique Indian model for industrialisation. No other large country has managed to create widespread prosperity without building a large industrial base. India’s industrial model which leverages the lessons of history and global best practices, like China’s, promises tremendous economic and social consequences for the country (see inset for some of the areas where it would transform India). However it would also re-position India in the geopolitical world order – making it a global economic powerhouse in both services and manufacturing, and hastening by several generations India’s rise into one of the largest and most dynamic countries in the world.

• The “Asian Tigers” refers to the experiences of Hong Kong, Singapore, South Korea and Taiwan which maintained growth rates of 7% and above from the 1960s until the Asian Financial Crisis in the late 1990s building large industrial economies in the process  
• Nominal per capita GDP in US dollars factors in relative movements in the INR and RMB
• Source: “The East Asian Miracle: Four Lessons for Development Policy”, John Page, National Bureau of Economic Research  (1994), available at http://papers.nber.org/books/fisc94-1
• Source: United National World Investment Report 2014
• According to a McKinsey analysis (“Fulfilling the Promise of India’s Manufacturing Sector”), over half of India’s large manufacturers do not return the cost of capital
• Source: Reserve Bank of India, Gross State Domestic Product Report
• Source: Planning Commission, Average real growth rate of GDP from Industry from FY2006-FY2014
• Source: Steven J.  Dickinson, Fredrikson & Byron, P.A.  (Oct-2013)
• A lack of comparable data makes it difficult to incorporate the ease of doing business metrics (such as time and cost of exporting) into a unified manufacturing competitiveness framework
• The most recent (Apr-2014) edition of the IMF’s World Economic Outlook estimates that India will grow at an average GDP growth rate of 6.4% between 2014-2019 (latest year for which projections are available)
• Source: Economic Times, 9-June-2013
• Source: Planning Commission of the Government of India, India’s poorest state (Bihar) had a per capita GDP of c.US$500 vs.  US$3,500 for the state of Delhi (latest available data for year ending Mar-2013)
• Source: Economic Times, 27-May-2009 (http://articles.economictimes.indiatimes.com/2009-05-27/news/27646670_1_gas-reserves-kg-basin-discoveries)
• Based on analysis in previous issues of the Sign of the Times
• Source: 2014 Freedom of the World Report, Freedom House
• The Chinese President’s term of office is five years.The president and vice-president are both limited to two consecutive terms, so ten years in total.The President is elected by the National People’s Congress which is China’s highest state body and has the power to remove the President and other state officers from office.

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Make In India

Case study; make in india, make in india, theme: services.

Theme: Manufacturing

Launched: December 2014

Stakeholder: Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India; Indian manufacturers, global investors, consumers

A strong manufacturing sector is critical for an economy like India, especially considering the huge employable workforce in the country and the need for self-sufficiency in a number of sectors to bring down the trade deficit. Manufacturing is urgently needed to provide livelihood opportunities to a huge chunk of the population outside of agriculture. The manufacturing sector supplies quality products across the supply chain, thereby fueling the growth and productivity of other sectors in the process.

Shri Narendra Modi, Hon'ble Prime Minister of India, launched the visionary Make in India programme in September 2014. The programme is aimed at transforming India into a global hub for manufacturing, research & innovation and an integral part of the global supply chain. The programme aimed at building confidence in India's strengths and potential as a manufacturing hub across internal and external stakeholders. It has led to a major rehaul of processes and policies to enhance ease of doing business in India. Indeed, this is the single largest manufacturing initiative by any country in the recent past.

Some of the initiatives undertaken under Make in India are as follows: .

• Twenty five sectors have been selected under Make in India; a framework was developed to share a large amount of technical information on these sectors. Domestic and international audiences are constantly updated with latest information on opportunities, reform measures, etc.
• FDI has been liberalised in some key sectors including Defence Manufacturing, Food Processing, Telecommunications, Agriculture, Pharmaceuticals, Civil Aviation, Space, Private Security Agencies, Railways, Insurance and Pensions and Medical Devices.
• Several reforms undertaken to enhance ease of doing business and enhance FDI
• Industrial corridors and smart cities are being built at a fast pace.
• Intellectual Property Rights (IPRs) registrations are being accelerated and measures are being taken to cater to the training needs of the skilled workforce.

The manufacturing sector is expected to reach US$ 1 trillion by 2025 and contribute about 25% to India's GDP. Under the Make in India programme, indigenous manufacturing is expected to increase by 12-14% per annum over the medium term. As per the World Bank, manufacturing contributed about 16% to the country's GDP in 2016. This is on the higher side when compared with the global average of about 15% in 2015.

Manufacturing is expected to create 100 million additional jobs by 2025, considering how India is now one of the most attractive destinations for investments in this sector. Most leading companies including those of defence equipment, mobile phones and automobile brands have established or are looking to set up their manufacturing base in the country, which will have a positive impact on job creation.

Since its launch, Make in India has played a major role when it comes to improving ease of doing business in India. The various initiatives being undertaken have made a hugely positive impact on investor confidence. Some of the major achievements are as follows:

• Total FDI between April 2014 and March 2017 amounted to around 33% of cumulative FDI into India since April 2000. In 2015-16, FDI inflow crossed US$ 50 billion for the first time in any fiscal, and further in 2016-17, FDI reached a record figure of US$ 60 billion. Cumulative FDI inflows from April 2000 to March 2018 had reached US$ 546.45 billion (including equity inflows, invested earnings and other capital). In 2017, India retained its position as the world's most attractive destination for greenfield FDI.
• Measures to improve business confidence have led to progressive improvements in India's rank in the World Bank's ease of doing business rankings from 142 in 2014 to 100 in 2017.
• Five industrial corridors and 21 new nodal industrial cities are being developed to boost industrial growth.
• The Insolvency and Bankruptcy Code 2016 has consolidated all rules and laws pertaining to insolvency into one legislation, thereby bringing India's bankruptcy code in step with global best practices.
• The Government of India introduced a holistic National Intellectual Property Rights (IPR) policy in May 2016 in order to spur creativity and innovation in the Indian economy. During April - October 2017, 45,449 patents and 15,627 copyrights were filed in India, out of which 9,847 patents and 3,541 copyrights were granted.

References:

• http://dipp.nic.in/sites/default/files/FDI_FactSheet_29June2018.pdf
• http://www.makeinindia.com/home
• http://pib.nic.in/newsite/PrintRelease.aspx?relid=174892
• http://mofapp.nic.in:8080/economicsurvey/pdf/120-150_Chapter_08_Economic_Survey_2017-18.pdf

Last updated: September, 2018

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India, the emerging strategic manufacturing and sourcing hub

Driven by various trade disruptions (like trade wars, the pandemic, natural disasters, significant supply constraints, Brexit, the Ukraine war, and assertive industrial policies), many global firms have relocated some of their manufacturing from China in the past five years while others are planning for the same in the coming years.

India has great potential to develop as a strategic manufacturing and sourcing powerhouse as it has a broad manufacturing base, and is cost-competitive as well.

Image Source: Shutterstock

In recent years, many multinational companies around the world have examined their heavy concentration in China. Factors like rising labour costs in China, the ongoing trade war between the United States and China, and concerns over China’s political and economic stability are driving the trend where firms are shifting some of their production (from China) and sourcing to different countries. On the other side, there are some countries that are rising up as attractive and popular destinations for businesses moving out from China. 

Countries like Vietnam, India, Mexico, Indonesia, and Bangladesh are emerging destinations which provide- more affordable labour, a more stable political environment, growing scale & capabilities across various industrial sectors, and accessibility to major markets. These countries are fast emerging as the future export manufacturing hubs. Morocco and Turkey, along with other countries are also expanding their export manufacturing driven by competitive costs, abundant labour, and proximity to the European Union (EU) and other markets. 

India, in particular, offers additional benefits, as it possesses an extremely vast domestic market. 

India has evinced, that it wants to increase its economic and production output. Several measures undertaken by the government in this direction include – minimizing taxes and regulations on businesses, raising infrastructure spending on roads, ports, and airports, and facilitating international business investment into India. Efforts of the government to attract those businesses moving out of China appear to have been quite efficacious. On the world stage, India’s manufacturing success over the past five years has been remarkable.

The recent study report titled ‘Harnessing the Tectonic Shifts in Global Manufacturing’ by Boston Consulting Group ( BCG) highlights India’s advantage in direct manufacturing costs as an export podium.

According to the BCG’s report, the average cost (including the factory wages, productivity, logistics, tariffs, and energy) of Indian-made goods imported into the US is about 15% lower as compared to the goods manufactured in the US. However, the goods manufactured in China give only a 4% cost advantage over the US-made products. In fact, goods made in China amount to be 21% more expensive when subject to US tariffs resulting from the trade dispute between them. 

Some major observations of the BCG report

The BCG study report states that over 90% of the North American manufacturers who were surveyed have shifted some of their production from China during the last five years. About the same proportion intends to relocate their production in the next five years. These shifts are being driven primarily by the perpetual pursuit of low costs, keenness to reduce lead times, operate in a more stable business environment and improve flexibility to respond to any disruption (even if it is at the cost of a number of operating margin points).

In most countries, wage inflation has surpassed productivity gains during the last few years. According to the report Labor costs adjusted for productivity increased by 21% in the US and by 24% in China during the period 2018-2022.  The productivity-adjusted labour costs increased by 22% in Mexico and by 18% in India. Despite this wage inflation, these two nations (Mexico and India) continue to be the most competitive manufacturing sources in the world.  

Over the last five years (2018-2022), in inflation-adjusted terms, India’s exports to the US rose by US$23 billion, registering a growth of 44%. The US goods import rose by 18% from Mexico, and by 65% from the ten countries of the Association of Southeast Asian Nations (*ASEAN). However, China experienced a 10% decline in exports to the US during the period, according to the BCG study report.

(*Association of Southeast Asian Nations countries- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam).

The study noted that India’s shipments of semiconductors and materials to the US witnessed a significant increase of 143% over the past five years. Export of auto components from India to the US grew by 65% while mechanical machinery exports to the US increased by 70%. The following table shows the change in US goods imports during the last five years (2018-2022).

Table: Change in US goods imports, excluding energy, during 2018–2022 (US$ billions, % change)

The report highlights that the new emerging destinations for relocation of manufacturing are beginning to expand their scales and capacities. India is rapidly developing as a manufacturer of engines and turbines; Morocco is emerging fast as a destination for automotive assembly and components; and Vietnam is developing as a centre for consumer electronics. Companies that enter these emerging manufacturing destinations early, may take advantage of the opportunity to establish capacity while labour, land, and other factors are inexpensive and readily available.

As regards India, the report states that India’s logistics infrastructure is unevenly developed, its environmental sustainability is not that robust, and it has fewer free-trade agreements with other nations except for members of the ASEAN. Nevertheless, India is very cost competitive and it has recently negotiated trade deals with Australia and the United Arab Emirates. Although India is just starting to emerge as a major exporter, it has a broader manufacturing base that supplies everything from electric vehicles and heavy machinery to chemicals and appliances to its domestic market.

Forging ahead

Each of the emerging locations has its own advantages and disadvantages. According to the BCG report, Mexico is a cost-competitive near-shoring location for the US market, but other key operating conditions are poor in some parts of the country. Southeast Asia is highly cost-competitive as well, but it is far from North America and Europe. In addition, labour availability can be difficult, and sustainability is a concern in the Southeast Asian region.

India has become one of the world’s fastest-growing economies, with its manufacturing sector making significant strides on the global stage in the past five years. For businesses that wish to move from China, India provides a workforce that is cost-effective and easy to train, as well as a domestic market with an expanding consumer base. Additionally, there is growing interest in trade and investment. Moreover, several countries and regional blocs, including the UK, Canada, the GCC, Bangladesh, Israel, the European Union, and the Southern African Customs Union, are in talks with New Delhi to negotiate trade deals.

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Implementation of Sustainable Manufacturing Practices in Indian SME: A Case Study

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• Naveen Anand Daniel 13 ,
• Ravinder Kumar 13 ,
• Rahul Sindhwani 13 &
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The objective of Sustainable Manufacturing practices (SMP) in manufacturing industries are to minimize the adverse effects of manufacturing operations on the environment and at the same time optimize the production efficiency. In post COVID-19 scenario, customers and manufacturers both are more conscious about the sustainability initiatives. Traditionally the concept of Sustainable Manufacturing (SM) was looked upon by the small-scale industries as the hurdle to the efficiency and profitability. Many researchers have carried out the studies and shown that the adoption of SMP is beneficial in the long term for manufacturing organizations. However, studies on SMP adoption in small and medium enterprises (SMEs) need to be done holistically. Current research presents a case study on adoption of SMP in an Indian small-scale industry. Semi structured interviews, website, and other published information are source of primary and secondary data used for case study. From case study it is observed that technology up gradation, training of employees, formulation of appropriate organizational policies, following government rules and regulations, proper handling of the market competition, creating customer demands are the main factors that case organization considers for the implementation of SMP.

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Daniel, N.A., Kumar, R., Sindhwani, R., Mathiyazhagan, K. (2023). Implementation of Sustainable Manufacturing Practices in Indian SME: A Case Study. In: Kumar, H., Jain, P.K., Goel, S. (eds) Recent Advances in Intelligent Manufacturing. ICAME 2022. Lecture Notes in Mechanical Engineering. Springer, Singapore. https://doi.org/10.1007/978-981-99-1308-4_25

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Case Study: India is competitive manufacturing location due to the low cost of manpower and strong technical and engineering capabilities contributing to higher quality production runs. The production of TV sets in a factory increases uniformly by a fixed number every year. It produced 16000 sets in 6 th year and 22600 in 9 th year. 1) Find the production during 8th year. 2) Find the productiion during first 3 years. 3) Find the difference of the production during 7th and 4th year.

1) production during 8 th year is ( a + 7 d ) = 5000 + 2 ( 2200 ) = 20400 2) production during first 3 year = 5000 + 7200 + 9400 = 21600 3) difference = 18200 − 11600 = 6600.

A manufacturer of TV sets produces 600 units in the third year and 700 units in the 7 t h year. Assuming that the production increases uniformly by a fixed number every year, find :

(i) the production in the first year.

(ii) the production in the 10 t h year.

(iii) the total production in 7 years.

The production of TV in a factory increases uniformly by a fixed number every year, if produced 8000 TV's in 6 t h years and 11300 in 9 t h year find the production in 1 s t year and 8 t h year

A manufacturer of TV sets produced 600 sets in the third year and 700 sets in the seventh year. Assuming that the production increases uniformly by a fixed number every year, find : (i) the production in the 1 s t year (ii) the production in the 10 t h year (iii) the total production in first 7 years

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Industrial Manufacturing Case Studies

Mark Jackley | Content Strategist | July 31, 2023

In This Article

4 Industrial Manufacturing Case Studies

Achieve your objectives with oracle, industrial manufacturing case study faqs.

Whether a company makes steel wheels to keep the auto aftermarket turning or architectural building products for some of the most iconic structures, it needs data and technology to solve its toughest problems.

The case studies below show how four industrial manufacturers—Alcar Ruote, Construction Specialties, Precision Group, and ArcelorMittal—improved operational efficiency, supply chain visibility, machinery maintenance and repair, global staffing, and the overall customer experience in part by using the latest cloud applications.

Key Takeaways

• No matter what they make, industrial manufacturers deal with common challenges, such as sharing data across departments and functions and improving visibility into their supply chains.
• Industrial manufacturers are moving to cloud-based applications with the latest features to overcome some of their toughest challenges.
• Such applications let industrial manufacturers improve operational efficiency, respond faster to changing markets and conditions, and position themselves for growth.

Faster, better, more cost-effective. It’s the mantra of manufacturers that turn raw materials into computers, farm equipment, chemicals, plastic soda bottles, you name it. This usually means relying on automation and not just workers to perform key tasks again and again.

These case studies span a range of companies solving common challenges by implementing Oracle Cloud software applications. Let’s start with a manufacturer that believes “Swiss made” is more than a label.

1. Industrial Manufacturing Case Study: Alcar Ruote

Part of a multinational holding company, Alcar Ruote designs, produces, and distributes steel wheels for the automotive aftermarket. The Swiss manufacturer relies on technology to produce top-quality products at a competitive price—and deliver them on time.

When new cars hit the market, the company needs to manufacture the right wheels to spec. But its on-premises applications couldn’t provide the real-time data it needed to accelerate order management, enhance customer service, and lower costs. Fresh data was also needed to evaluate business systems and correct any problems, including production issues.

Alcar Ruote chose Oracle Fusion Cloud Supply Chain & Manufacturing and Oracle Fusion Cloud ERP applications to manage key business processes: manufacturing, planning, order management, procurement, and financials.

Oracle Fusion Cloud Order Management , part of the Oracle Cloud SCM suite of applications, automated order-to-fill processes. Now 80% of sales orders are generated automatically, accelerating the order process and boosting customer service.

Internet of Things (IoT) technology within the Oracle platform lets Alcar Ruote analyze sensor data from shop floor devices, predict equipment failures, take corrective actions, and reduce downtime. The technology runs on Oracle Autonomous Database , which processes data in real time across multiple applications.

“Swiss quality is a sort of dogma,” says Stefano Mariani, head of IT at Alcar Ruote. “You expect top-level quality and on-time delivery.” In using technology to achieve those goals, he says, “we see Oracle as not only a vendor, but also as a partner.”

2. Industrial Manufacturing Case Study: Construction Specialties

For 75 years, Construction Specialties has made a wide range of architectural building products: doors, wall coverings, architectural louvers and screens, flooring, safety vents, and other treatments. Architects have specified the company’s products for the most sturdy, elegant structures, including the Kennedy Space Center Visitor Complex in Florida and One World Trade Center and the redesigned exterior of Madison Square Garden in New York.

In recent years, competitors have emerged to meet increased demand for environmentally sustainable buildings. Construction Specialties had a strong sustainability record, but it needed to get the word out to architects, interior designers, contractors, property owners, and facility managers. The company needed applications to manage the marketing and social media campaigns it created for each customer persona and to track resulting orders through their lifecycle—from marketing and online sales to production and payments.

The goal was twofold: Increase sales and enhance each customer’s end-to-end experience.

Construction Specialties chose Oracle Advertising and Customer Experience (CX) and Oracle Fusion Cloud ERP to manage orders from start to finish. The application suites integrate with others to unify digital marketing, online sales, supply chain operations, and finance. Sales staff and customers have a single place to search for, configure, and order hundreds of highly complex, engineered-to-order products.

“Our number one reason for upgrading to Oracle Cloud was to make it easier for our customers to do business with us,” says Mike Weissberg, digital marketing manager.

Construction Specialties teams now have an integrated suite of applications to view inventory, identify the best shipping options, and forecast lead times. Once quotes are approved and entered into the system, it automatically triggers events such as picking inventory, procuring parts, and scheduling production. As it processes orders, the application suite generates invoices.

“The cloud has completely taken away all of the maintenance and custom-coding requirements that were bogging us down,” says Arthur Cosma, enterprise automation manager.

3. Industrial Manufacturing Case Study: Precision Group

Precision Group operates two manufacturing companies: Precision Dies & Tools and Precision Plastic Products. The latter makes plastic packaging for multinational companies, including Unilever and Procter & Gamble. Many customers partner with Precision on key R&D projects.

Founded in 1984 in the United Arab Emirates, Precision requires cost-effective procurement of office equipment and supplies, capital equipment, and other goods and services. But its enterprise resource planning (ERP) application, which dated back 25 years, lacked automation and integration. Tasks such as vendor evaluation were completely manual. Managers had no visibility across procurement workflows.

Precision implemented Oracle Fusion Cloud Procurement in part to accelerate the process of qualifying suppliers on their financial stability and ability to deliver quality goods and services on time. Precision’s procurement is now 100% digital; paper purchase orders are a thing of the past. The company generates POs directly from requisitions—without manual intervention—and automatically applies negotiated pricing and terms from supplier agreements.

As a result, Precision reduced purchase order approval times by 40%. Self-service procurement features let employees shop for products and services much faster, including on mobile devices. Requisitions go to managers for approval automatically, reducing approval times by days. Overall, transactions are processed nearly two times faster than before.

4. Industrial Manufacturing Case Study: ArcelorMittal

ArcelorMittal is the world’s leading steel and mining company, with primary manufacturing facilities in 16 countries and an industrial presence in 60. Formed when India’s Mittal Steel merged with Luxembourg’s Arcelor, ArcelorMittal is based in Luxembourg City and produces steel for numerous industries, including automotive, construction, mining, household appliances, and packaging.

In competing for talent globally, the company faced stiff challenges. Its recruitment teams were decentralized, using different applications and practices, making it difficult to coordinate talent searches, especially for specialized jobs. That lack of standardization also led to overreliance on costly staffing agencies and prevented ArcelorMittal from creating the consistent branding needed to attract top talent.

ArcelorMittal turned to Oracle Fusion Cloud Recruiting , part of the Oracle Cloud HCM suite of applications, to standardize the process of staffing jobs globally, including positions as varied as factory worker, logistics coordinator, sales executive, and mining specialist.

Oracle Recruiting has helped land talent for hard-to-fill high-tech jobs. In Poland, home to many high-tech companies and startups, ArcelorMittal received 1,400 applications in only eight weeks after launching Oracle Recruiting. Previously, HR teams often received just one or two applications per job opening in key markets.

Company recruiters have visibility into all recruitment activities, including requisitions, to avoid duplication. Standardized reports across a range of metrics help ArcelorMittal continually improve its recruitment strategies.

Metrics such as time to hire, number of applicants, and applicant-to-interview ratios per geography or job type inform when and how ArcelorMittal should use staffing agencies.

The unified recruitment system lets HR teams in different locations working on similar types of jobs exchange candidate information. Teams can also pool external advertising resources.

A single branded ArcelorMittal careers site lists every open position and makes it easy for people to apply and track the status of their applications. Delivering such a smooth application experience helps present the company as a desirable place to work.

Oracle Fusion Cloud Supply Chain Management (SCM) & Manufacturing, integrated with Oracle Cloud ERP , lets industrial manufacturers plan demand , supply, and production more accurately, reducing disruptions , containing costs, and getting products to customers more consistently and reliably. Omnichannel order fulfillment accelerates orders and boosts customer satisfaction. Simpler, automated, more uniform procurement helps companies pick the best suppliers, create and approve orders faster, and enforce compliant spending.

Oracle Fusion Cloud Manufacturing offers IoT capabilities that simplify shop floor scheduling and production runs while monitoring machine health. Oracle industrial manufacturing cloud infrastructure , in tandem with Oracle Autonomous Data Warehouse and Oracle Analytics Cloud , lets manufacturing teams analyze data across application workloads. Oracle Cloud Human Capital Management (HCM) helps companies hire and retain the talent they need to compete globally.

The companies in these case studies relied on the products above, in various combinations, to overcome major challenges in procurement, order management, production monitoring, and financial standardization.

What are examples of industrial manufacturing? Industrial manufacturers make and process various products, including automobiles, aircraft, steel, plastics, rubber, chemicals, semiconductors, computers, consumer electronics, oil and gas, and building products.

What are some of the top issues in industrial manufacturing? The industry faces issues that include a shortage of skilled workers, continued supply chain disruptions, compliance with myriad regulations, pressure to establish environmentally friendly and ethical business practices, further automation of production processes, and the manufacturing of products just in time to meet demand.

How are manufacturers solving their biggest challenges? Increasingly, industrial manufacturers rely on a range of technologies to help solve their biggest challenges. For example, IoT technologies that make it easier to monitor production, inventory, and machine maintenance. Integrated financial applications that help business units work as one. SCM applications that help keep their supply chains humming and gather the data they need to increase sustainability and transparency. Human capital management applications that improve recruiting, onboarding, training, and career development.

See how Oracle’s supply chain solutions reduce risk and cost.