The Indian manufacturing sector has come of age, with the country becoming a hub for production of various goods at cost-effective price points .jpg) For many years, India’s software and outsourcing industries have hogged the limelight by providing quality products and services. But with the Indian economy changing thick and fast, the manufacturing sector of the country has undergone rapid transformation. Owing to effort put in by private enterprises and support from the concerned authorities, India has emerged as one of the leading manufacturing hubs of the world. The evidence being that India is emerging as an important international market for the production of a variety of value-added goods. Many foreign firms are interested to establish their manufacturing base in the country because of reasons such as low manufacturing costs and easy availability of skilled labour, which bring down operational costs of these firms significantly.
In fact, it is now an established fact that India has some of the most sophisticated automated production lines in the world manufacturing all kinds of products from Tata Motors’ US$2,000 cars to state-of-the-art DVDs, mobile phones and pharmaceuticals. In addition to manufacturing, it is becoming an emerging base for sourcing components and assembling products.
However, India has to continuously strive to ensure that best practices filter through because skill disparity between those at the apex and those further down the manufacturing chain is still apparent.
Factors driving the growth of Indian manufacturing sector
There are several factors driving the growth of the Indian manufacturing sector. Some of the critical factors spurring the growth of the sector are:
· Change in production strategy: Earlier most Indian companies engaged in manufacturing focussed on the global audience and rolled out products according to their needs. However with passage of time, the need to develop products for the country was felt and today in order to cater to local market characteristics and needs, the manufacturing strategy focuses on rolling out products keeping in mind the requirements of domestic customers.
· Implementation of ERP system: Integrating suppliers into enterprise resource planning (ERP) system is a means to achieve potential improvements in partnerships with contracted suppliers. The introduction of standardised logistics and production processes at sites, supported by setting up an international team of experts, allow Indian manufacturing companies to make significant improvements to process costs and quality.
· R&D activities gaining momentum: There is a sizeable pool of talent in India that can contribute a great deal to the development of manufacturing through R&D as witnessed by the automotive industry. India is reputed for its mechanical design in R&D, and of course in the area of embedded software.
The electronics sector needs to be supported to improve R&D in order to become more competitive. R&D can be boosted through training, by introducing international best practices from around the world and with more overseas manufacturers setting up facilities in India.
But in addition to R&D, the supply chain has to be taken into consideration, which means strengthening the development of the chain in order to support manufacturing and R&D activities in the country. India is taking a long-term view by supporting local manufacturing and attracting international players, which bodes well for the future.
Sathyan Gopalan, managing director of Wincor Nixdorf India, a leading provider of IT solutions and services to retailers and retail banks headquartered in Paderborn, Germany |
