Thread by @oarhtanirs

Make in India (MII)
A pre commercial run of Vande Bharat Express stopped for a brief while for some technical snag n all wizards in Ind started giving gyaan on how MII has failed n what must b done 2 fix it.
well, wht exactly is MII?
Let me try to explain it here..

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MII is not a short term project but long term deep thought on looking to make things in india instead of importing it from outside or making it on foreign soil for our export market..

Its like a challenge thrown by PM to our manufacturers..

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Let's look at simplest of things like a serial set of lights that we use for various functions n events
There r many attractive models of these available in the market that serve the purpose well..

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90% of these products that u pick will b made in China who has built a huge economy of scale n can manufacture billions of kms of such led lights to meet the demands of the whole world. The rate of interest at which Chinese cmpys get credit is atleast 400-500 bps < in India

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Moreover Chinese govt gives Chinese manufacturers an export incentive which is against the WTO norms..
So massive economies of scale (possible due 2 lower cost of capital), exports incentives, robust domestic market 2 fall back on gives Chinese mfgrs the edge over others..

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This creates massive number of jobs locally, foreign exchange, consumption increases, tax collections increase n whole economy steam rolls..
Like led lights there r billions of products that China is able to make it competitively for not just themselves but for the world..

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Make in India is asking Indian mfgrs can v make these items in India? An outright answer would b not at the moment but if we look to change the ways things r done it certainly can b done..

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Look how v hv created a revolution in LED bulbs n lamps. govt convinced the mfgrs 2 invest n expand capacity n it assured them a domestic market whch made it poss for thm 2 build economies of scale n start making LED bulbs that could b sold at 1/4-1/5th of earlier prices

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many of the led mfrs r now looking 2 export them 2 whch increases their market n thus justifies cost

This is how we make in India

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Hwevr its not as simple as this in other sectors.. Electronics, whose imports were about to exceed that of oil at one pt of time, is 1 such sector..
betwn 2004-14 v imported 500 crs full box mobiles. 2de v hv multiple factories doing @ 25-30% of value add in mobile assly

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this % will also go up significantly over a period of time as we build a cohesive supply ecosytem around these units..
as a member of the electronics association of india & have few clients in this domain i can personally vouch for the work being done on this front

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If u r completely reliable on imports for ur mfg, it takes lot of time 2 stop importing n making / sourcing locally
its evn more problematic if u hv 2 depend on ur client 2 give clearance for import substitution as ther may b possibility of cost scale up which nobody wants

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Let me give an eg -

I was part of a project whch was making products for an American client in India.
The client was also getting the product made frm another supplier in China who used to do 100% mfgr for them and hence the supply chain was completely built in China.

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As our share of biz started to increase, relying on the pre existing Chinese supply base wasnt financially viable as our logistics cost was shooting up very high.
but we had no choice to import as it was the clients instructions..

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We decided to change it..

In order to do it, we had to develop these products locally, get it approved from the client, give the client the confidence that supply wouldn't b jeopardised from local supplier n then phase out completely from imported supplier

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All this seems simple but its not.
Ther r huge risks n if v failed v wud nvr b able 2 sell our local supply capabilities 2 this client.
Stakes wer huge & all this while v spent money frm our pocket 2 make it happen as this was our proposal not customers pressing need..

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So we invested a 7 digit amt for the tool sets..
Tools take 3-4 months to make and further 1 month for shipping from China..
At that time there was no better cost effective means for tool making in india

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So 5 months after investing on the tools, the tools arrived at our suppliers place..

Suppliers has grossly underestimated the challenges involved and quality expectations as till then they had not experienced any such expectations from their clients..

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Their pricing was also based on such expectations. quite frankly speaking the supplier was grossly under prepared 2 deliver a product with such high customer expectations at the price he had quoted 2 us. (v knw it but if v had waited fr best supplier v wud nvr hd got ther)

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V nw had 2 get the supplier upto speed n thn get products out of him. 2 the credit of the supplier he didnt back out nor increase the price and put in a team tht wud deliver the product as per expectations..

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1st trials wer taken. flop show. it didn't evn pass internal quality.
2nd trials.. same result.
V figured out v cudn't let this happen for long so v deputed 1 of our quality guys 2 the suppliers place 2 help thm with process n over nxt few wks things improved drastically.

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Trials aftr trials wer taken & finally a product worthy of sendin 2 customer ws ready. it takes a wk by courier n massive cost 2 air ship metal n plastic parts to US but v had no othr choice.
The samples reached client n few of thm passed while many hd serious observations.

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We got back to the drawing boards n started 2 iron out the problems and were ready with next batch to be sent to the client.. some more parts got approved but problems on 2 or 3 parts that needed secondary processes like painting etc persisted..

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V had several rounds of conference calls with the experts in our organization based across the world n it was decided 2 change the base material of the product 2 the 1 which didnt need any secondary processes.

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The suppliers were all getting jittery by now despite not having any thing at risk till now except for potential future business.. but they all hung in there..

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So we decided to change the material n a fresh lot of steel was ordered whch wud take 2-3 mths coming in frm Japan.
After the steel came in v took samples of all products n lo behold thy passed our internal quality checks n it was decided 2 send the samples 2 the client.

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This time the product passed at clients end n v got clearance 2 start ordering frm the local suppliers.
The client asked his China supplier (our competitor) if thy cud shift 2 same process 2 but thy refused as it wud involve massive time n cost for them 2 remain competitive

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We prepared a phase in phase out schedule and over 3-4 qtrs shifted 100% of our supplies to local..

We had successfully replaced import products with a made in India producta after close to 1.5 yrs of investing in the tools.

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This is the challenge in make in india !!

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Today close to 8 yrs since that project I am told the supplier has now set up his 3rd factory and supplies parts to major auto companies in India including JEEP..

I feel happy to have contributed in a small way to build a supplier capability that now adds to make in india

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Hw mny mfgrs r ready 2 invest such money & time to recover the investment?
Hw mny suppliers r ready 2 hang in ther n invest in ther processes for long term benefits instead of short term gains?
Are there enuf quality conscious suppliers in Ind 2 match intl strds?

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Are there enough talented ppl ready 2 work in mfg 2 make in India?

And we say very casually we must compete with China.. yes we will but it will take time n changes in overall mindset n policies.

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Make in India is not a project..
It's a thought, it's a challenge thrown by our PM to our manufacturers..

many mfgrs r not ready due 2 past policies n mindset but they are gearing up.. they have not given up n they wont.. thats the bloody indian spirit !!

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many mfgrs hv spent their lifetime waiting for policy changes whch nvr came but thy have not shut shop but hung in there 2 fight another day in the hope tht 1 day their time under the sun will come..

we need to respect that !

that moment came when MII was announced

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How mny mfgrs take up the challenge wl determine success of MII.

My 20 yrs exp in mfg industry of whch last 6 yrs hv been as an entrepreneur 2 source best candidates for helping indian mfgrs succeed in MII tells me tht v wl surely c a huge success in MII

Vande Mataram

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