Global Businesses, India and Manufacturing

Hey ‘Aam Aadmi’, Get Your Act Together

Rahul Kapoor — Mon, 15 Aug 2011 19:29:04 +0000

There were six guys. Thought they would have the evening tea at the Leela Palace. Boarded a Volvo for one stop, minimum ticket Rs 10. One guy strikes a deal with the Ticket Collector: Rs 40, no tickets. The TC was happy. Rs 40 to supplement his meager income. The guys who would probably have paid a Rs 50 tip at the Leela Palace were also happy to save 20. The ghotala (scam) cost the government, who owns the bus and pays the running cost, Rs 60. Ghotala is probably too harsh a word for such a thing. Rs 60, nothing big.

But then, I am a tech guy. I have studied the real world implementation of Integral Calculus. Everything is made up of infinitesimally small elements. Integration means summation. Summation of atoms make things, summation of droplets make oceans, summation of rocks make mountains, summation of people make governments and nations.

Summation of what makes corruption? A police officer asking for petty bribes to supplement his meager income; an executive claiming reimbursements more than he is due; a common man eating at a crowded snacks corner and not paying the helpless shopkeeper (I have seen well off people do this); a traveller not buying a local train ticket because she is getting late and there is a queue; a ticket collector keeping the un-billed cash to himself; a businessman illegally evading tax because the government is “anyways” not building infrastructure.

Unfortunately Aam Aadmi (common man), you are responsible for ghotalas worth more than 100 crores everyday. Everyday. Why make the 2G scam and CWG mess scapegoats?

We don’t need to fast or go to jail to fight corruption. We need to get our act together, teach our kids accountability and strongly insist accountability from people we deal with everyday.

A Non Integrated ERP System

Rahul Kapoor — Thu, 10 Dec 2009 05:31:42 +0000

"Research findings demonstrate that, today, manufacturers have very good reasons to undertake a thorough transformation of their operations management, aiming towards real-time manufacturing. The new challenges requested by real-time manufacturing execution expose the weaknesses and fragmented nature of software applications currently used by the industry. Additionally, the need for a tighter integration between ERP and shop-floor data, wider interoperability and data standards, and better manufacturing intelligence and visibility becomes readily apparent."

Pierfrancesco Manenti

EMEA Research Director

Even the large and successful manufacturing companies have a problem with extracting the most out of their ERP system. There is a lot of patch up software which is used by different departments to serve their own needs. This results in data being entered more than once and still not being visible across departments. A strong ERP system will happen only when the experienced people from the shop floor, planning, purchase and other departments take responsibility in the development of the ERP system. The golden rule has to be followed – "Data has to be entered only once". Adding to this – "Data has to be visible across departments".

What real time manufacturing aims at, is that everyone knows what machines are running and what jobs are being worked on where. Most often the top management is clueless about things going on on the shop floor. There is a need for real time web based screens which depict the proceedings at the shop floor. This will lead to more transparency, more accountability, better future planning and certainly better productivity.

So, if you have decided to spend money on ERP, don’t let the developers play on their own terms. Get involved in the process.

Out of recession ? So what ?

Rahul Kapoor — Thu, 22 Oct 2009 07:39:15 +0000

The government released official data that India is poised to grow at 6.5% in FY 2010. The IIM’s are happy because the hiring seems to be back on track. There are reports filing the pages of newspapers that the business outlook is looking ‘up’ once again and that the world has seen the worst. Everything is filled with hope and assurance that we would live to see better things. But the question is why do we need so much assurance from the media and our general environment to live and do business ? There is so much hope anyways. The world is filled with opportunities. There are infinite systems that need to be improved; infinite markets that need to be tapped; infinite goods that need to be created and distributed.

For once, lets throw caution to the winds and start taking decisions without the bias of external factors. It is not necessary for the outlook to be good to grow / start your business. The best businesses have weathered the worst of economic storms. Should I invest in China and India simply because they are the fastest growing economies ? What if my business culture does not tune with Chinese culture ? There are so many things apart from the macroeconomic figures and data that need to be assessed before taking decisions. Inspite of a flat growth rate, USA might be the best place to be doing business in the world. Business decisions are taken on gut and judgment rather than FDI and GDP figures.

The media is good in two things; 1. give assurances, 2. give scares (I am sure swine flu must still be spreading like wild fire). Everything else we wouldn’t care to read. So I urge people to get hold of their life’s decisions and live without the support of external factors, assurances, media and the economic recession. So what if we are out of recession ? We still need to work hard, be intense and passionate about our ideas, products and services to succeed.

Manufacturing Trade Fair, Mumbai

Rahul Kapoor — Sat, 10 Oct 2009 21:30:15 +0000

Here is a chance for Indian manufacturers to showcase their prowess in manufacturing and technology and for foreign manufacturers to get a sneak peek to enter India. The Manufacturing Trade Fair organized by Hannover Milano Fairs India Pvt. Ltd. gives the ideal environment of trust for foreign manufacturers having doubts about coming to India. Indian manufacturers can network and showcase their prowess to domestic and international clients.

Event Details: http://www.hfindia.in/HFI_upcoming_events_2009.html

Location: Mumbai

Date: 10-13 Dec 2009

A peek into India’s Labour Situation

Rahul Kapoor — Mon, 28 Sep 2009 06:44:24 +0000

There is always an inertia when you deal with age old industries like manufacturing. You got to deal with inefficient systems and unions. Even though we live in a rapidly changing world where everything seems to be getting integrated with the optical fibre network / internet, bringing about change in the manufacturing industry will be slow. One way to bring about change is to hire change makers and grooming change makers in this industry. The labour coming into manufacturing have to get skills in many more domains than just being fitters, assemblers and lathe operators. The ITI’s which are a standard entry point of workers into the manufacturing shop floor need to get as much attention from the government as perhaps IIT’s and IIM’s are getting. India is no doubt producing excellent engineers to run the manufacturing plants but its best to seek to bring about change at the lowest level, and that means we need to upgrade our massive network of as many as 6000 registered ITI’s.

Here are some facts about the labour in India which will act as eye openers and assist foreign investors thinking of investing in India to take informed decisions.

The average overall age of India is 26. The working age is 15-60 years and almost 70% of India’s population are in the working age group of 15-60 making it one of the youngest country in the world. The agricultural growth rate is flat and very less compared to the industrial growth rate. This is resulting in agricultural labourers seeking opportunities in manufacturing industry. There is a need to have in house training for workers to groom their skills.

A manufacturing plant has 3 types of hierarchy in general.

Engineers / Managers
Workers (Varying skill set and experience)
Helpers (Unskilled and required for assisting workers)

Almost everyone in the hierarchy can understand English though people in the bottom of the hierarchy may not be able to speak English. The cost of labour in India is quite low for foreign manufacturers thinking of establishing units in India. But the adaptability of labour to new technology and automation may not be good. So, there is a need to weigh the pros and cons of cheap labour according to the context. With India being a vast country there is also a need to evaluate the culture of different regions and languages before taking decisions.

I am working on a detailed report on the labour situation in India which deals with things like educational background of workers, cultural problems, unions, strikes, lockouts, disputes, working hours and general managerial viewpoints. Just send me an email to rahulkaap@gmail.com mentioning your name, organization and background and I will send you the report absolutely free of cost.

Tata Jagriti Yatra 2009

Rahul Kapoor — Thu, 17 Sep 2009 05:32:07 +0000

I was there last year and I thoroughly enjoyed it. If you are in college it is worth bunking a few days, if you are an MBA aspirant it is worth missing an entrance exam or two, if you have a job it is worth taking all your privilege leaves and if you are a startup/self employed you just can’t miss it.

An 18 day odyssey across the length and breadth of India and a chance to rub your shoulders with your entrepreneurial role models is worth everything. Such will be the impact of looking at change and change makers with your own eyes that you will seek to relive the 3 weeks again and again into the future.

Applications are open for TJY 2009. Just log on to http://www.jagritiyatra.com/ register yourself through the application process. All info/queries/doubts have their answers on the website.

India Macroeconomic Overview – FDI

Rahul Kapoor — Tue, 25 Aug 2009 18:49:06 +0000

The current environment of slowdown has had an impact on all sectors. But the slowdown is “current”. To judge an economy “by large”, it is best to look at the macroeconomic figures for the last 10 years. The reforms process is said to have begun in 1990-1991 when our current Prime Minister was our then Finance Minister. Unfortunately 1991 was ages ago and India has been sitting on those economic reforms ever since. I wish there had been some date between 2000 and 2005 which would go down in history to mark India’s economic reform. I am going to look into the data of the past 9-10 years to see how the foreign investors have reacted over time. What India needs is a reforms process which is more “radical” in nature than the present “incremental” reforms.

In the period 1991 to 2009, 82.7% of the FDI inflows have been in the last 10 years (2000-2009). So that is a healthy figure as far as the macroeconomic scenario is considered. Over last year, there is a decline of 34% in the amount of FDI equity inflows.

Another interesting fact I found out was that in the last 5 years, the top ten investing nations in India constituted 81% of the total FDI. Out of this only 11% came from European countries. Why isn’t Europe investing ? Is there a language barrier ? If we leave out UK, which is an English speaking country, it leaves only 5% FDI from the rest of Europe. We are a services driven economy. So, it seems we need solutions to service the non English speaking countries. Or better still, get them to invest in manufacturing, infrastructure and real estate.

Services, computers (software and hardware) and telecommunications together account for 41% of FDI since the year 2000. What is interesting is that, telecommunications still seems to have high growth in FDI followed by very low growth in services and decline in computers. So what are the growth areas ? The answer is real estate, infrastructure, automobile/manufacturing and power.

These are just the preliminary findings which I found worth sharing. I would love some comments (be it contradictory) so that I keep adding more quantitative research of FDI in India.

Big don’t eat the small anymore, its the fast who eat the slow now.

Rahul Kapoor — Sun, 19 Jul 2009 04:06:54 +0000

I attended a TiE meetup in Kolkata on ‘celebrating entrepreneurship’. I must say it was amazing that I did attend that seminar. I have mentioned in one of my previous post that entrepreneurship can be taught best by sharing experiences. The entire programme was based on two stories. Two Amazing stories.

Story One: Pallav Nadhani, Founder and lead programmer fusioncharts.com. From what I followed from his talk, he seemed to be all of 24 years in age. 7-8 years now he was into his business of selling animated charts and graphs for web applications and he has clients whose names include Google, Microsoft, Facebook, Intel, IBM, Dell, HP and phew so many such more. He loves drinking beer and loves eating. The title of this post was one of his entrepreneurship lessons. He thinks its because, on the internet, no one knows you are small. The internet is HUGE; use it, leverage it. Right from the start he gave away his code to the world. I am still amazed how he had the balls to do it. The idea was to be one step ahead of anybody who could exploit his code.

There are many subtle things he mentioned which helped him get at the place where he is now. Its the story which inspires in the end. He insists that you should not price your product too low, because people believe that “they get what they pay for”. In the initial stages he looked for people in companies who could take decisions on their own regarding buying his products. This saves a lot of time and effort when it comes to getting clearances from the heirarchical order in the companies. He also emphasized how you can really take off when you get your first big customer. I also faced this when we were looking for sponsors for one of our events. When you get your first big brand as your customer you can sit on its name and look for others. People somehow start trusting you. So make the effort to get your first deal.

You can know more about his product and probably about him on http://www.fusioncharts.com/

Story 2: Vidur Kapoor, Erudite. Perhaps the more seasoned entrepreneur. Not the get rich quick category surely. He started teaching in a place where there was no electricity. Today, Vidur Kapoor has a hugely successful MBA coaching institute and has also opened his business school. His actions have seemed to rectify the loopholes in the education system in Kolkata. There are colleges in Kolkata where you simply do not have to show up. You just have to go and pass exams. Punctuality is unheard of. So students after completing graduation are no better than what they were after higher secondary. When he implemented punctuality and descipline in his classroom coaching for MBA entrance exams he faced a lot of resistance from students and parents alike. So it was like trying to change the culture that is inbuilt. He did manage.

Its just that the story and the aura of people who have made it big inspires you to think that you can too. Never miss an opportunity to interact with these people and ask for help. The event was organized by TiE Kolkata (http://kolkata.tie.org/). I got to know about it from a twitter update of a person who is actively involved in promoting entrepreneurship in Kolkata (a place where entrepreneurship is still frowned upon). He has an amazing stoty himself

Understanding the Credit Crisis

Rahul Kapoor — Fri, 27 Feb 2009 03:50:40 +0000

I was browsing and came across this astonishing representation of the credit crisis. You are sure to fall in love with the animation which so beautifully describes the fall of investment banks. Here’s the link http://www.vimeo.com/3261363

Even if you have been following the credit crunch you’ll find this piece informative.

Social Change and the Web

Rahul Kapoor — Mon, 23 Feb 2009 19:36:50 +0000

The web is increasingly being used as a marketing tool. There is so much content on the web that people get lost in tons of data. Judging good from bad, relevant from irrelevant and authentic from unauthentic is not easy. Inspite of the tremendous potential of the web to get a campaign heard, web marketing is increasingly getting complicated. People outrightly reject new marketing initiatives with which they cannot connect with. At the end of the day, there are very few campaigns which utilize the full potential of the web, others just decay into this sea of eternity.

The most successful campaigns are invariably the ones with a social aspect attached to them. I consider The Pink Chaddi Campaign to be one of the biggest success stories of the web in recent times. The campaign was aimed at teaching the Ram Sena a lesson who took up the role of moral policemen and beat up women who they considered indecent. The idea was to flood the office of the Ram Sena with pink chaddis (which I think is symbolic to women empowerment). People across the country were livid with the incident of women being beaten up in Mangalore, and thus quickly connected with the initiative. The campaign spread like wildfire across the web, mostly with the facebook community which swelled to 52000 members within 2 weeks.

The idea is to have people connect with your initiative, which is more probable if your campaign is social in nature. Another great success story is the Jaago Re campaign of TATA tea. The campaign was not originally started by TATA tea, but they did well to synergize TATA tea’s marketing with a social cause. The campaign has already registered 2.5 lac voters becoming a nationwide success. This has got TATA tea a visibility on the web which no other means could have got.

There are many other examples like these across the web. A word of advice here would be to not deliberately try and connect a social campaign with your marketing strategy. People have a knack of kicking out the phoney. Afterall, jaagore and Tata Tea make sense together.

Social entrepreneurs today have powers like never before. They have a web at their feet which can spread their message like never before. An individual social change maker today has powers even greater than that possessed by Jesus Christ, Mohammad Prophet or Gautam Buddha. They were great men who had an extremely powerful idea. The only thing they did not have was a blog which could be followed by millions of people or a mail server which could send newsletters to huge mailing lists.