Presented by India Competitiveness Vs China Dr. Guy Rabbat

2 India needs manufacturing to compete for the local and in the global economies India must not cede the ground to China when it comes to manufacturing India must use its Information Technology strengths as a competitive advantage in manufacturing India must remove industry impediment to be competitive versus China

3 Summary India will do better by –Selecting the right product mix –Enabling information technology (IT) for data capturing and information flowing –Improving the quote hit rate –Improving the supply chain efficiency –Improving productivity with the use of IT tools and systems such as ERP

4 Requires 1.Product Selection Criteria 2.Data & Information Technology 3.Efficient Supply Quotation 4.Efficient Supply Chain Management 5.Productivity

5 Product Selection Criteria – Manufacturing Market Segmentation

6 Select a Product with low Cash Cycle - Convergence

7 Products Selection Criteria 1.Stay away from “me too” products with low margin and too much competition. 2.Target customers looking for high quality products at reasonable prices. 3.Avoid products which have long lead time components as far as possible to reduce inventory. 4.Tie up third party vendors with JIT capability to avoid large inventory stocking. 5.Look for additional revenue from customers who need post sales support at site. If it requires a large work force in the field, tie up a third party contractor for such services.

8 Data & Information Technology 1.India has a very high level IT talents compared to China. 2.But not effectively used for increasing / improving National Productivity. 3.In many situations lack of data and information hamper the decision making process 4.Indian Manufacturers lack the shop floor & management data / information and further analysis

9 Quotation Execution and Support The quote to order hit rate is very low Analysis process is missing Need for Rapid/ Fast/ Intelligent quote models

10 80% increase in RFQ volume every quarter in 2007 Year Q1 & Q Q3 Only RFQs RECEIVED6864 RFQs QUOTED / CLOSED6858 QUOTES IN PROGRESS6

11 Efficient SCM - Key Findings 1.Excel in SCM – Supply Chain Management – not just Procure, Stock, Manufacture and Sell but should be Efficient, Competitive and Productive 2.Vendors should lead by service in moderate-volume product segments, becoming true partners to their OEM customers. 3.Vendors that have significant exposure to high-volume/low- mix product segments should lead by design. 4.Vendors—and the industry as a whole—must dispose of excess capacity. 5.Implement operational improvements.

12 China manufacturing environment 1.China is practically now the factory of the world in high volume electronics and mechanical products with over 20,000 companies and 30 millions workers involved. It is a massive undertaking. 2. All these workers work “truly almost non-stop” and live on factory premises with 5-8 individuals per room in massive dormitories. 3.Total equality exists between women and men, workers and managers. 4.All are dressed the same and live together in these massive dormitories, where food and full accommodation are provided. 5.These workers are between 17 and 27 years old and are expected to work for an average of 7 years in 12-hours days.

13 1.The discipline is exceptional. For example, start time is punctually at 6:58am and precise repetitive conditions in thousands of stools, well designed by management breaks are 10 minutes in their individual locations. 2.Work is done is very for maximum efficiency and 3 shifts on 24/7 working environment. 3.China is covered by massive and extensive highways and construction is simply gigantic. 4.We must tap in that incredible energy and utilize it to our advantage. We should not limit ourselves by “buying our vendors”. China Manufacturing Environment

14 Summary India can do better by –Selecting the right product mix –Enabling IT for data capturing and information flowing –Improving the quote hit rate (SQM) –Improving the supply chain efficiency (SIVA) –Improving productivity with the use of IT (ERP)