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editorial
manufacturing in India is on an upswing. this is a wel-come sign—after a muted year. sectors like capital
goods, consumer products and autos have registered strong sales numbers in the past few quarters—and many produc-tion facilities are running at full capacity to capitalize on the robust demand. the flurry of press releases in recent weeks announcing capacity expansions, new facilities and product launches reinforces the view that confidence in the economy is strong, and that producers are bullish about future prospects.
powering this positive sentiment is unabated consumer demand from small towns and rural areas. the aspirations and needs of the country’s vast hinterland are being increasingly shaped by televi-sion programming, and are supported by enhanced rural incomes. As consumers become better informed about choices, companies are scrambling to re-jig product offerings through re-design and re-engineering. this vast, emerging mar-ket has also created new profitable niches and opportunities for smaller companies—spawning new industrial activity.
the Government has also been invest-ing large sums of money to create and improve infrastructure, and has been opening hitherto closed sectors to private investment. the consequent accelera-tion of activity in areas like power plants, metro railways, highways, ports and civic
infrastructure has boosted the cement, steel, and the capital goods industries. It has also had a cascading positive impact on suppliers to these industries. With the economy predicted to maintain its pace, all these sectors are likely to do well—and this has spurred additional investments in capacity expansions and new facilities.
then there is the growing trend of foreign investment in manufacturing. overseas companies that were hitherto dealing in imported and traded products are setting up manufacturing and as-sembly plants to reduce costs, customize offerings and increase speed-to-market. other multinational companies are ex-panding capacities to service regional and international markets from India, or are moving production here to benefit from lower costs and enhanced engineering capabilities. this trend is bringing in new technologies, systems and processes into the country, and helping improve product quality and manufacturing skills. With the defence and aircraft purchase offset clauses set to kick in, the manufacturing sector will experience more activity.
this issue of Industry 2.0 magazine is a celebration of the revival in Indian manufacturing—and our effort to honour and recognize manufacturing organiza-tions that have demonstrated exceptional performance in the year gone by. And even while we recapitulate history, we believe that our top 500 will shine even brighter in the years to come.
reVIVAlCelebRatinG an industRial
www.industry20.com2 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
36
in c
onve
rsa
tion
VIJAY BABUCEOVORTEX ENGINEERING
JAYARAM PILLAIMANAGING DIRECTOR – INDIA RUSSIA & ARABIANATIONAL INSTRUMENTS
ROBINSON FERNANDEZSR. VICE PRESIDENT (APPLICATION)GEI INDUSTRIAL SYSTEMS
In our 8th annual ranking of the Top 500 companies in India, we present companies, both large and small, that have turned in an exceptional performance during the financial year 2009.
opinion08 2Dand3DLetusgettogetherThere is no need to take an either / or approach in the case of 2D and 3D—instead there is room for both.
event report10 TappingendlessopportunitiesPerformance Plastic Summit 2010—Trends and Advances in Performance Plastics, held in Mumbai recently, focused on key issues, new developments and processing requirements of the speciality plastics industry.
11 SolvingconstraintswithvaluechainplanningOracle in association with Industry 2.0
organised a series of multi-city events on value chain planning in New Delhi, Mumbai and Chennai.
12 DIESLChennaiAlthough the Indian logistics outsource market is expanding at the highest rate in Asia, the focus is still mostly on just cost reduction. 14 ChangingmanagementmindsetThe global community of Growth, Innovation and Leadership (GIL 2010), held in Bangalore recently, highlighted the need for transformation in the management mindset, to accelerate growth of the automation software market.
materials & processes20 MaximizingmachineshopproductivitySmall and medium businesses need to focus on three main factors to increase machine shop productivity—proactive maintenance, stremalined inventory management and high-performance lubricants.
information technology21 EnhancingsupplychainefficiencybyRFIDtechnologyImproving supply chain efficiency and escalating the speed at which goods move from the manufacturer to the consumer is more than a business mandate today; a subject of business survival.
management & strategy28 FivewaysCFOscanmakecostcutsstickAn insight into how to make costs cuts last as successes in cost cutting erode with time.
www.industry20.com 3 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
industry update
Gontermann-Peipers India has planned to extend its product portfolio with the launch of
6000 tpa value added castings project.The implementation involves an expen-diture of Rs 48 crore and would cater to sectors like mining, power, railway
and defence. The company has enough land bank at its existing plant at Pailan for the project, which is expected to be operational within 18 months.
This is in addition to the modern-ization/expansion undertaken by the company at an outlay of Rs 75 crore (approximately), which is expected to be completed shortly. This project is expected to increase the manufacturing
capacity from the current 15,300 MT to 21,000 MT. The company has also developed the high speed steel rolls, which acts as an import substitute.
Meanwhile, the company has en-tered into a Memorandum of Under-standing (MoU) with the Government
of Chhattisgarh to set up a pelletisation plant of 1.2 million tonnes per annum in Chhattisgarh. The capex for the expansion is to the tune of Rs 300 crore.
“Chhattisgarh in Central India is one of the favoured destinations for manufactur-ing companies in the country due to tremendous support from the government in devel-oping the industry. The MoU
will help us meet increased customer demands and deliver quality products,” said Lalit Poddar, Managing Director, Gontermann-Peipers India.
Established in 1966, Gontermann-Peipers (India), is an engineering company engaged in the manufacture of cast and forged rolls, a key consum-able of the hot rolled and cold rolled steel mills.
CSCMP Organizes Lecture On TOC
“First, know the goal of your business,” said Professor Ra-jiv Misra of XLRI, Jamshed-
pur, at a recent Council of Supply Chain Management Professionals (CSCMP) lecture series on ‘Theory of constraints,’ held in Mumbai.
He is an expert in Dr Goldratt’s Theory of Constraints (TOC) that was first put forward through his best seller book ‘The Goal’.
According to Professor Misra, or-ganizations in India have benefitted in executing repeatable tasks. However, he was clear that the benefits in complete-ly new projects have been limited.
Gontermann-Peipers Plans Expansion
BGR Energy Systems has entered into a joint venture (JV) agree-ment with Hitachi Limited Japan
and Hitachi Power Europe, Germany.The first joint venture with Hitachi
Limited, Japan is for the design, manu-facture, installation and commissioning of supercritical steam turbines and generators for thermal power plants while the second joint venture with Hitachi Power Europe, Germany is for supercritical steam generators for ther-mal power plants. With the establish-ment of these two ventures, BGR Energy is aiming to offer complete boiler and turbine-generator solutions to the Indian power industry.
The company has also set up a JV company, BGR Turbines Company, for this purpose, which will have its manufacturing facility in Tamil Nadu, involving an estimated investment of Rs 3,000 crores.
BGR Energy will hold 74 per cent stake in the joint venture while Hita-chi Limited will hold the remaining 26 per cent stake. The JV is expected to commence production in 2012 and will have a capacity of 3000 to 5000 MW per annum.
Hitachi Power Europe, Germany, a subsidiary of Hitachi Limited (Japan), designs and constructs fossil fuel-fired power plants.
BGR Energy Signs JV Agreement With Hitachi
Summit Highlights Container Scenario
The Supply Chain Leadership Council (SCLC) recently organised the first edition of ‘India Con-
tainer Logistics Summit’ in Mumbai. The event brought together fresh perspec-tives on the evolving container logistics landscape. Vishal Sharma, MD & CEO, Tuscan Ventures, likened the container to the personal computer in terms of its benefits to society suggesting that it’s containers that have helped the rise of Asia, especially China, the rise of America in being able to outsource production and reduce costs.
Manish Saigal, Executive Direction and National Industry Head – Transpor-tation & Logistics, KPMG, predicted the container traffic in India to double to 16 m TEUs within the next five years and quadruple to at least 30 m TEU within the next decade.
Saigal also released a paper com-prising recommendations of the private players in container logistics business to the Government of India. This paper was submitted to the Ministries of Shipping, Railways and the Planning Commission.
industry update
www.industry20.com4 september 2010 | Vol. ii | industry 2.0 - technology management for decision-makers
USA-based Heyl & Patterson (H&P) has signed an exclusive li-cense agreement with FLSmidth
India for supply of technology and design of wagon tipplers and side arm chargers to be manufactured in India for the Indian market.
As per the agreement, FLSmidth will be responsible for marketing, manufac-turing and delivery of the machines with H&P engineering and involvement from design through commissioning.
The agreement is expected to enable FLSmidth to continue to strengthen its global growth strategy in both the ce-
ment and minerals industries—initially on the Indian market, and to expand in the future to the Asia-Pacific and Europe-Middle Eastern markets.
With this agreement, H&P and FLSmidth will be able to supply the necessary technology for handling the latest requirements in railway wag-ons, which are planned by the Indian railways for their power, port and steel industries.
Founded in 1887 in Pittsburgh, Heyl & Patterson provides solutions for bulk material handling and thermal process-ing applications.
H&P Signs Agreement With FLSmidth
Companies seek consulting pro-curement in a very inconsistent and fragmented manner. This
ultimately results in value not being measured, budget overruns and poor project scoping. This was stated in a
recent study conducted by advisory from Orbys.
The results and analysis of the study were published in two related reports, viz., ‘Consulting Procurement: State of the Market’ and ‘Consulting Procure-ment Best Practice’, both published by Orbys’ parent company, Datamonitor.
The study revealed that available data were not being used to best effect
and diverse practices and non-standard processes were being implemented simultaneously.
The study also recommended key considerations for organizations plan-ning to develop best practices in con-
sulting procurement. The suggestions include selecting the optimum sourcing approach, defining the scope of the engagement to be delivered, enrolling and aligning stake-holders, selecting the right candidate consultancies, com-petitively tendering the engagement and executing the right
contract, being clear about what to buy and how to pay for it and managing the consultant and real-izing the value needed.
The survey conducted among senior managers in 250 global organizations also revealed that the use of market intelligence information to help inform selection and buying decisions is mainly ad hoc in nature and utilized inconsis-tently amongst organizations.
Study Focuses On Procurement Consulting
Allcargo Plans Mundra CFS Expansion
Allcargo Global Logistics is plan-ning to undertake upgradation of its Mundra Container Freight Sta-
tion (CFS) by doubling its export loaded volume. The CFS currently has the capac-ity of a single warehouse of 6,125 square metres (sq. mtrs) with 19,125 sq mtrs of paved yard.
With the commissioning of the second warehouse of 6,085 sq mtrs, the export handling capacity is expected to go up to 4,000 TEUs per month.
While, the total handling capacity is expected to rise to 7,700 TEUs per month. Currently, the total handling ca-pacity including export, import and empty handling capacity stands at 4,100 TEUs per month.
SBI To Invest In Power Project
State Bank of India (SBI) and Mac-quarie SBI Infrastructure Invest-ments will invest Rs 1,250 million
in Adhunik Metaliks’ power subsidiary Adhunik Power & Natural Resources. The investment is towards part financing the equity of Adhunik Metaliks’ ongoing 540 MW coal-based independent power project at Jamshedpur, Jharkhand.
The company has signed definitive agreements with Macquarie SBI and SBI for the same. The total project cost is estimated to be Rs 26,500 million and is being funded through a debt:equity mix of 3:1.
The debt requirement of Rs 19,870 million has been tied up with a consor-tium of commercial banks led by SBI, including institutions like LIC.
The investment by Macquarie and SBI is expected to meet the balance of the project’s total equity requirement of Rs 6,630 million.
Use of market intelligence in consultancy procurement.
industry update
www.industry20.com6 september 2010 | Vol. ii | industry 2.0 - technology management for decision-makers
Engineering company Greaves Cotton has decided to set up an automotive engine manufactur-
ing plant in Aurangabad with a total investment of about Rs 100 crore. The move is in response to meet the in-creasing demand of automotive engines.
The company has already made an initial investment of Rs 60 crore in the new unit. The plant, with a capacity to produce 80,000 engines annually, is expected to commence production
from the new plant by the end of 2011. Greaves Cotton currently enjoys more than 80 per cent market share in the single-cylinder diesel engine segment in India.
The company is aiming to leverage on the potential in the diesel-engine segment for three wheelers and also eyeing the opening up of the new market in the four-wheeled small com-mercial vehicles (SCV), which run on diesel engines.
Greaves Cotton Plans Engine Plant
SAIL Commissions Tension Levelling Line
Orient Ceramics and Industries Limited (OCIL) has announced its plans to invest Rs 100 crore in
expanding its manufacturing capacity.The company is eyeing green field
project and is also looking at a joint venture agreement.
The move is with an aim to meet in-creasing market demand and to achieve strong earnings growth supported by volume growth and focusing more on high margin product mix.
The company had recently set up an International Business Division (IBD) to
focus on exports. It presently exports to more than five countries including Dubai, Muscat, Oman, Sri Lanka, Mal-dives and Mauritius. OCIL makes various tiles for walls, floors and facades.
The company manufactures a wide range of non-vitrified, vitrified, ultra vitri-fied and third fired decorative tiles for walls, floors and facades.
It also imports and markets vitrified porcelain tiles, borders, motifs and other value added accessories from various countries to complement its wide range of tiles.
Orient Ceramics To Expand Capacity
ABB To Build Power Generator Factory
Power and automation technology group ABB recently inaugurated its fourth global wind power gen-
erator factory at Vadodara in Gujarat. The new factory will supply wind power generators and will produce up to 100 units per month with a rating of up to 2.5 megawatts.
Ulrich Spiesshofer, Head, Discrete Automation and Motion business, ABB, said, “Our wind power generators will serve the growing need for components in the wind power industry globally. We are proud to contribute to the generation of clean power that will help countries to meet their growing needs for electric-ity while reducing their emissions.” India is currently the world’s fifth-largest user of wind power and investments in this form of renewable energy are expected to grow in the years ahead.
Steel Exchange Sets Up New Plant
Steel Exchange India has set up an integrated steel plant at Sreeram-puram village, near Kothavalasa,
in Vizianagaram district, at an estimated cost of Rs 300 crore.
The company also recently acquired a sick unit, GSAL, for Rs 150 crore and invested an additional Rs 150 crore to set up an integrated steel plant.
A new rolling mill with a capacity of three lakh tonnes per annum of rebars and a steel melting shop with 2,50,000 TPA of billets, have also been set up on the same premises.
Besides, the company is also planning to set up a 60 MW power plant using the waste heat of the kilns and the coal char generated by the sponge iron unit.
The cost of the project is expected to be Rs 325 crore, of which, Rs 100 crore would be in the form of equity and the rest would comprise loans from banks.
Steel Authority of India Lim-ited (SAIL) has
commissioned a new 70,000 tonnes per an-num tension levelling line at its steel plant located in Salem.
The new line, installed at a cost of Rs 39.4 crore, is part of the plant’s moderni-sation and expansion plan. The levelling line has been supplied by Redex, France.
The levelling line offers a combina-tion of tensions and flexions under
controlled elonga-tion, which enables flatness of coils/strips by achieving homogenous lengths of internal fibres and removing internal strip tensions. The flatness achievable is 3i units.
The other major new facilities com-ing up at the Salem steel plant include
electric arc furnace, ladle furnace, AOD convertor, slab caster and a new sendzimir mill.
The new tension levelling line is part of the plant’s modernisation and expansion plan.
opinion
www.industry20.com8 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
Often in industry forums and customer meets a question pops up-‘Should we use 2D or
3D for our design workflow’. And every time we answer- ‘Yes we should use 2D & 3D; in fact both.” As indicated, both 2D and 3D technologies have an important role to play in product design and development. The goal is not to move from 2D to 3D, or to replace 2D with 3D—rather, it is to suc-cessfully blend 2D and 3D design and engineering processes.
The reason for this is simple. 2D is not going anywhere, and remains critical to manufacturing workflows. In fact, 75 per cent of manufacturers continue to use 2D as part of their daily workflows. A recent survey featured in Cada-lyst.com bears these numbers out. The author found that while manufacturing, MCAD, and con-sumer products firms have very high rates of 3D adoption, most continue to run a combination of 2D and 3D. For example, many of these firms use 3D design tools,
but rely on 2D for shop drawings or to collaborate with outside customers and vendors.
So, what is the best way for companies to incorporate 3D into their design processes with mini-mal disruption to what is already working? To a large degree, suc-cess is dependent on the type of software package deployed. The following are some best practices for providing a scalable, flexible path that allows 2D and 3D to exist side by side.
2D and 3D in the same box One of the main concerns compa-nies have regarding 3D is that it will cause a lot of downtime and that they will no longer be able to work on current projects that are based in a 2D environment.
The right solution bundles 2D and 3D design software together in a comprehensive offering. This allows users to leverage years of 2D design data and expertise, and be productive right from the get-go—and then, to incorporate 3D when it makes sense and the time is right. In this way, 2D users can continue to use the software they are comfortable with—as they learn the 3D software at their own pace. This saves countless hours of design and rework, and translates into time they can spend innovating rather than managing workflow issues.
Seamless interoperabilityCreating a hybrid work environ-ment of 2D plus 3D works best when users can seamlessly switch between the 2D and 3D tools.
Ideally, the 3D tool should provide direct read and write of native 2D files while maintaining full associativity to the 3D model. Any changes made to the model are reflected in the drawing, reducing the need for manual updates and ensuring that the 2D drawings are always kept in sync with the 3D design. Seamless interoper-ability also gives engineers the freedom, for example, to safely reuse valuable 2D files to build accurate 3D part models and then communicate insights gained from Digital Prototyping back to part-ners and suppliers that operate in a 2D environment.
Work in a widely accepted file formatCollaborating across an extended network of partners—as in the example above—is not nearly as easy when it requires the user to translate files back and forth from a proprietary file format. Picking a software package that utilizes the world’s most common file format automatically elimi-nates headaches such as having to maintain two separate sets of drawings and check them for errors after they have been con-verted using data-compromising translators. Instead, sharing a native file format between 2D and 3D enables engineering and manufacturing documenta-tion to be accurately generated directly from a validated 3D digi-tal prototype.
Jayant Keswani is Head Marketing, Au-
todesk, India & SAARC.
In the design world, users are often asked to choose between competing technologies. In the case of 2D and 3D, there is no need to take an ‘either/or’ approach—there is room for both. By following the best practices outlined in this article, users will be well on their way to creating an environment—in which both 2D and 3D together can provide value to the organization.
by jayant keswani
Let Us Get toGether2D anD 3D
► 75 per cent of manufacturers continue to use 2D as part of their daily workflows.
► Creating a hy-brid work environ-ment of 2D plus 3D works best when users can seamlessly switch between the 2D and 3D tools.
Key points
event report
www.industry20.com10 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
Today traditional materi-als such as metal and thermosets are being replaced by performance
plastics because of their lighter weight, design flexibility, ease of processing and the overall reduced lifetime cost.
According to Frost & Sullivan, the trend of replacing metal or other traditional materials is expected to drive the demand growth of performance plastics by 25 per cent by 2015.
“The Indian market for per-formance plastics is still a very small percentage of the global market,” said Mamta Wadhwa, Sr Director, Chemicals, Materials & Food Practice, Frost & Sulli-van, South Asia, Middle East and North Africa.
Wadhwa added that lack of product awareness, availability issues, high price, smaller base of end-user industries such as healthcare, are some of the
factors that have restricted the growth of this market.
The event covered various key topics like ‘New innovations in speciality plastic—an R&D per-spective’; ‘Ultrasim techniques’ and ‘Need and challenges of using performance plastics in the elec-tronics segment’, among others.
Dr Simon Ting, Market Development Manager, Arkema Shanghai Technical Polymers De-velopment Branch, spoke on the topic of ‘Metal replacement trend: A perspective’. Highlighting the benefits of plastics, Dr Ting said that high performance plastics has properties such as chemical and corrosion resistance, abra-sion properties and moreover it can be recycled easily. He pointed out that though metal has proper-ties such as high melting point, stiffness and safety factor, it has disadvantages too like high den-sity, high processing temperature and poor chemical resistance.
Vikas Bawa, Deputy General Manager, COE, Trim Engineering, Mahindra & Mahindra, Automo-tive Division, spoke on the topic, titled, ‘Auto OEM perspective on use of plastics for improved vehicle performance’. He focused on the journey of plastics in auto-mobile industry, origin of plastics and the current plastic usage.
“Today plastics represent an impressive 45 per cent of mate-rial volume and 8 per cent of ma-terial weight in today’s passenger vehicles,” Bawa said.
Dr Milind V Mhalgi, Senior Manager, Materials & Product Val-uation, Taco Group, spoke on the topic of ‘Necessity & advantages of using performance plastics in the automotive industry’. He noted that for every 10 per cent reduc-tion in weight of the total vehicle, fuel economy improves by 5-7 per cent and for every kilogram of ve-hicle weight reduction, there is a potential to reduce carbon dioxide emissions by 20 kilograms over the vehicle’s operating life.
S Krithikumar, Manager Sales, Engineering Plastics, BASF India, spoke on the topic of ‘Intel-ligent solution for electrical & electronic industries’.
The other eminent speakers during the event included Dominic Britto, Principal Consultant, Materials Practice, Frost & Sul-livan; Dr Sanjay Charati, Direc-tor—Technical, Solvay Specialties India; M S Saravanan, Market Development Manager, BASF; Prashant B Vairagi, Assistant General Manager, Plastics Technology Switchgear Design & Development Centre, Electrical & Electronics Business Group, Larsen & Toubro and D Madhu-sudhana Rao, Assistant Man-ager—New Product Development, Amara Raja Electronics.
Tapping Endless OpportunitiesFrost & Sullivan recently organised an executive MindXchange titled, ‘Performance Plastic Summit 2010—Trends and Advances in Performance Plastics’ in Mumbai. The event created a platform for end users to gain an understanding on key issues, new developments and processing requirements in the speciality plastics industry.
Market Development
Manager, Arkema
Shanghai Technical Polymers
Development Branch, speaks
on the metal replacement
trend.
Dr Simon Ting
www.industry20.com 11 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
As with the changing business scenario, better supply chain plan-ning and management
has turned out to be a competitive differentiator and margin driver, today the key to business success lies in how does a com-pany manage its supply chain. Again, the key to managing a supply chain is found in how it executes critical activities like demand management, Sales & Operations Planning (S&OP), and network optimization.
The dynamics of manufacturing and distribution has changed radi-cally in the past few years thanks to changing regulatory frame-works, liberalization, globalization and ubiquitous implementation of Web-based technologies and IT so-lutions. Local has become global. Push has become pull. Time has become Real Time. Monolithic enterprises have given way to extended supply chains, and the focus of senior manufacturing and supply chain executives has ex-panded beyond their own compa-nies to include suppliers, partners and, above all customers.
On the other end, customers—whether individuals or organiza-tions—now expect round-the-clock access to track and place orders, products and services to be available on demand, and even the ability to customize those products and services to specific needs or desires. Manufactur-ers are becoming more global in sourcing, delivery and produc-
tion. Supply chains are compet-ing against other supply chains, and only intense coordination can provide long-term competi-tive advantages. In fact, the real opportunities for many companies are in the linkages to suppliers and customers—and adding value, while squeezing out costs.
Value Chain Planning solutions enable companies to become more information-driven with best-in-class supply chain planning applications built around a core of optimization, sales and opera-tions planning, and performance management. It allows you to move beyond basic MRP to profit-ably balance supply and demand, optimize operations to minimize costs, and manage supply chain risk for resiliency and maximum performance in today’s rapidly changing global business condi-tions. It leverages global demand management to sense local demand volatility, and use these insights to improve business fore-casts and build a consensus plan that aligns sales, marketing, fi-nance and operations. With unique capabilities to shape demand, simulate alternative business scenarios and manage risk, Value Chain Planning provides the core of Integrated Business Planning to ensure operations are aligned to meet corporate financial goals.
In New Delhi, Virlav Bhatia, Vice President, Supply Chain Management, Reliance Retail, talked at length on the emerging issues in the field. Monesh Dange,
Partner, KPMG too put his views to field the questions from the audience. In Mumbai, Sanjeeva Prasad, Head of Supply Chain Consulting and Expertise Services, Dow Chemicals, delivered his speech on the present trends and needs in this field. Kanak Ghosh, Director, 9dot9 and Head of Logis-tics 2.0 magazine, too conveyed his perspective on contemporary trends in the field. In Chennai event, V Narasimhan, Executive Director, Brakes India, presented a critical analysis of the new con-straints in the supply chain man-agement. In all the events, Danny Smith, Global Solution Architect for Value Chain Planning with Oracle Corporation, who has been focused on using a combination of mathematics and technology to solve real-world business prob-lems for over 20 years, explained the audience how to improve key value chain processes includ-ing Sales & Operations Planning (S&OP), Network Optimisation and Risk Management.
Solving Constraints With Value Chain Planning Oracle in association with Industry 2.0 recently concluded its first series of multi-city events, titled ‘Value Chain Planning’. In this phase, the events were conducted in New Delhi, Mumbai and Chennai.
Danny Smith Global Solution Architect Value Chain Planning Oracle Corporation
event report
event report
www.industry20.com12 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
As a part of their multi-city series of events entitled ‘Captains of Logistics’, which kicked off from
Kolkata in July for evaluating the merits of logistics outsourcing, Industry 2.0 and Drive India Enter-prise Solutions Limited (DIESL), a Tata Group company, recently orga-nized a round table event in Chen-nai—the city with a long tradition of manufacturing and trade—and presently holding a huge impor-tance as an economic centre and distribution hub for the markets in South India. Today, Chennai has also emerged as an important gateway for export-import trade and a major hub for automotive and electronics manufacture.
DIESL runs around 175 ware-houses in the country, which is the largest in terms of number of ware-houses run by any single logistics service provider in India. The com-pany has around 4.3 million square feet of warehouse space, and in that respect it is the second largest LSP in India. In South India, it has a capacity of around 1.4 million square feet, and more than half a million of it is in Tamilnadu, mostly centering around Chennai.
The objective for the event was to create a platform for the senior executives and managers
who are responsible for organiz-ing and managing supply chain activities and logistics, so that they could deliberate and discuss the emerging trends and issues of logistics. Apart from the existing hassles of the logistics and supply chain industry, (say) related to the various regulatory barriers, efficient manpower development, reduction of capital and operating expenditures etc., today with the fast geographic and volume-wise expansion of the manufacturing companies, new constraints are coming up for the logistics manag-ers, particularly to maintain the customer service levels. In the words of Ajay Chopra, CEO, DIESL, “Although huge amount of good practices and knowledge is hover-ing around this industry, there is very little scope for all of us to sit together and share that knowledge. Thus, we thought of taking the initiative, to gather and channelize that knowledge.”
The Chennai event focused on the advantages of outsourcing the logistics activities to third par-ties offering integrated transport management and warehousing
solutions, which is the growing trend around the globe these days. It focused on the ways to reduce logistics cost, minimize assets, better order fulfillment, enhance level of customer service, shorten order cycles and mitigate risk.
In the event, Ajay explained how experienced logistics service providers can support a company to improve productivity by bringing in new technology and ensuring new height of customer service. In his presentation, he focused on the growing trends of accepting 3PL services worldwide, wherein it was found that the growth rate is high-est in the Asian market, as prob-ably the European and American markets have already witnessed the maximum growth.
One very interesting co-relation in Ajay’s presentation drew atten-tion of the audience. He pointed out, “Everywhere in the world wherever the logistics cost has come down, the outsource ratios have gone up. In the US where lo-gistics costs have come down to 8 to 9 per cent, the level of outsource to the organized players is as high as over 70 per cent.”
Outsourcing Need To Be Done To Add Value To The Logistics Process Although the Indian logistics outsource market is expanding at the highest rate in Asia, the focus is still mostly on just cost reduction. A radical shift in paradigm is necessary at this juncture, the primary target behind outsourcing has to be adding value to the process, and of course with that added value cost optimization is possible.
Ajay Chopra, CEO of DIESL, (Middle) stresses on the role of the organized LSPs in enhancing the productivity of a manufacturing organization.
event report
www.industry20.com14 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
The recent downturn in the global economy has heightened the need for gaining a competitive
edge in the manufacturing and process industries. The degree of automation is expected to play a key role in driving India’s position in the global manufac-turing industry.
Though India has gained substantially from enterprise solutions in various business processes, IT and software implementation in the manufac-turing sector, has been relatively low in comparison with their counterparts in the developed economies. Current adoption of automation systems have created disparate silos resulting in an inflexible supply chain and a lack of visibility. Lack of awareness of global automation technologies and trends in manufacturing IT has also contributed to the low adoption of next generation auto-mation solutions.
This was discussed at the re-cently held Frost & Sullivan’s GIL (The global community of Growth,
Innovation and Leadership) 2010 in Bangalore.
Key growth driverThe manufacturing sector has been a key growth driver of the Indian economy during the recent years. The contribution of manufacturing to the Indian GDP has been around 15 per cent in the past decade and is expected to touch around 25 per cent by 2020, when the country’s GDP is expected to reach $3 trillion from the present $1.2 trillion.
While Indian companies seek opportunities overseas and global manufacturers enter the Indian marketplace, manufacturers will need to sharpen their focus on delivering more value to their customers. Manufacturers are constantly seeking productivity enhancement tools to maintain sustainable competitive advan-tages. Supply chains need to be intelligent and interconnected for responding quickly to chang-ing market dynamics. Seamless integration of automation systems such as advanced pro-cess control, SCADA, DCS, MES and PLM with ERP and other business applications will enable greater visibility to the manage-ment and provide a competitive edge to the manufacturers.
Adoption of wireless technolo-gies and PC-based automation is also increasing among Indian manufacturers. This infusion of automation technology and solu-tions throughout the value chain is expected to enhance manufactur-ing efficiency and in turn drive the growth for PAM, MES, PLM and other automation applications.
Large investmentsLarge investments in both the process and discrete manufactur-ing industries will provide strong growth opportunities for the automation solutions and software market in India. Adoption of next generation automation solutions such as MES, Wireless, PLM and PC-based automation in India have been concentrated in high-end manufacturing sectors such as oil and gas, automotive and auto ancillary sectors. However, pharmaceuticals, food and bever-ages and consumer packaged goods industries are expected to contribute to the next generation solutions market. Due to greater adoption of automation products, the growth rate for products such as MES and PLM is expected to be in excess of 15 per cent CAGR over the next five years.
According to Frost & Sullivan, transformation in the manage-ment mindset regarding the ben-efits of automation among Indian manufacturers and increasing global manufacturing facilities is a necessity today to further drive the growth of the automation and related software market.
Frost & Sullivan, along with the members and partners and the Strategic Partnership Consortium—a comprehensive alliance of visionaries, innova-tors and leaders, are engaged in sharing, inspiring and creating a continuous flow of new ideas and fresh perspectives, which would leverage innovation as a resource to help shape a better future.
Member companies and orga-nizations include IFS, Liveper-son, BrighTalk, Lenos Software, Schneider Electric, SCIP (Society of Competitive Intelligence Profes-sionals), Underwriters Labora-tories, Intel, Bulldog Solutions, Eloqua and Global Spec.
Changing Management MindsetThe global community of Growth, Innovation and Leadership (GIL 2010) held in Bangalore recently, focused on the need for transformation in the management mindset, to accelerate growth of the automation software market.
Niju V Deputy Director,
Automation & Electronics,
Frost & Sullivan, is speaking at
F&S’s GIL 2010 in Bangalore.
www.industry20.com 15 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
What kind of growth is being witnessed in the Indian plant equipment manufacturing industry in these days?There is a phenomenal growth being witnessed in the power plant equipment manufacturing industry due to large number of projects being set up for power generation. This segment is growing at the rate of more than 35 per cent per annum presently. Other equip-ment for oil and gas industry is growing at the rate of 10 per cent per annum.
How is the industry gearing up to be globally competitive?Global competition for the process plant equipment is mainly from China, Korea and East European countries. Indian companies offer-ing technological products in the process equipment industry are able to offer globally competitive
prices for requirements generated from the East Asian and Middle East market.
What is your comment on the demand scenario both in domestic market and abroad?The demand for equipment for oil, gas and power equipment abroad is increasing and there is a good growth in demand for power plant equipment in India as well.
How much emphasis is being given on research and development (R&D) in this field?The present level of R&D effort in India for process equipment is way below the industry standard prevailing globally. Some of the equipment are based on design provided by the process licensor or engineering contractor, hence there is no much scope for devel-oping new design through R&D.
For other equipment—much more needs to be done on the R&D front to make the equipment globally competitive in terms of energy saving, capital cost, compact sizing and running cost.
Globally educational institutes play a vital role and contribute to the growth of the small and medium industries. China or for that matter even in advanced countries—plenty of research is being done by the institutes with Government industry sponsorship. These helps contrib-ute to develop innovative products, sometimes even replacing existing products, with similar design at competitive prices.
In India, there is an urgent need for educational institutes to interact with the industry and initiate the process of R&D. In our country students do not pursue doctorate degrees in a specialized field and this is a major impedi-ment in initiating the process of R&D measures. This also calls for immediate attention of both the Government and the industry to encourage main stream students to go for doctorate and absorb them for R&D activities.
“R&D measure is way below global industry level”
The process plant equipment industry is growing due to the increasing number of power plants coming up in India. Also, the competitive prices offered by Indian companies are helping the industry make a mark. However, it is the research and development efforts, which need more attention. Robinson Fernandez, Sr. Vice President (Application), GEI Industrial Systems, in an interview with P. K. Chatterjee, discusses the role of increased research and development measures for higher growth of this industry. Excerpts...
Robinson Fernandez Sr. Vice President (Application) GEI Industrial Systems
manufacturing technology
www.industry20.com16 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
manufacturing technoLogy
What is the role of National Instru-ments (NI) in spreading updated technologies across India? We are committed to constant innovation and continuous improve-ment. Sixteen per cent investment of annual revenue in research and development (R&D) is a testament to this commitment. As a result, we have always been ahead of the tech-nology curve and we will continue to introduce the next-generation test, control and design solutions to engineers and scientists.
We leverage the Commercial Off The Shelf Technology (COTS) and combine it with a powerful and flexible graphical program-ming environment like LabVIEW to create custom defined solutions to our customers. Our investments in multi-core processing, FPGA technology, wireless standards and evolution of LabVIEW as a uni-fied platform across the design, prototype and deployment life cycle
have been recognized and widely adopted across the globe.
NI has been in India for over 17 years now. In fact, India has been one of the fastest adopters of the next generation technology. From MNCs like Intel, GE to Indian organizations like HAL, BEL to SMEs—we have seen a very wide adoption of Virtual Instrumentation technology in India. Over 400 Indian engineering institutions have included Virtual Instrumenta-tion as a part of their curriculum. We are glad to see the local perti-nence and impact that NI has had in India.
What is the latest trend in technol-ogy absorption amongst the Indian manufacturers? The Indian market has increas-ingly become global and vast. The export market has bloomed due to the demand for global products and services. Globalization has made the Indian consumer very demand-ing as there is an increasing option of goods and services available for everything. At this juncture, the Indian manufacturers envision a great opportunity and also a chal-lenge. For the Indian companies to be competitive, they need to manufacture high quality products at an Indian price.
Thus, the Indian manufacturers are investing in the areas of test and automation by which they can reduce cost of the product, lower the time-to-market, ensure leaner manufacturing practices and conform to the quality standards. There is also a trend of increasing investments in R&D and IT frame-works for integrating manufactur-ing and CRM.
Engineers and scientists can rapidly and cost-effectively interface with
measurement and control hardware, analyze data, share results,
and distribute systems through intuitive graphical programming.
National Instruments India, alongside continuous innovations
in strengthening the power of the LabVIEW platform, has also
been instrumental in developing many Indian third party alliances,
solution partners, industry-academic collaborations, support structure and a strong Indian LabVIEW community.
Jayaram Pillai, Managing Director of the company for India, Russia, Arabia, in an exclusive interview
with P. K. Chatterjee, divulges his observations on the technology
absorption trend among the Indian manufacturers. Excerpts...
“Indian market has increasingly become global and vast”
www.industry20.com 17 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
How is NI increasing the competi-tive advantage for manufacturers, by offering solutions for green technologies?
Green engineering is the process of using hardware and software technologies to reduce our impact on the environment. Through real-world measurement data, we can gain a better understanding of how we are consuming resources and receive insight into ways of improv-ing efficiency, reducing waste and moving to cleaner alternatives.
NI enables green engineering by providing measurement, automa-tion and design tools that empower engineers and scientists to first quantify and understand real-world data and then correct problems for more environmentally friendly designs. This approach involves designing, developing and improv-ing products, technologies and processes to achieve environmental and economic benefits.
Engineers and scientists around the world are using the NI graphi-cal system design platform to make a positive impact on the global ecosystem. From the development of more energy-efficient systems to enhanced environmental monitor-ing and cleaner systems, many of today’s most pressing issues are being addressed with green engi-neering applications powered by NI products.
Do you offer complete solutions for product design, or is your support an additive to the design process?Competing in today’s global economy requires companies to rapidly enter the market with innovative products that offer increased functionality and operate flawlessly. The NI graphical system design approach, for test, con-trol and embedded design, meets this need by providing a unified platform for designing, prototyping and deploying applications. The NI platform empowers engineers to integrate real-world signals sooner
for earlier error detection, reuse code for maximum efficiency, ben-efit immediately from advances in computing technology and optimize system performance in a way that outpaces traditional design meth-odologies. The Graphical System Design approach enables the same platform to be extended across the entire product development life cycle—from design to deployment. This approach reduces the time-to-market, optimizes system scalabil-ity and provides increased perfor-mance at a much lower cost.
How do you deliver support to cus-tomers across the country? At NI India, we consider ourselves as trusted advisors who offer the best solutions to our clients to meet their individual system needs. The solutions extend throughout the ap-plication life cycle—from planning and development through deploy-ment and ongoing maintenance. We bring years of experience, commit-ment and support to every cus-tomer interaction across industries in India.
NI India professional solutions team is a group of highly qualified engineers who facilitate end-to-end solutions for the customer’s requirement. Our qualified technical consultants provide feasibility analysis and end-to-end consulting to suit the requirement. Our technical application engineer-ing team delivers proof of concepts, code reviews, etc., during the application development, and also provides post-sales support. The system engineering team recom-mends system architectures and builds technical proposals for any requirement. We have certified NI alliance partners across India who provide turnkey solutions for customers’ applications.
We also offer a wide range of local services like training and certification, calibration, start up assistance, factory installations and repair services.
www.industry20.com18 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
manufacturing technoLogyWhat kind of investment inter-est in technology are you finding among SMEs to enable them to be globally competitive? Although SMEs in India have always formed the backbone of the Indian economy and have been continuously growing in revenue and quantity, they have been traditional in their busi-ness approach. However, the SME sector is undergoing a total makeover. Unlike yesteryears, the Indian SMEs are now realizing the importance of investment in R&D and also the conforma-tion to quality and international
standards to gain global com-petitiveness. Globalization of the economy, access to technology practices and huge engineering pool in India are some of the key factors catalyzing the transforma-tion. The SMEs are more open to modernization of their practices and systems at a price that justi-fies the return on investment. However, access to technology at an affordable price still remains one of the genuine challenges for the SMEs in India. The organiza-tions need to realize the unique-ness of this sector and address their concerns.
What is your contribution to the growth and modernization of the Indian SMEs? Access to technology and afford-ability are key concerns among the Indian SMEs. They don’t need access to ‘strip down version of good technology’ at an affordable
price. They need access to ‘good technology’ at an affordable price. The SME sector in India is very diverse, and it is almost impos-sible to evolve a single program that suits all. As a technology leader, we realize the impact that our technology can have in their growth. The ‘NI SME Benefit Pro-gram’ a unique approach to help the SMEs in India to achieve eco-nomic prosperity through access to technology. This is a flexible pricing program, which gives the SMEs access to LabVIEW soft-ware and also builds competency with our world class training and support programs. Over 126 SMEs in India have already suc-cessfully availed this program.
What is new from NI for process automation in plants? For several decades, the main tasks for the control of industrial systems were reliable, discrete logic and straightforward analog I/O. In recent years, the complexity of devices and systems have significantly increased along with the requirements for per-formance measurements, signal processing, data logging and advanced control.
As control applications become sophisticated, we need higher-speed and higher-quality measurements. NI leverages the highly reliable and user program-
mable FPGA technology to create high performance real time control systems (NI CompactRIO PACs). Our continuous innova-tions on the LabVIEW platform enable us to implement custom control using graphical program-ming. NI PAC (Programmable Automation Controller) platforms optimize existing plants with precision measurement and advanced control thus increasing the throughput, system efficiency and yield.
How can your solutions assist in machine condition monitoring to ensure near-zero down times? NI’s hardware and software platforms are ideally suited for predictive condition monitoring. The high end processor technolo-gies enable real time monitoring and historical trending. We are also able to perform online analy-sis with algorithms developed in any programming environment. Open modular hardware plat-forms allow for future improve-ments to be easily implemented. This significantly helps decrease unscheduled outages and opti-mize machine performance while reducing maintenance and repair costs. NI’s condition monitoring systems have been deployed on a variety of turbines, compressors, generators and other industrial machines across India.
Indian manufacturers are investing in the areas of test and
automation to reduce cost of the products, lower the time-to-market and ensure leaner manufacturing practices.”
Ceat.................................................. BC
www.industry20.com20 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
In today’s increasingly competitive environment, maximizing productivity is a must, especially for small
and medium-sized machine shops. Typically, these businesses cannot match the overall produc-tion capabilities—in terms of volume—of their larger rivals. Furthermore, large competitors often have more equipment, more people and more resources as compared to small or medium sized businesses.
So, how can small and medium-sized businesses gain a competitive edge?
Proactive maintenance strategyOne of the most valuable things any company can do is to incorporate a proactive mainte-nance approach vs. a reactive maintenance platform. For many small companies specializing in machine shop applications, this maintenance mindset is essential.
The most essential and cost-ef-fective component of a successful proactive maintenance strategy is the implementation of a compre-hensive oil analysis method.
Oil analysis is a series of tests that help determine the condi-tion of internal hardware and in-service lubricants. With this information, you can extend the useful lives of both, identify early warning signs such as contami-nation and wear and minimize unscheduled maintenance.
Inventory managementAnother great way for small and medium-sized machine shop busi-nesses to maximize productivity is to maintain an efficient inventory management strategy.
When addressing inventory management, there are several factors you should consider. Per-haps the most important is rec-ognizing that inventory costs will include the initial purchase price of materials plus costs associated with handling and storage.
Other items to consider when developing an inventory manage-ment strategy include estimating the replenishment quantity and determining appropriate times to submit reorders.
A key component in determin-ing proper reorder quantity and timing is for the business owner or maintenance manager to accurately gauge how much avail-able space can be dedicated to storage. Typically, most machine shops owners do not want to utilize valuable space to store excess inventory.
Thus, a good best practice to follow is to work closely with your suppliers to develop an effective cycle fulfillment process, through
which, deliveries are received just as previous order supplies are about to be drained.
One common way for machine shop owners to efficiently utilize inventory space is to review the list of lubricant it is using. Lubri-cants take up a significant amount of storage area and, often times, the number of products can be consolidated to a lower number of high-performance lubricants.
Lubricant Whether your company special-izes in producing simple bolts, complex gear sets or high preci-sion valves, keeping your machin-ery running efficiently is the key to your profitability.
After all, in a machine tool, the active physical interrelationship taking place in the equipment requires that your lubricants work together effectively—your slide-way oil must work seamlessly with your choice of cutting fluids.
In a machine tool, mixing oil with the coolant is unavoidable.
Some way oils may not sepa-rate readily from the coolants and result in excessive ‘tramp oil.’ Excessive tramp oil will compro-mise the effectiveness of the met-al working fluid by shortening the effective life and altering cutting performance. Excessive tramp oil can also lead to bacterial growth in water soluble coolants result-ing in foul odour, short coolant life and potential employee health and safety concerns.
To avoid these issues and help ensure that your equipment runs smoothly over the long haul, choose a high performance lubri-cant that is specifically designed to deliver excellent frictional properties and coolant compat-ibility, across a range of way and slide applications.
Glen Sharkowicz is the Global Industrial
Products Offer Advisor at Mobil Industrial
Lubricants.
Maximizing Machine Shop ProductivityThe small and medium businesses can survive in the intense competitive market by implementing three key factors, viz., proactive maintenance, streamlined inventory management and high-performance lubricants.
by glen sharkowicz
Oil analysis is a series of
tests that help determine
the condition of internal
hardware and in-service
lubricants.
www.industry20.com 21 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
Radio Frequency Iden-tification (RFID) is a true next-generation technology. Though it is
relatively young; around 400-500 companies across the world are involved in its deployment and are pioneering this innovative phase of development.
The three important elements of RFID systems are tags, readers and the software, which process the data. Tags are generally attached to products or goods, as a component of an adhesive barcode label or can be attached in more durable enclosures or incorporated in ID cards or wristbands. The RFID readers are generally standalone units placed in strategic locations, such that the goods or conveyor lines or anything carrying the RFID tag is routed through these locations. The readers are either integrated with a computer to which the data is transmitted, or connected to a barcode printer.
A radio signal is sent by the reader that is received by all tags present within the range that are tuned to the RF field frequency. The signal from the reader is received by the tags through their antennas and they respond by transmitting back the data stored in them. RFID tags are capable of holding multiple types of data; these include activity history (for example, when the tag passed
a specific location, the previ-ous scanning date, etc.), serial number, temperature, count, and other inputs made available by sensors. The reader receives the signal through its antenna and transfers the data to the com-puter system.
Advantages over barcodesThough barcodes are capable of supporting automated data cap-
Pictu
re C
ourte
sy: www.photos.com
Improving supply chain efficiency and escalating the speed at which goods move from the manufacturer to the consumer is more than a business mandate today; a subject of business survival.
By RFID TeChnology
Enhancing Supply chain EfficiEncy
information technology
www.industry20.com22 september 2010 | Vol. ii | industry 2.0 - technology management for decision-makers
information technologyture, RFID technology does offer significant advantages over them.
Some of the advantages of-fered by RFID technology are as follows:• Through RFID technology it is possible to have item-level vis-ibility as the RFID tags can hold more data, whereas barcodes can only facilitate object level identification.• Expanded reading range is a distinct feature of RFID, which supports quicker reading and faster processing. It also facili-tates rapid product movement (as a result, these can be installed on fast moving conveyors).• Continuous data reading and writing and other activities like
changing, adding, and deleting information on tags are possible with RFID technology.• Unlike barcodes, RFID need not be in direct line-of-sight of the readers resulting in reduced manual handling in the reading process. • Additionally, readability of RFID tags is much better in ad-verse conditions such as exposure to dirt and outdoors.
Despite the above benefits, RFID is not likely to force bar-codes into extinction in the near future. Barcodes are very com-monly used in the retail industry, warehousing and logistics, and in the manufacturing domain. Barcodes are likely to continue
to be an integral part of the data capturing process, especially as RFID is still a big investment for small to midsize companies.
RFID in manufacturing sectorManufacturing processes can find solutions for many day-to-day problems through RFID imple-mentation:• RFID tags can be used to track work in process (WIP) through-out the production process and critical data such as instructions, parameters, procedures, and monitoring information can be fed into the tags. This helps in reducing the number of errors and ensures correct components being made available in an as-sembly line.• RFID tags can also be used to track workflow, waiting and pro-cessing times of every individual product. It increases visibility across the manufacturing stages through easy identification of time and stage of product.• RFID can also be tagged for physical tracking to enhance security during material move-ment within the plant. It also al-lows users to measure utilization of assets.
The above advantages enable exertion of greater control on the production process and reduce production disruptions and re-scheduling.
Quality control and regulationCompanies can track the quality of products using RFID technol-ogy within their manufacturing facilities and beyond as goods move along the supply chain.
RFID can be used for real-time monitoring of quality parameters, thus minimizing the probabil-ity of delivery of poor quality products as well as drastically cutting down on the time spent in inspection and rework. Things like atmospheric conditions, tem-
perature, and molecular activity such as bacteria levels can be monitored at every stage of the supply chain.
For example, an RFID temper-ature logger can operate in tem-peratures from -40°C to 85°C and it has a battery life of 6 years. The temperature measurements can be very accurate and within a range of ± 0.25°C and these tags can store more than 12,000 read-ings. Complete product history from source to destination can be captured even when shipments are in transportation for numer-ous weeks.
These features of RFID make modern supply chains capable of tracking the product quality as products are shipped across different continents, during which they are exposed to different envi-ronmental stress.
Operations and securityRFID tags can be very effective in enhancing operational ef-fectiveness in areas such as dispatches and improving product security throughout the supply chain. Listed below are some of the ways in which RFID can help companies to enhance their operations and security:• Movement of trucks coming for loading and unloading of materi-als can be tracked through RFID. RFID tags can be placed in the trucks, and readers can be lo-cated at key positions such as en-try and exit gates through which incoming and outgoing informa-tion can be tracked in real time. This would enable improvements in truck turnover time; incoming truck drivers can be guided to the appropriate unloading bay, thus facilitating faster unloading and better utilization of assets.• Product shrinkage is one of the major problems that most global supply chains face. Billions of money are lost due to product shrinkage across the world each
RfiD tags can be very effective in
enhancing operational effectiveness in areas
such as dispatches and improving product
security throughout the supply chain.
www.industry20.com24 september 2010 | Vol. ii | industry 2.0 - technology management for decision-makers
information technology
year. Most of these losses are at intermediate stages of supply chain where they are out of manu-facturers’ control. RFID technol-ogy can be used to get real-time input of the product quantity throughout the supply chain net-work. Based on this information, the organization can take anti-theft measures to prevent future occurrences. RFID can also be a very effective anti-theft solution for retail outlets, supermarkets, and distribution centres.
Inventory managementInventory management can be improved in many ways through implementation of RFID technol-ogy. RFID can aid in tracking the exact level of inventory, param-eters like inventory life, age, First In First Out (FIFO), etc. RFID of-fers the following advantages for better inventory management:• Physical accounting of inven-tory is a time consuming process and often forces stores to close for a few hours, item-level track-ing can enable retail stores and supermarkets to account physi-cal inventories in a fraction of the time that it takes for physical accounting as a result of which retailers can take inventory counts more frequently. Item-level tracking can be used to harness
a whole range of opportuni-ties—it can provide very accurate data of sales and prevent thefts; also, smart shelves with in-built RFID scanners can automatically monitor increase and decrease in stock levels. It also enables track-ing of critical product details like expiry date and type of inventory, which can improve inventory management systems.• RFID-enabled tracking systems can be synchronized to various inventory and warehouse warehouse management systems, which can drastically improve the visibility of inventory and keep track of inventory at all locations of large warehouses, thus reduc-ing wastage and excess inventory.• RFID tracking can also be used for a wide range of activi-ties such as monitoring product parameters like temperature of storage, humidity in the storage area, age of stock, etc.
Logistics and distributionLogistics is one area where RFID technology can impact systems and process in more ways than in any other sector:• Shipping and logistics orga-nizations can track important assets precisely using RFID. Additionally, RFID could help in tracking a container’s history through all the information that has been stored in the tag.• Shipping companies can use RFID to automate and monitor the loading process and optimize uti-lization of docks and trucks. The shipment identification number can be generated, which can then be stored and tracked through RFID for customer tracking.• Container-level RFID track-ing enables both shipper and customers to maintain visibility throughout the transportation process and can generate alerts of delayed shipments. This kind of detailed shipment tracking data facilitates measurement of true
transit lead times; the same could be reduced on further analysis of this information.• RFID can automate outbound shipments and all the shipping data can be verified through RFID readers before the shipment is moved. This can considerably decrease errors in the process of picking: the inventory data gets updated as each package is read. Automation through RFID can re-duce labour costs throughout the supply chain. Labour cost is one of the major elements for a typi-cal distribution centre, account-ing for almost 40 to 60 per cent of the total distribution costs. According to some researchers, there is a portential of reducing labour cost up to 30 per cent in the order picking process and more than 80 per cent in inspec-tion costs for shipping processes.
ConclusionRFID is moving through a rapid adoption phase and gaining mo-mentum. Some of the major factors that are expected to force faster RFID adoption by compa-nies are likely to be:• Major companies in the retail, manufacturing, and logistics sec-tors are either in the process or have plans of implementing RFID, which demands their business partners and associated organi-zations also develop and deploy RFID applications and solutions.• The emergence of new powerful global standards for RFID offers significant performance benefits, easy scalability, and a clear de-ployment roadmap. RFID imple-mentation has become easier.• Unlike in the past, the benefits and return-on-investment on RFID implementation has been proven by many organizations through numerous pilot projects and early deployments.
Source: Manufacturing and Process Con-
sulting Practice, Frost & Sullivan
Major compa-nies in the retail,
manufacturing, and logistics
sectors are either in the
process or have plans of imple-menting RFID.
Pict
ure
Cour
tesy
: www.photos.com
www.industry20.com26 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
management & strategy
How are you feeling after WEF announced Vortex Engineering as one of the 31 Technology Pioneers of 2011?We are feeling very elated at this recognition for Indian innovation at a global level. As the company which pioneered the concept of a rural ATM and also its application in social payments, we believe this award at a global stage further extends its ap-plicability across countries.
Could you explain the innovation (s) in brief that has (have) fetched Vor-tex this international recognition?Vortex Gramateller ATMs. These are indigenously designed low cost
low power biometric ATMs (Auto-mated Teller Machines), specifically designed for banking & financial re-quirements of Indian rural and semi urban market. The unique patented technology used in our ATMs has been developed to help banks reach out to rural areas and financial inclu-sion of unbanked population.
These ATMs consume very little power (1/10th of conventional ATMs), have the total cost of owner-ship at 25 per cent of conventional machines, and have features very specific to the rural or semi urban segments of developing countries.
Usage of Gramateller ATMs could reduce CO
2 emissions by about
“We have the right talent and abilities to pioneer…”The World Economic Forum (WEF) has selected 31 companies from 13 countries as Technology Pioneers 2011, who will be presented with official recognition in Tianjin, People’s Republic of China, between 13 to 15th September 2010. A committee comprising 68 leading academics, journalists, technologists and venture capitalists from all parts of the world evaluated the visionary companies in the fields of clean tech, health and information technologies/new media. Growing concern over the environment reflected in all-time high of companies selected in the clean tech category. Chennai-based Indian company Vortex Engineering is one of the recipients of this prestigious recognition. In an exclusive interview, Vijay Babu, CEO, Vortex Engineering, talks to P. K. Chatterjee, on their innovations in reaching Automated Teller Machines to rural users. Excerpts…
www.industry20.com 27 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
18,500 kg/year, making it one of the most eco-friendly ATMs.
Vortex has ATM solutions for both types of banks that use Core Banking Software (CBS) or Total Branch Automation (TBA) software.
What kind of difference in needs for solutions do you find between rural or semi-urban areas and the cities?Nowadays, most banks are on the path to move to Core Banking System. Even those banks, which still run on TBA or are waiting for the migration to CBS, can extend their banking services through ATMs. The ATMs will continue to work without any changes in hardware even after the migration has taken place, thus ensuring that the investments made by the banks are safe.
In terms of needs in rural and semi urban areas, they are very different from those in the cit-ies – in cities, air-conditioning is taken for granted. In rural, where power itself is a major concern, air conditioning is not as critical as getting the machines to work for as much time as possible. Besides, getting fresh crisp notes or the ‘ATM grade’ notes is not difficult in cities, whereas, in rural, these are not available. So, a machine which can reliably dispense teller grade notes, and which comes with built in power back up and works on al-ternative power sources—like solar power—becomes key to success.
What type of solutions are you of-fering to reach seamless banking facility to semi-urban and rural India?In addition to ATMs, the smaller co-operative banks and the regional rural banks need other items like an ATM switch software to make the ATMs live. Convention-al ATM switches are usually priced beyond the reach for small scale deployments. Vortex has partnered
with a few ATM switch vendors—to offer a cost effective scalable solution so that even rolling out a few ATMs becomes commercially viable. These partnerships also cover other related software like ATM Card Management system and also the supply of ATM cards.
What is Vortex’s contribution in sorting out the challenges in wage disbursal under National Rural Em-ployment Guarantee Act (NREGA)?The Gramateller ATMs offer a very cost effective method for last mile delivery of the NREGA wages. These ATMs use biometric authentication instead of PIN, so that only the intended recipient is allowed to withdraw the amount. All transactions are electronic with almost no human interven-tion. Since crediting of the wages into the accounts does not take much time, the delays in disbursal is greatly reduced. Additionally, because of greater availability of the ATMs beyond banking/office hours, the beneficiaries do not end up losing a day’s work in collecting the wages.
What are the variant factors that drove the design of these ATMs? The industrial design of the ATM was done keeping in mind the fact that the users in rural areas do not feel intimidated by a sophisti-cated look. These machines comply with all international security standards. The use of fingerprints for identification as an option in addition to PIN ensures that lesser literate users are also comfortable in using them.
What are you exactly doing to reduce the energy consumption in ATM machines as well as ATM centres?Already we have done a lot of R&D (Research & Development) efforts on the power consumption of these ATMs. The machines consume very little power (less than 100 W—as
low as two light bulbs), and also help further save power by not re-quiring air conditioning. These ma-chines can also be viably powered by solar energy, thus providing greater availability in areas having severe power shortages.
How are you managing to lower the product cost to be competitive globally?The core parts of the machines (mainly the Cash Dispensing Mod-ules) are designed in house, giving us a lot of edge as one of the few ATM manufacturers in the entire world making the ATM end to end.
What is your advice to Indian manufacturers in general?That something has not yet been done so far in the West is no rea-son behind not to attempt the same in India. In India, we have the right talent and abilities to pioneer, and the Indian requirements themselves offer a lot of market potential.
We hope for and look forward to a
future where the benefits of technology for society become increasingly accessible to all geographies and larger chunks of the world population.”ANdRé SCHNEIdER COO & MD Of WEf
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www.industry20.com28 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
management & strategy
Optimism is on the rise that a solid economic recovery is taking hold around the world,
but the cost cutting so prevalent during the recent recession looks to remain a strategic priority for some time. Indeed, the number of executives reporting steps to reduce operating costs in the next 12 months increased significantly between February and April, even as confidence in the economy grew. Yet any successes compa-nies have at cutting costs during the downturn will erode with time. Many executives expect
some proportion of the costs cut during the recent recession to return within 12 to 18 months—and prior research found that only 10 per cent of cost reduction programs show sustained results three years later.
On either schedule, any programs initiated in the early months of the downturn are already beginning to fail—just as savings would be most useful to finance growth. Sales, general, and administrative (SG&A) costs prove to be particularly intran-sigent. While manufacturing efficiencies have enabled an aver-
age S&P 500 company to reduce the cost of goods sold (COGS) by about 250 basis points over the past decade, SG&A costs have remained at about the same level.
Why is it so difficult to make cost cuts stick? In most cases, it’s because reduction programs don’t address the true drivers of costs or are simply too difficult to main-tain over time. Sometimes, man-agers lack deep enough insight into their own operations to set useful cost reduction targets. In the midst of a crisis, they look for easily available benchmarks, such as what similar companies have
Successes in cost cutting erode with time. Here’s how to make them last.
by ankur agrawal, olivia nottebohm & andy west
can make cost cuts stickCFOsFive ways
www.industry20.com 29 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
accomplished, rather than taking the time to conduct a bottom-up examination of which costs can—and should—be cut. In other cas-es, individual business unit heads try to meet targets with draconian measures that are unrealistic over the long term, such as across-the-board cuts that don’t differentiate between those that add value or destroy it. In still others, manag-ers use inaccurate or incomplete data to track costs, thus miss-ing important opportunities and confounding efforts to ensure accountability.
While there’s no single silver bullet to ensure that cost-man-agement programs will stick,
large, multibusiness unit organi-zations can better their chances by improving accountability, focusing on how they cut costs, drawing an explicit connection to strategy, and treating cost reduc-tions as an ongoing exercise.
Assigning accountability Few would dispute that the sup-port of top executives is neces-sary for cost-management efforts to succeed. Involved CEOs and CFOs, in particular, can help mediate the inherently political nature of such exercises and pro-vide critical energy and motiva-
tion. Yet in our experience, the involvement of top managers is not by itself sufficient—especially in a period of growth, when they naturally turn their attention to other initiatives.
Instead, most cost innova-tion happens at a very small and practical level. Breaking costs out in this way helps manag-ers find the specific groups or individuals responsible for them and to identify and swiftly deal with pockets of expense mis-management. Take, for example, the cost-cutting program at one multinational high-tech company. Initially, the CFO had little actionable information on
who was responsible for which costs. Profit-and-loss (P&L) statements were reported only for product-based business units, even though geographic sales units had higher costs. This lack of detail made it very difficult assigning responsibil-ity for overall cost reductions. For instance, if freight costs for a business unit increased from year to year, it was difficult to determine whether this happened because of shipping behaviour by factories or costs incurred by the sales organization in delivering third-party parts to customers.
To resolve these issues, the company redefined the way it col-lected and reported information, to ensure that costs were broken out for each of 100 organizational units. That helped managers quickly identify two headquarters units and a sales organization that were responsible for large cost increases. Together, the managers came up with a plan to control future costs. Among other things, the plan assigned cost accountability to the company’s more than 60 separate organi-zational units. This approach ensured that the people managing costs were those closest to the decisions, who could ensure that
cost management was not hurting the business.
Importantly, the process plan-ners who run such programs as Six Sigma improvement efforts generally make the wrong choice to manage cost-cutting programs. Typically, they lack both the con-tent expertise and the authority to make difficult trade-offs in areas that often require more detailed knowledge of where costs occur and the ability to make keen sub-jective judgements about which costs to cut. Only someone at the level of, say, a sales manager has the detailed knowledge and
Intransigent costsMedian cost of goods sold (COGS) and sales, general, and administrative (SG&A) costs for S&P 500 companies,1 % of revenue.
1s&P 500 index as of 2008; sG&a includes R&D expenses.
www.industry20.com32 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
management & strategyauthority to decide whether it’s really necessary to travel to one client meeting in person, while conducting another by vid-eoconference.
Such informed cuts are more likely to endure because the people responsible for them can be held accountable through appropriate incentives, such as performance evaluations, that consider both costs and business performance.
Focus on how to cut, not just how muchCost reduction programs often lose effectiveness over time be-cause top management kicks off the effort with broad cost reduc-tion targets (“How much do we want to save?”) but then leaves decisions on how to meet those targets to individual line manag-ers. The presumption is that they have a more detailed under-standing of their particular area of the business and will take the right actions to control costs. While this is true in some instances, we have seen too many cases where managing to a number has resulted in flawed decisions, such as delaying criti-cal investments, shifting costs from one accounting category to another, or even cutting costs in a way that directly undermines revenue generation. Clearly, the benefits of such cost cuts are likely to be illusory, short lived, and at times damaging to long-term value creation.
A more enduring approach includes changing the way people think about costs by, for example, setting new policies and pro-cedures and then modeling the desired behaviour. If a company announces, say, a new travel policy, senior managers need to set the tone with their own actions—for example, by aggres-sively using videoconferences instead of travel or eliminating
catering for in-person meetings. Even something as simple as no longer providing sandwiches for lunch meetings can be part of a pattern of behaviour that signals real and enduring change. And since backpedaling on this kind of behaviour when the economy picks up again would send the reverse message, managers should model only cost cuts they intend to stick with. If they know they’ll eventually restore catering for in-person meetings, it could well be better not to cut it in the first place.
Benchmarks matter. External ones on some measures may be difficult to get, but where they are available—for example, on travel expenses—they can enable managers to compare perfor-mance across different units and identify real differences, as well as trade-offs that may not be in line with the organization’s overall strategy. Internal bench-marks are easier to access and provide great insights, especially because managers are more likely to understand and adjust for dif-ferences among their company’s organizational units than among different companies represented by external benchmarks.
One multinational capital goods manufacturer combined the two perspectives, analyzing the major categories of expenditure and developing targets based on both internal and external benchmarks. Using external ones for travel spending, managers found that the company’s travel costs were higher than those of any peer—both per employee and as a percentage of revenue. They then set an aggressive target to reduce travel expenses—and, to make the effort stick, instituted new travel policies on booking hotels and airfares. By examin-ing internal benchmarks across suborganizations (such as departments, business units, or
locations), managers also identi-fied which executives needed to better educate their organiza-tions on travel policy. In addition, they increased accountability by tracking each unit’s performance on a monthly basis to measure compliance and encouraged underperforming divisions to manage their travel costs more aggressively. The effort changed travel behaviour across the entire organization as subunits shared best practices.
Don’t let P&L accounting data get in the way of cost reductionCFOs often manage cost reduc-tion efforts by tracking account-ing data in their companies’ P&L statements. These can be a useful starting point in a crisis, if other data are unavailable. But over the long term, P&L categories, such as overall SG&A costs, don’t give the kind of per-unit insights that help focus cuts in, say, travel ex-penses on the units that can best afford to cut them.
Unfortunately, few compa-nies have the kinds of systems they need to track costs at a fine-grained level—and they face a number of challenges in establishing them. Multiple data systems may make it difficult to aggregate and compare data from different geographies. Inconsistent accounting prac-tices between businesses or time periods may lead to significant distortions. Changes in organi-zational structure (as a result of acquisitions, divestitures, or even changes in the allocation of overhead costs) may similarly distort tracking. Finally, one-time expenses in either the baseline or the tracking period may become excuses for deviations from the plan. As a result, business or functional managers often use data issues to divert attention from their lack of progress.
►Multibusiness unit organizations can better their chances by im-proving account-ability, focusing on how they cut costs, drawing an explicit connec-tion to strategy, and treating cost reductions as an ongoing exercise.
►Internal bench-marks are easier to access and provide great in-sights, especially because manag-ers are more likely to understand and adjust for dif-ferences among their company’s organizational units.
Key Points
www.industry20.com 33 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
Indeed, one medical-product company experienced all these is-sues simultaneously in the initial stages of its cost transformation program. Business unit heads ob-jected that tracking numbers from the central financial database were flawed because of a range of factors. As a result, the company couldn’t reduce costs during the first several months of its program, and discussions focused on the integrity of the data rather than potential initiatives.
To resolve the problem, com-panies must continuously track, in some detail, the expenses behind the P&L to identify areas of underperformance, without worrying about the formal ac-counting of the costs. Identifying, measuring, and controlling their most important drivers is more important than how the savings
are booked and reported. To man-age costs at the necessary level of detail, the CFO of the company above gave each business unit head and controller full access to a centralized cost database linked to the official P&L.
Each controller received a standardized template to re-cord any adjustments affecting the baseline, along with exact amounts, periods, and offset-ting adjustments. The CFO then aggregated the data into a simple cost-tracking report that he shared with all involved.
After two months, the in-creased transparency eliminated all data disputes—and the orga-nization met its full-year cost re-duction target in just six months. Two by-products were increased standardization of internal ac-counting and a dramatic reduc-
tion in several cost categories bucketed under “other costs.” By getting the data right and moving quickly beyond questions about data integrity, the organization significantly simplified the effort of cost reporting, making it much easier to maintain the cost pro-gram over time.
Clearly articulate the link between cost management and strategyStrategy must lead cost-cutting efforts, not vice versa. The goal cannot be merely to meet a bottom-line target. Indeed, among participants in a November 2009 survey, those who worked for companies that took an across-the-board approach to cost cut-ting in the recent downturn doubt that the cuts are sustainable. Those who predicted that the cuts
Benchmarking costsFor a multinational capital goods manufacturer
www.industry20.com34 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
management & strategy
►Strategy must lead cost-cutting efforts, not vice versa.
►To create value through cost cutting, managers need to understand the best ways to allocate operating expenses, such as selling costs and R&D.
►Mapping costs against business units and geogra-phies will reveal both opportunities for cost reductions and areas in which the business should increase its investments.
could be sustained over the next 18 months were more likely to say that their companies chose a targeted approach.
Yet in our observation, many companies do not explicitly link cost reduction initiatives to broader strategic plans. As a re-sult, reduction targets are set so that each business unit does “its fair share”—which starves high-performing units of the resources needed for valuable growth investments while generating only meagre improvements at poorly performing units. Moreover, ini-tiatives in one area of a business often have unintended negative consequences for the company as a whole. For example, a global low-tech medical-device compa-ny’s initiatives to reduce manufac-turing and product costs were led at the plant level, without input or customer insights from sales and marketing teams.
The leaders of the cost-cutting effort in manufacturing nearly rendered several products defective because they did not know how customers used the products. Consequently, the effort led to the loss of accounts and market share.
To create value through cost cutting, managers need to understand the best ways to al-locate operating expenses, such as selling costs and R&D. To do so, they must understand, at the most detailed possible level, the return on invested capital (ROIC) and the growth of the markets in which a company plays. Map-ping costs against business units and geographies will reveal both opportunities for cost reductions and areas in which the business should increase its investments to take advantage of growth op-portunities or to “double down” in high-ROIC businesses. At a high-tech company, for example, the granular mapping of R&D spending by product families
identified some that despite their ageing technological and growth profiles were still receiving R&D and marketing investments.
Clearly, these low-ROIC busi-nesses did not warrant a high level of new resources.
Management could redirect them to growth units because it was able to map costs at a very granular level.
With such insights, manag-ers will also be able to deliver a consistent message on how cost reductions would make a compa-ny stronger—a message reducing short-term resistance and even inspiring the organization to sup-port the effort. Moreover, once these practices are baked into the company’s standard operat-ing practices, cost reductions will become a more enduring part of its strategy for long-term health.
Treat cost management as an ongoing exerciseMost companies treat cost man-agement as a one-off exercise driven by the need to manage short-term profit targets—and some of these exercises do succeed in the short term be-cause of constant pressure from the CEO or CFO. Yet such hasty cost-cutting activity typi-cally goes into reverse once the pressure is removed and rarely results in sustainable changes in cost structure. In our experi-ence, the reason is that one-off exercises don’t require internal capability building.
A better approach is to use the initial cost reduction program as an opportunity to build a compe-tency in cost management rather than in mere cost reduction. Cost-management programs need to be scoped as two- to three-year initiatives rather than as imme-diate-term efforts with one-year horizons. Also, effective cost-management programs, by their very nature, include plans for
dealing with changing business conditions—for instance, by ad-justing for activity-level changes, competitive drivers, or both.
In the case of the multinational manufacturing company, many of the processes introduced as part of the cost reduction initiative became the basis for ongoing cost management. The finance and accounting group created a system for monitoring costs at a detailed and accurate level, where none had existed before. Manag-ers encouraged greater com-munication between finance and accounting, the business units, and functional groups such as IT. Better communication uncovered inconsistencies in accounting practices. Changes in perfor-mance-management systems and incentives further promoted the cost-management approach. Purchasing managers found clear areas of waste that could be sus-tainably removed from the cost base. Toward the end of the third fiscal quarter of the effort, de-tailed plans for building upon and sustaining the initiative through the next fiscal year were devel-oped and vetted. These plans and practices enabled the company to manage costs in the long term.
Companies must improve their processes and capabilities if they hope to reduce or contain costs in a sustainable manner. Rethinking common practices in cost man-agement should help to realize this goal. In particular, achieving a more fine-grained perspective on where costs occur should be a centerpiece of any successful cost-management program.
Ankur Agrawal is a consultant in McKin-sey’s New York office, Olivia Nottebohm is an associate principal in the San Francisco office, and Andy West is a partner in the Boston office. This article was first published in May 2010 on The McKinsey Quarterly Web site, www.mckinseyquarterly.com. Copyright 2010 McKinsey & Company. All rights reserved. Reprinted by permission.
Key Points
www.industry20.com36 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
INDEX..
Every year Industry 2.0 analyzes and presents a list of the nation’s largest and most profitable manufacturing companies.
In our 8th annual ranking of the Top 500 companies in India, we present companies, both large and small, that have turned in an exceptional performance during the financial year 2009.
ManufacturingSMBs
2.0
Top
www.industry20.com36 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
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www.industry20.com 37 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
Top 500 RANKING pRoCESS
www.industry20.com 37 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
The Industry 2.0 rankings of manufacturing companies have been derived through an extensive and comprehensive analysis of financial data to give you insight into the performance of the manufacturing industry.
To determine ranking of manufacturing companies in India, data on key per-
formance indicators was obtained from the CMIE Prowess database. This repository contains information on more than 10,000 manufacturing companies.
Organizations were selected based on the availability of financial data for the
years 2007-08 and 2008-09. Subsequenly, companies with negative Profit after Tax (PAT) for the year 2008-09 were eliminated. A total of 2,028 manufacturing companies that met the selection criteria were consid-ered for further analysis.
Given a wide range of companies in terms of sales revenues in the sample, the
2,028 selected companies were divided into two groups. Companies with net revenues greater than Rs. 300 crore for the financial year 2008-09 were classified as Sample 1 (Top manufacturing companies), while companies with net revenues below Rs. 300 crore were included in Sample 2 (Top manufacturing SMbs). Of the 2,028 compa-nies we looked at, 647 comprised Sample 1, and remaining 1,381 were classified as SMbs. This annual issue of Industry 2.0 lists the ranks of Top 500 Large Manufac-turing Companies and Top 500 Manufactur-ing SMbs in two separate volumes.
The performance of the selected com-panies was compared and ranked across 9 parameters (sales turnover, absolute increase in sales, percentage change in the sales turnover, net profit, increase in net profit, PAT/Sales ratio, return on capital employed and increase across two financial years). This method offered the advantage of eliminating any subjectivity associated with assignment of weights to the param-eters considered for ranking the perfor-mance of companies. Scores for all param-eters were assigned based on the relative rank of an individual company on that parameter. Composite scores were then calculated for each company as the sum of the scores obtained by each company on all parameters. The companies were finally ranked on the composite score.
e – Prior period income – Indirect taxes. 2) PAT = PB
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Industry 2.0 presents the Batch of 2010. Meet the top performers of India who have scored big through innovative thinking, cost-optimisation strategies, intelligent marketing and quality products and services, and, of course, sheer hard work.
www.industry20.com40 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
28 - G P T Infraprojetcs Ltd. Non Metallic Mineral products Products of cement, concrete, etc. 132.64 220.42 87.78 66% 14.11 23.69 2.52 8.40 5.88 233% 4.76 12.87 8.11 170% 2% 4%
28 - G P T Infraprojetcs Ltd. Non Metallic Mineral products Products of cement, concrete, etc. 132.64 220.42 87.78 66% 14.11 23.69 2.52 8.40 5.88 233% 4.76 12.87 8.11 170% 2% 4%
e – Prior period income – Indirect taxes. 2) PAT = PB
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94 - A N S Ltd. Food and Beverage Vegetable / fruit products 3.84 19.24 15.40 401% 0.99 4.07 0.43 3.55 3.12 726% 4.05 30.39 26.34 650% 11% 18%
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e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
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KEy/HoSTING
46 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
164 630 V M T Spinning Co. Ltd. Textiles Cotton yarn 91.12 103.97 12.85 14% 17.47 23.37 8.44 14.07 5.63 67% 9.38 14.12 4.74 51% 9% 14%
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48 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
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50 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
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e – Prior period income – Indirect taxes. 2) PAT = PB
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e – Prior period income – Indirect taxes. 2) PAT = PB
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oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
60 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
62 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
416 501 G S Auto International Ltd. Auto Ancillary Other Automobile ancillaries, nec 81.48 92.94 11.46 14% 4.92 5.50 1.68 2.04 0.36 21% 14.45 15.27 0.82 6% 2% 2%
435 594 A B C Paper Ltd. Paper, Books, cards and Wood products Paper 165.93 197.23 31.30 19% 30.55 45.89 12.17 12.67 0.50 4% 11.4 6.99 -4.41 -39% 7% 6%
416 501 G S Auto International Ltd. Auto Ancillary Other Automobile ancillaries, nec 81.48 92.94 11.46 14% 4.92 5.50 1.68 2.04 0.36 21% 14.45 15.27 0.82 6% 2% 2%
435 594 A B C Paper Ltd. Paper, Books, cards and Wood products Paper 165.93 197.23 31.30 19% 30.55 45.89 12.17 12.67 0.50 4% 11.4 6.99 -4.41 -39% 7% 6%
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
64 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
66 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
512 154 A P W President Systems Ltd. Metal Products Miscellaneous articles of base metals 131.20 138.85 7.65 6% 18.49 18.26 9.23 9.27 0.04 0% 20.67 18.04 -2.63 -13% 7% 7%
512 154 A P W President Systems Ltd. Metal Products Miscellaneous articles of base metals 131.20 138.85 7.65 6% 18.49 18.26 9.23 9.27 0.04 0% 20.67 18.04 -2.63 -13% 7% 7%
514 115 T T K-L I G Ltd. Tyres and Tubes and Rubber Products Rubber contraceptives, males 226.82 276.01 49.19 22% 41.33 33.24 28.66 19.11 -9.55 -33% 18.17 11.63 -6.54 -36% 13% 7%
ROCe
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IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
68 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
70 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
72 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
74 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
76 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
78 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
80 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
82 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
84 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
86 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
88 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
90 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
92 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
939 506 N H K Spring India Ltd. Auto Ancillary Automobile ancillaries, nec 79.02 86.45 7.43 9% 14.75 10.06 7.01 4.22 -2.79 -40% 8.31 4.33 -3.98 -48% 9% 5%
960 - Rane T R W Steering Systems Ltd. Auto Ancillary Steering gears 372.07 290.14 -81.93 -22% 90.56 47.23 49.36 21.46 -27.90 -57% 33.38 14.97 -18.41 -55% 13% 7%
939 506 N H K Spring India Ltd. Auto Ancillary Automobile ancillaries, nec 79.02 86.45 7.43 9% 14.75 10.06 7.01 4.22 -2.79 -40% 8.31 4.33 -3.98 -48% 9% 5%
960 - Rane T R W Steering Systems Ltd. Auto Ancillary Steering gears 372.07 290.14 -81.93 -22% 90.56 47.23 49.36 21.46 -27.90 -57% 33.38 14.97 -18.41 -55% 13% 7%
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
94 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
96 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
98 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
100 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
102 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
1138 944 Clutch Auto Ltd. Auto Ancillary Drive transmission & steering parts 217.55 197.58 -19.97 -9% 33.48 26.92 13.48 4.46 -9.02 -67% 10.32 2.93 -7.39 -72% 6% 2%
1139 753 Sri Rama Vilas Service Ltd. Metal Products Articles of iron & steel 22.10 19.06 -3.04 -14% 5.59 4.14 3.59 2.71 -0.88 -25% 16.05 10.91 -5.14 -32% 16% 14%
1138 944 Clutch Auto Ltd. Auto Ancillary Drive transmission & steering parts 217.55 197.58 -19.97 -9% 33.48 26.92 13.48 4.46 -9.02 -67% 10.32 2.93 -7.39 -72% 6% 2%
1139 753 Sri Rama Vilas Service Ltd. Metal Products Articles of iron & steel 22.10 19.06 -3.04 -14% 5.59 4.14 3.59 2.71 -0.88 -25% 16.05 10.91 -5.14 -32% 16% 14%
1142 660 D H P India Ltd. Non Electrical Machinery Other valves 12.19 12.77 0.58 5% 1.92 1.93 0.72 0.56 -0.16 -22% 8.83 6.26 -2.57 -29% 6% 4%
1143 1252 Eimco-K C P Ltd. Auto Ancillary Automobile engine parts 16.28 26.51 10.23 63% 1.24 1.68 0.39 0.08 -0.31 -79% 7.75 1.35 -6.4 -83% 2% 0%
1144 536 I T L Industries Ltd. Machine Tools Sawing or cutting off machines 33.87 31.47 -2.40 -7% 3.43 3.40 1.68 1.27 -0.41 -24% 15.64 9.24 -6.4 -41% 5% 4%
ROCe
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IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
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ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
104 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
1179 - J B Advani & Co. Pvt. Ltd. Generators Transformers Switchgears and Misc Electrical machinery Machines for arc welding, nec 30.85 18.37 -12.48 -40% 12.64 7.94 11.21 7.40 -3.81 -34% 76.39 36.85 -39.54 -52% 36% 40%
ROCe
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e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
106 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
108 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
bank borr-comm
ercial papers – capital convertible warrants). 6) Source of D
ata: CMIE Prow
ess database.Key/Hosting
110 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
1253 - John Oakey & Mohan Ltd. Non Metallic Mineral products Abrasive powder or grain on a base 26.68 24.46 -2.22 -8% 1.79 1.44 0.67 0.37 -0.30 -45% 10.25 5.19 -5.06 -49% 3% 2%
1254 465 S N L Bearings Ltd. Non Electrical Machinery Needle roller bearings 16.05 12.56 -3.49 -22% 4.42 2.69 2.71 1.31 -1.40 -52% 23.24 13.4 -9.84 -42% 17% 10%
1277 960 De Nora India Ltd. Metal Products Miscellaneous articles of base metals, nec 21.32 21.39 0.07 0% 6.70 2.72 3.85 1.32 -2.53 -66% 15.16 5.11 -10.05 -66% 18% 6%
1253 - John Oakey & Mohan Ltd. Non Metallic Mineral products Abrasive powder or grain on a base 26.68 24.46 -2.22 -8% 1.79 1.44 0.67 0.37 -0.30 -45% 10.25 5.19 -5.06 -49% 3% 2%
1254 465 S N L Bearings Ltd. Non Electrical Machinery Needle roller bearings 16.05 12.56 -3.49 -22% 4.42 2.69 2.71 1.31 -1.40 -52% 23.24 13.4 -9.84 -42% 17% 10%
1277 960 De Nora India Ltd. Metal Products Miscellaneous articles of base metals, nec 21.32 21.39 0.07 0% 6.70 2.72 3.85 1.32 -2.53 -66% 15.16 5.11 -10.05 -66% 18% 6%
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
e + Prior period expenses + Extra ordinary expenses. 4) R
oce = PAT net of pne/Avg capital employed. 5) Capital em
ployed = (paid up equity capital + capital contribution by govt + cap suspense and other acct) +(paid up pref capital + pref suspense account) + (reserves and funds + res revaluation + m
isc exp not written off) + (borrow
ings – sec short term bank borr unsec short term
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112 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
1319 1221 Shree Bharani Spinnings (India) Ltd. Textiles High tenacity yarn of viscose rayon 22.12 20.58 -1.54 -7% 2.29 2.12 0.30 0.08 -0.22 -73% 2.92 0.82 -2.1 -72% 1% 0%
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114 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
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116 www.industry20.comseptember 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
Industry 2.0, india’s only magazine for the decision makers and influencers across the manufacturing and supply chain industries, invites your valuable inputs and opinions.
117www.industry20.com industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
e – Prior period income – Indirect taxes. 2) PAT = PB
IT – Tax. 3) PAT net of pne = PAT – Prior period income – Extra ordinary incom
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To get daily updates on the developments in indian Manufacturing industry, please subscribe to the free newsletter from industry 2.0, just by putting your e-mail iD in the box provided on the website, or e-mail to [email protected]
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To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of $145 billion accounting for more than 10 per cent of the gDp.” —automotive mission plan 2006-2016
The key challenges facing the auto ancillary industry at this juncture include rising commodity prices and weak demand in the exports markets.—icra limited (formerly investment information and credit rating agency of india limited)
cement and gypsum products have received cumulative foreign direct investment (fDi) of $1708.69 million between april 2000 and March 2010.—department of industrial policy and promotion
india has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16.—annual report 2009-10 by the ministry of steel
The indian pharmaceuticals industry has grown from a mere $0.32 billion turnover in 1980 to approximately $21.26 billion in 2009-10. The country now ranks third in terms of volume of production (10 per cent of global share) and 14th largest by value. —centre for monitoring indian economy (cmie)
in recent years the electronic industry is growing at a brisk pace. it is currently worth $10 billion but according to estimates, has the potential to reach $40 billion by 2010. —electronic industries association of india (elcina)
5th
www.industry20.com 121 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
4 143 - C G Lucy Switchgear Ltd. 63.68 8.52 4.99 22.81 8%
5 160 132 I M P Powers Ltd. 134.79 21.14 10.11 12.22 0%
Exports of agricultural products from india are expected to cross around $22 billion mark by 2014. —agricultural and processed food products export development authority (apeda)
in the world official gold holdings ratings, india stood at 11th position with 557.7 tonnes of gold reserve as of June 2010. —world gold council
The government of india has an ambitious mission of ‘power for all by 2012’ and planned power capacity addition of 78,577 MW in the 11th five year plan (2007-12).
$22bn
557.7ton
2.0 Top ManufacTuring SMBs
www.industry20.com122 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
The glass industry in india is worth around rs 5,500 crore, driven by an increase in demand from user industries such as infrastructure, construction, automobiles, food processing, beverages, pharmaceuticals and cosmetics, among others. —niir project consultancy services
opportunities are visible in every sector. after facing a downturn for two years everybody is buying machines this year.” —m loKeshwara rao, president, indian machine tool manufacturers’ association (imtma)
The government of india in its foreign Trade policy for 2000–2009 has identified the leather sector as a focus sector in view of its immense potential for export growth and generation of employment generation prospects.
www.industry20.com 123 industry 2.0 - technoLogy management for decision-makers | september 2010 | VoL. ii
The core sector industries namely power, cement, steel, ports and mining are witnessing a growth trajectory that has never been seen before. The demand for bulk material handling equipment depends on these industries.” —v a george, president & ceo, thejo engineering
The taxes and other contributions to government that mining companies pay are an important element in the creation of prosperity and stability of the countries in which they operate. —pricewaterhousecoopers’ total tax contribution study of the global mining industry
The size of the indian copper industry is around four lakh tonnes, which as percentage of world copper market is three per cent.—aruvian’s research report - analyzing the indian copper industry 3%
2.0 Top ManufacTuring SMBs
www.industry20.com124 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
5 164 630 V M T Spinning Co. Ltd. 103.97 23.37 14.07 14.12 14%
The Working group for the Eleventh five Year plan has estimated the market size of technical textiles to increase from $5.29 billion in 2006-07 to $10.6 billion in 2011-12, without any regulatory framework and to $15.16 billion with regulatory framework. —ministry of textiles
present demand from gulf countries for pipes and tubes is met through imports from india, Turkey and a few other countries.
rapid adoption of plastic applications alone can provide 50% of the intended targets in agriculture.—plastics vision 201250%
2.0 Top ManufacTuring SMBs
www.industry20.com126 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
The main customers for the wire and cable industry are the automotive, telecommunication and construction industries. in the past few years, these three sectors have led to an annual growth of about 25% in india. —wireindia.com
india lags far behind other major economies when compared in terms of radialisation. The radialisation level in Western Europe, north america, central Europe is around 100%, 96% and 95% respectively. Even the world average radialisation (65%) is well ahead of indian standards at 9.1%.
25%
www.industry20.com128 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
Gems and jewellery are an integral part of Indian tradition and custom. In India, gold
has traditionally been valued as a savings and investment vehicle, and it continues to be the second most popular investment option after bank deposits. India is the largest importer of gold and has emerged as the sixth largest con-sumer of diamonds in the world.
Gems and jewellery is a sector of increasing importance in the
Indian economy. It is not only a leading foreign exchange earner but is also one of the fastest growing industries in the country.
India is the most technologi-cally advanced diamond-cutting centre in the world and is one of the largest exporters of gems and jewellery. The Indian gems and jewellery industry’s competitive stand in the world market can be largely attributed to low cost of production and the availability of skilled labour in the country.
The gems and jewellery market essentially comprises sourcing, processing, manufactur-ing and selling of precious metals and gemstones such as gold, platinum, silver, diamond, ruby and sapphire etc. The Indian gems and jewellery sector underwent a
rough patch last year due to the global slump, which resulted in a sharp decline in exports to US. In addition subdued do-mestic demand, primarily due to higher raw materials costs, infla-tion and record gold prices all of which led to minimal disposable income to purchase gold and diamond jewellery.
Market growthThe Indian gems and jewellery sector is currently being esti-mated to be at $27 billion. The domestic market is estimated to be around $16.1 billion. The in-dustry is of prime significance as it is a net exporter and contrib-
utes around 13.4 per cent to India’s total exports. Plus, the sector provides employment to 1.5 million people directly and indirectly.
The industry is however highly fragmented with a large number of private sector players—at a point of time the country had around 4,50,000 retailers and 100,000 jewellers. However, the trend is rapidly changing and the sector is getting more organized with time. The export industry mainly comprises small-to-large units based in various special economic zones (SEZs), export processing zones (EPZs) and in Special Electronics Exports Pro-cessing Zone (SEEPZ).
India is the largest consumer and importer of gold in the world,
imports can reach up to about 700 tonnes of gold annually. The two major segments of the sector in India are gold jewellery and diamonds. Gold jewellery forms around 80 per cent of the Indian jewellery market, the remaining 20 per cent comprises fabri-cated studded jewellery inclusive of diamond studded as well as gemstone studded jewellery. Large portions of the rough, uncut diamonds processed in India are exported, either in the form of polished diamonds or finished diamond jewellery.
Government effortsOver the years, the Indian Gov-ernment has taken several mea-sures to boost the gems and jew-ellery sector. The Government has announced a series of measures in the Foreign Trade Policy 2009-14 aimed at encouraging export of gems and jewellery. Ensuing various government efforts and incentives, coupled with private sector initiatives, the Indian gems and jewellery sector is expected to grow at a CAGR of around 14 per cent from 2009 to 2012. The consumption of diamond jewellery in India is likely to touch $6.4 bil-lion in 2012.
Growing Indian population combined with rising per capita incomes will, over the long term, lead to growth in total demand for gold in India. India is therefore going to continue being a signifi-cant player in the world gems and jewellery market both as a source of processed diamonds and gems as well as a large consuming market. All India Gem and Jewel-lery Trade Federation (GJF) are targeting growth from $16.79 billion to $26.23 billion by 2012. Overall the industry is augured to grow over the next year due to stabilizing global economy.
Glittering Gold & DiamondsThe gold and diamond markets are putting India on a growth trajectory.
20,817 21,119 13,018Source: Gems & Jewellery Export Promotion Council (GJEPC)
www.industry20.com130 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
sector report
The Indian textile industry accounts for 14 per cent of the total industrial production in India. It
has a market size of $55 billion, accounting for four per cent of the country’s gross domestic product (GDP) and 17 per cent of the country’s export earnings. According to the annual report 2009-10 of the Ministry of Tex-tiles, the sector provides direct employment to over 35 million people making it the second larg-est provider of employment after agriculture.
India is one of the biggest apparel markets in the world and has the largest area under cotton cultivation—nine million hectares constituting 25 per cent of the world’s total cultivation area. In addition, India is the second-larg-est producer of silk in the world. Several international retail giants such as Marks & Spencer lever-age India as a key global sourcing destination.
The textiles and apparel indus-try can be broadly divided into the following sections:• Yarn and fibre and • Processed fabrics, readymade garments and apparel.
Top players in India include Welspun India, Vardhman Group, Alok Industries, Raymond and ArvindMills.
Business this yearAccording to the Ministry of Tex-tiles, the cumulative production of cloth during April 09 to March 2010 has recorded an increase of 8.3 per cent compared to the corresponding period of the previ-ous year. Moreover, total textile exports have augmented to $18.6 billion during April 09 to January 2010, from $17.7 billion during the corresponding period of the previous year, registering a raise of 4.95 per cent in rupee terms. Further, the share of textile exports in total exports has in-
creased to 12.36 per cent during April 09 to January 2010.
Booster effortsThe Ministry of Textiles has undertaken the initiative to establish institutes and train-ing centres in the private-public partnership mode to encourage participation from the private sector for the development of the industry. Initiatives such as the Technology Upgradation Fund Scheme (TUFS) and Technology Mission on Cotton (TMC), among several others, aid the develop-ment of the domestic industry and attract potential investors.
Since the end of quota re-gime in 2005, manufacturers in developing countries have gained considerably. Benefits under TUFS
will expire in March 2012. Al-though, the finance ministry is not in favour of extending the TUFS benefit, the textile industry is ex-pecting an extension with the de-cline in interest subsidy rate. The industry benefits from abundant availability of raw material (cot-ton) and low operation and labour costs. The vast developments and increase in retail sector have also been beneficiary for the sector.
ConcernsThe sector is one of the major sources of export earnings for the country. The textile industry is presently in a state of flux due to the severe contraction in export and domestic demand in the wake of global economic and financial crisis. Major business restruc-turing is taking place across the industry. Since a major part of the
industry is dependent on exports, any significant rise in rupee against the US $ will have adverse effect on the industry.
ForecastIt is being expected that the tex-tiles sector will continue to grow at a steady pace with organized retail fuelling the growth.
The Ministry of Textiles has anticipated that around $5.35 bil-lion of foreign investment would be made in India in the textile sector over the next five years.
Data released by the Depart-ment of Industrial Policy and Promotion shows that the textiles industry has attracted foreign direct investment (FDI) worth $817.26 million between April 2000 and March 2010.
Tapping The Retail BoomThe textiles sector is expected to grow at a steady pace with organized retail fuelling the growth.
by jai kumar jeswani
$5.35 billion of foreign
investment would be made in Indian textile sector over the next five years.
textiles Production Of Cloth In Different Sectors (million Sq metre)
www.industry20.com 131 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
sector report
Pig iron is the product in solid (lumpy) form obtained upon solidifica-tion of liquid iron in pig
casting machine. It gets the name ‘pig’ or ‘pig iron’ due to its typical humpy shape. It is one of the basic raw materials required by the foundry and casting industry
for manufacture of various types of castings for the engineering sector. Pig iron can be categorized into two major types, viz., ‘Basic Grade’ iron, which is generally used for steel making and ‘Found-ry Grade’ iron, which finds appli-cation in making of iron castings, which in turn are used for various applications in industrial and oth-er sectors. Foundry-grade pig iron growth is encouraged by buoyant growth in engineering, automobile,
and construction sectors. In the western countries pig iron is also used as a scrap substitute in the charge—mix of Electric Arc Fur-naces (EAFs). Pig iron is manu-factured from sintered, pelletized or lump iron ores using coke and limestone in a blast furnace. It is then fed to a basic oxygen furnace (BOF) in molten form along with scrap metal, fluxes, alloys and high-purity oxygen to manufacture steel. Pig iron production occurs either in blast furnaces where
coke is the primary fuel or in the most advanced corex process us-ing smelt reduction.
Government measuresIn the new industrial policy, the Government of India has opened up the iron sector for private investment, removing it from the list of industries reserved for public sector. Besides, the sector has been exempted compulsory licensing. This, along with some
other initiatives taken by the Gov-ernment has provided a definite impetus for entry, participation and growth of the private sector.
SAIL and RINL had been the primary producers of pig iron. However, of late, the share of stand-alone pig iron units has witnessed a significant increase. Production of pig iron in 2008-09 was about 5.299 million tonnes. Maximum amount of iron ore is consumed in pig iron production, in fact, it accounts for almost 98 per cent of the total consumption.
India is one of the key produc-ers of pig iron. Post-liberalization, several units have been set up in the private sector, due to which not only have the imports drasti-cally reduced, India has emerged to be a net exporter of pig iron. The private sector accounts for a large chunk of nearly 87 per cent of total production for sale of pig iron in the country.
According to World Steel As-sociation’s Year-to-date, world pig iron production has recorded a rise of 22 per cent with world ex-China up by 35.5 per cent. Pig iron production in countries that drive the seaborne market has seen an augmentation of 20.2 per cent YTD with China up 13.6 per cent. World pig iron production in 2009 experienced a slack and was down 3.1 per cent hitting the mark of 898 million tonnes with world ex-China down 22 per cent and China up 15.4 per cent at 676 million tonnes.
Leading The Export FrontMajor Government policies have helped India become a net exporter of pig iron.
by jai kumar jeswani
Government has provided a
definite impetus for entry,
participation and growth of the
private sector.
pig
iro
n
www.industry20.com132 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
sector report
Zinc prices have corrected by 20 per cent over the past three months on the back of high inventory
and continued excess production. While the main reason for fall in the prices was high inventory, continued surplus production played an undeniable part. It can be hoped that Zinc prices would find support at $1900-2000/t since about 10 per cent of the global capacity is most likely to
turn unprofitable at these prices. At present the price of Zinc is around $1950/t in the interna-tional market.
With respect to the first used, galvanizing now accounts for an approximate of 50 per cent of zinc demand in iron and steel products, because of its effectiveness in protecting the metal against rust and corrosion. In addition, zinc’s ability to die‐cast complicated components makes it an essential metal in a number of industries and products. Zinc also has an important first use in brass, rolled and extruded products and in the chemicals industry where it consti-tutes as an essential nutritional trace element.
ConcernsNickel and zinc have elevated inventory levels. Plus, they have considerable idle capacity, which can be expected to ensue a signifi-cant curbing of a price hike until inventories are reduced.
ForecastGlobal demand for refined zinc metal is being augured to rise by 8.9 per cent to 11.14 million tonnes in 2010. According to the
International Lead and Zinc Study Group (ILZSG), after witness-ing a decline of 24.5 per cent in 2009, demand in Europe has been forecasted to rise by 21.6 per cent this year.
Usage in Japan and most of Southeast Asia is also expected to register strong growth this year following sharp declines observed in 2009. In the United States, a partial recovery of 5.6 per cent has been anticipated after a reduc-tion of 12.2 per cent last year. Continued infrastructure expendi-ture projects combined with strong growth in the construction and automotive sectors are expeced to result in a further rise in Chinese demand of 8.9 per cent.
Global zinc mine production in 2010 is forecast to increase by 4.4 per cent to 11.07 million tonnes. In India, output will benefit from the further expansion of the Ram-pura Agucha mine.
Other factors include the open-ing of Hindustan Zinc’s new Rajpu-ra Dariba refinery in India and an anticipated rise in Chinese output of 11.3 per cent. For 2010, a fairly balanced market is foreseen with a surplus of 160 kt and for 2011 a small deficit is anticipated.
Global demand for refined lead metal is forecast to rise by 2.9 per cent to 9.14 million tonnes in 2010. This will be mainly
driven by a further 9.1 per cent increase in usage in China, where strong growth in the industrial battery sector and further rises in automotive and bike sales are anticipated.
Global lead mine production is forecast to increase by 5 per cent to 4.25 million tonnes in 2010. According to ILZSG, this will be primarily as a consequence of higher output in Australia, China, India and Mexico. There is a further anticipated 11.9 per cent rise in Chinese production, the commissioning of new operations in Brazil and India, and a return to normal production levels at a number of plants that were operat-ing at reduced rates in 2009.
Eyeing A Fairly Balanced GrowthThough the base metals industry suffered a slight setback during the last fiscal, the industry looks poised for a fairly balanced growth in the coming year, as the market recovers.
Global demand for refined zinc metal is being
augured to rise by 8.9 per cent
to 11.14 million tonnes in 2010.
Base
met
als
Source: Morgan Stanley Research * = Estimated
Zinc Global Supply / Demand (‘Mt)
www.industry20.com 133 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
The industry is expected to add about 50 million
tonnes cement capacity in 2010,
attaining a total of 280 million
tonnes.
India is the world’s second largest producer of cement with a total capacity of 219 million tonnes (MT) as
estimated at the end of FY 2009. According to Cement Manufac-turer’s Association (CMA), the industry is expected to add about 50 million tonnes cement capac-ity in 2010, attaining a total of 280 million tonnes.
Business this yearCement dispatches during 2009–10 were 159.43 MT increasing by
12 per cent over 142.23 in 2008-09, according to CMA reports. Ce-ment production during 2009-10 was 160.31 MT recording a rise of 12.37 per cent over 142.65 MT in 2008-09. In the recent past, demand has surpassed supply, resulting in healthy cement prices across the country.
Government measuresThe Indian Government plans on spending more than $500 billion on infrastructure in the 11th Five Year Plan. This Plan includes building road infrastructure,
which will require 75 million met-ric tonnes of cement and power infrastructure that demands around 45 million MT of cement.
Booster effectsThe upcoming Special Economic Zones (SEZs) in areas such as Bangalore, Bhubaneswar, Indore, Nasik and Pune is expected to further boost the demand for ce-ment. The Government’s invest-ments on infrastructure alone can help the key cement industry to maintain an annual growth of 9 to 10 per cent in 2010.
ConcernsWith the growth in the sector and waning demand supply gap, cement producers have lined up capacity expansion plans either by brownfield or greenfield expan-
sion route. The fresh capacities announced till date will add up around 65 MT to the existing ca-pacity (219 MT) and are expected to go on stream by FY11.
As the capacities become op-erational, which has started tak-ing place, supply may once again exceed demand putting pressure on margins of cement companies. Recently, the demand has slowed down as real estate and construc-tion activities in the urban areas have taken a back seat with economic slowdown. The housing sector consumes almost 60 to 70
per cent of the country’s cement. Therefore, recovery in the real estate sector is critical to sustain 10 to 12 per cent growth over the long term, as it would have a significant impact on the augured increase in consumption of ce-ment, ensuing to demand supply mismatch. Also, the hike in prices of coal and petroleum products could impact cement companies’ margins. High Government levies and inadequate infrastructure fa-cilities at ports and border points make Indian cement uncompeti-tive in the global market.
ForecastThe government’s continued thrust on infrastructure will help the cement sector to maintain an annual growth of 9 to 10 per cent in 2010. Apart from this, rail-
ways, urban infrastructure, ports, airports, Information Technology (IT) and Information Technology Enabled Services (ITES) sector, organized retailing, shopping malls and multiplexes will be the main sectors driving the demand of cement in the country.
The target for export has been estimated to be 11 million tonnes and 13 million respectively for 2011 and 2012. With the cement industry expected to add around 100 mn tonnes during FY 2010-12E, concerns about oversupply continues to persist.
Overcoming The Demand-Supply GapThe increased focus on the infrastructure and housing sector is expected to boost the growth of the cement industry in the near future.
by jai kumar jeswani
cemen
t
Sour
ce: M
orga
n St
anle
y Re
sear
ch
sector report
www.industry20.com134 september 2010 | VoL. ii | industry 2.0 - technoLogy management for decision-makers
Pesticide use significantly contributes towards enhancing agricul-tural production. India
is the fourth largest producer of pesticides ranking after US, Japan and China. The global pesticide industry is estimated to be around $37 billion.
Agriculture contributes 18 per cent of India’s gross domestic product (GDP). Nearly 60 per cent of the India’s labour force derives its livelihood from agriculture.
It has been estimated that India loses approximately 18 per cent of the crop yield, due to pest attack each year. The use of pesticides helps to reduce the crop losses, provides economic benefits to farmers, reduces soil erosion and helps in ensuring food safety and security for the nation.
Pesticides play a vital role in crop protection and hence act as an essential input to agricul-tural produce. Pesticides assist in controlling pests and maintaining the availability of low cost and high quality food. They also aid improved storage and distribution of crops, fruits and grains. Higher crop productivity can be achieved through high-grade crop protection
and in India the challenge seems to be to prevent or reduce pest related crop losses. The major categories of pesticides are herbi-cides, insecticides and fungicides. Herbicides are the most widely used pesticide, since weeds are the major constraint that limit yield in many crops.
GrowthThe markets for chemical pes-ticides have undergone rapid changes over the last decade; but
the overall pesticide use world-wide has either remained constant or declined.
The pesticides industry devel-oped in India mainly due to the Indian Government policies of self-reliance across the board, protection of domestic industry and assured demand because of the large agricultural production. The industry is regulated by two ministries; while the Department of Chemicals and Petrochemicals under the Ministry of Chemicals and Fertilisers promotes produc-tion of pesticides; the Ministry of Agriculture monitors the quality and supply of pesticides.
The high customs duties and the Government of India’s policy
towards self-reliance in pesticide production, have been serving as the protectors of the Indian pesti-cide industry.
The easy availability of raw materials, low-cost trained and skilled workforce, low overheads, and technically qualified mana-gerial base have made India an attractive sourcing destination for global multinational corporations (MNCs). India has emerged as a low-cost sourcing base for generic pesticides products.
FutureDemand for pesticides in India is cyclic and is largely dependent on agricultural production, which in turn is highly dependent on monsoon. Kharif crops account for nearly 2/3rd of annual pesticide consumption. Adverse monsoon conditions like drought or deficit rainfall impacts the consumption of pesticides adversely.
India’s production and con-sumption of pesticides is expected to fall in the current year due to deficient rains in many parts of the country. Due to the vague demand scenarios in the domestic mar-kets, pesticides producers have increased the share of exports in their production, thereby providing a cushion to prices.
The demand for pesticides in India has declined, because of slow growth in agricultural production, increase in Ge-netically Modified (GM) crop area under pesticide-using agricultural products. Exports constitute a major part of the industry and a focus on exports can deliver rapid expansion in volumes and provide protection from unpredictability of the local market.
The future prospects of the pesticides industry look promis-ing on account of the increasing need to protect farm produce from pests, higher farmer affordability / profitability and lucrative farm produce prices.
Promising GrowthThe growth of the pesticide industry is dependent on the growth of agriculture. With the country witnessing good agricultural growth, the future of the pesticide industry looks promising in the coming years.
www.industry20.com 135 industry 2.0 - technology management for decision-makers | september 2010 | Vol. ii
Proximity Controls Division of Dwyer Instruments has
launched its new series VPI low cost rotary valve position indica-tors. The new product is compact and rugged for confined and severe locations. The unit provides visual position indication as well as two internal limit switches.
The product features spring-loaded splined cams, which require no tools for a quick adjust-ment. The NEMA 6 (IP67) rating ensures protection against the ingress of liquid and debris.
The device is available with mechanical or proximity limit switches. The mechanical models feature two SPDT limit switches,
while the proximity models feature two solid-state inductive limit switches.
Supercritical Fluid Technologies has introduced the SFT-100XW supercritical fluid extraction (SFE) system, which investigates
the feasibility of applying supercritical fluid techniques to various analyses and processing challenges. The machine is suitable in
teaching laboratories and for initial process development work.
The product is designed to perform extrac-tions in a supercritical fluid media. The unit also includes dual sapphire syringe pump technol-ogy, which pressurizes the stainless steel ves-sel, which is capable of containing supercritical fluids at pressures up to 10,000 psi (69 MPa).
Haas Automation has launched a new five-axis machine, viz.,
the TR160Y dual-axis trunnion rotary table.
The machine is 20-inch deep and less than 25-inch wide. The unit fits on one end of the machine’s table. It includes a 160 mm T-slot platter and swings parts up to 7.5-inch diameter. The maximum platter capacity of the product is 80 lb. The trunnion provides ±120 degrees of tilt and 360 degrees of rotation for full simultaneous 5-axis motion or to position parts to any angle for machining.
The other features of the prod-uct include brushless servomo-
tors, which provide 150 ft-lb of spindle torque on both axes. The brake torque is 300 ft-lb and 100 ft-lb respectively and speeds include 130 deg/sec on the rotary axis and 100 deg/sec on the tilt axis.
Thermo Fisher Scientific has introduced two new DXR nanocarbon analysis packages for the characterization and microcharacter-
ization of carbon nanomaterials. Both packages provide complete systems for carbon nanotube analysis.
The product includes DXR Raman platform and provides informa-tion on the molecular structure and morphology of carbon nanoma-terials. The DXR nanocarbon microanalysis package features the
Raman microscope and is con-figured for microcharacteriza-tion, while the DXR nanocarbon analysis package leverages the SmartRaman and offers bulk material characterization.
Peddinghaus has introduced the Advantage 2 high speed
beam drill line, which is capable of high speed drilling, tapping, coun-tersinking and multi axis scribing for profiles such as beams, chan-nel, angle, square/rectangular hollow sections and flat bar.
The new product utilizes three drill spindles each accompanied by an optional 5-station automatic tool changer. The automatic tool changing paired with carbide drilling of up to 2250 RPM and 27 IPM / 685 mmpm feed rates make the unit suitable for profiles up to 447 kg/300 lbs per ft. The other features of the product in-
clude carbide drilling, Peddiflex3D CAD programming, electronic motion and spindle control and Siemens 25 HP / 18.5 kW spindle specific electronic drilling motors.
Acmevac Sales has launched Vacuum Technology India’s
new vacuum lifting and transport-ing device, the Vaculift, which can be hooked to a crane or hoist. The new material handling product lifts and transports flat objects like steel plates, copper plates, aluminium plates, marble/gran-ite, laminated boards etc for the manufacturing process.
The items are held in position by vacuum and lash-ing is completely eliminated. In addition to the handling of flat objects, the new product
is also used for the handling of air conditioners by Voltas and refrigerators by Godrej.
www.industry20.com136 september 2010 | Vol. ii | industry 2.0 - technology management for decision-makers
Metalworking Fluid
Cimcool has launched a new hybrid Cimtech 609, which provides good grinding and machining ability. The new product is designed
for moderate to heavy-duty operations and acts as a metalworking fluid concentrate for most aluminium alloys, titanium, exotic alloys, cast iron, carbon steel, high speed steel, high alloy steel and stain-less steel.
The product is also suitable for stamping and drawing opera-tions. The unit provides lubricity without using chlorinated pressure additives, which makes it suitable for bearing, valve stem and other
difficult grinding operations with close tolerance requirements.
The corrosion inhibitors facili-tate the use of this product on both ferrous and most non-ferrous appli-cations. The unit is compatible with titanium and other exotic alloys.
Royal Products has launched Quick-Grip CNC collet chucks, which has a special design for installation. The installation tool
compresses the rear end of the collet such that it can be inserted. Upon expansion, the collet locks into place via a hook and groove arrangement. The installation tool incorporates steel pins that align with drilled holes on the collet face. In its compressed state, the collet can then be inserted into the collet chuck, where the hooks on the rear of the collet segments become axially aligned with a retain-
ing groove in the chuck.The product is short and
has a full collapse range of 0.062-inch.
Royal ProductsTel: +1-800-6454174E-mail: [email protected]: www.royalprod.com
Grade Blades
Rollomatic has added a new multi-axis tool grinding ma-
chine to its GrindSmart series. The new product, viz., 5-axis grinder model 528XS comes with an optional robot.
The new product is suitable for regrinding/modification grind-ing and manufacturing of rotary cutting tools. The unit includes PentaSmart software, a third party software package for endmills, drills and step tools. Besides, the product also features BurCalc soft-
ware for bur production and other Rollomatic grinding modules.
Alliance Plastics has launched vented, pipe and conduit open
end pipe caps to protect both non-threaded and threaded NPT pipe ends, rigid metal and intermediate metal conduit. The product range covers nominal pipe sizes from 1/8-inch to 64-inch. The caps are manufactured from low-density and medium-density polyethylene materials and protect pipe ends
from damage and debris such as dirt and moisture.
The product is offered with closed ends, open ends or vent holes. The vented holes stop pressure from building up that may force these products off during storage and shipment. Stronger items that are resistant to cracking or splitting are used in areas with extreme hot or cold temperatures. Heavy duty lines provide thick material for security. Open-ended parts are used for protecting external threads, inter-mediate metal conduit ends.
Han-Kwang USA has launched PS model 3015, a short gan-
try, 2D flying optic laser system, capable of handling 60-inch wide x 120-inch long workpieces. The short gantry arrangement helps in enhanced vision and the compact design facilitates regulation in the cutting process.
The new product features rapid single axis speed of 4,724 ipm, simultaneous X-Y axis speed of 7,900 ipm, driven by twin servos on the gantry and maximum cut-ting speed of 1,181 ipm.
The unit also includes a dual shuttle pallet system to maintain optimum productivity in process-ing. The product features a Pana-sonic CO2 laser resonator in 2.5, 4 and 6 KW versions, a beam radius
control, and a sensing board and head design, which helps improve cutting speed for all sheet metals.
The other features of the prod-uct comprise a plasma monitoring
unit, which tracks cut errors to reduce out-of-tolerance conditions in the cutting cycle.
Hyde Industrial Blade Solutions has launched a line of indus-
trial grade blades for converting abrasive rolls and sheets into finished products. The new prod-uct, viz., IBS abrasive converting blades are designed to meet the exacting tolerances and clean cuts required by abrasive manufactur-ers and converters to eliminate waste and improve output.
The product is available in cir-cular or straight edge designs and is engineered for slitting of large abrasive rolls or coils. The circular blades come in single and double
beveled edges with standard or wavy cut edge designs. These are manufactured in carbon alloy or high speed steel.