Page 67 - Built Expressions - Online Construction Magazine - November 2014 Issue

Cover Feature R&D enhancement and capital expenditure requirements. The Route to Success technology indigenization. OEM support is especially benefcial The ECE components and aggregates industry is likely to experience a to small suppliers, which form the Establishing R&D bulk of the market but often struggle growth spurt in line with the ECE centers focused on to withstand sharp swings in demand. industry over the next fve to seven product innovation and • OEM investment in developing years, thanks to growth in both suppliers’ domestic business and exports. OEMs capabilities. indigenization could and suppliers can take up joint However, the components industry help improve product development exercises, including will need to collaborate very closely availability and quality and state-of-the art manufacturing with OEMs in areas such as capacity capabilities, training and skills planning, technology adoption, and make India’s players more development, and quality monitoring indigenization of manufacturing to competitive compared to and compliance. ensure tandem growth. Adopting best foreign suppliers. • R&D enhancement and technology practices for supplier development Establishing indigenization. from adjacent industries, such as R&D centers focused on product innovation the auto industry, can help guide and indigenization could help improve solutions. product availability and quality and A robust supply chain for components will largely continue to make India’s players more competitive components and aggregates, closely be imported. compared to foreign suppliers. coordinated with OEMs, can help • Price infation of raw materials. Technological collaboration across the improve capacity planning, which Prices of materials such as steel and value chain spearheaded by industry, in turn can help reduce variability crude oil drain margins because research institutions, and industry of demand and improve inventory vendors have a limited ability to pass bodies can drive market-centric control in the supply chain. More R&D price increases on to customers. innovation. focus and indigenization can also help • Increased cost competitiveness. Taking to build local competence, in turn Overcoming the Challenges into account the highly price-conscious improving the export competitiveness of Best practices from OEMs across the Indian customer, component suppliers supplies. Lastly, sustaining component world and examples from adjacent would be wise to lower costs while suppliers through improved cost industries such as automotive can help maintaining their product quality. competitiveness is vital to the equipment guide solutions for India’s components Developing India-centric product industry. Overall, a robust components and aggregates industry. offerings with tailored, frugal designs and aggregates supply base can be a • OEM support for suppliers’ capacity with an eye on cost optimization strong catalyst for growth in the ECE planning. OEMs could follow the could be highly benefcial in the long industry. BE example of the automotive industry, run. OEMs could also give suppliers where players such as Maruti and more fexibility for value-engineered Hyundai have worked with parts product designs. More local control suppliers to develop and coordinate over product designs at the OEM end To read more: order schedules, capacities, and and more supplier involvement at an • http://www.ipsosconsulting.com/pdf/ demand forecasting. Closer earlier phase of the design process Ipsos-Research-Note-India-Construction- collaboration of OEMs with suppliers can also help. Equipment.pdf can mitigate risks such as volume At the same time, localizing sourcing • http://www.atkearney.com/ fuctuations, improve component and manufacturing of components is a documents/10192/4399341/Road+Map+to+ customization, and help leverage one good way to lower costs. Following the Success+for+the+Construction+Equipmen another’s expertise. Communicating example of industries such as defense t+Industry.pdf/44777e2a-7556-4da1-b07d- about OEM plans to add capacity will with compulsory offset clauses, c6f0220a04e3 beneft suppliers by allowing them regulatory bodies can mandate that to plan their production schedules OEMs locally source a certain %age in a volatile demand environment of components.This would not only and better manage their inventory. encourage component suppliers to Furthermore, establishing supplier localize, but would also help build For Latest Updates parks with shared facilities can capabilities in the Indian components www.builtexpressions.in substantially minimize incremental industry. Vol: 3 Issue: 11 November 2014 Built Expressions PG 67