India, in the past in spite of having a nascent market, had favorable circumstances to establish itself as a global manufacturing centre for decades. Since then there have been a few spurs of actions such as the LPG movement in 1991 that made the Indian economy more resilient and robust. Moreover it is constituted by a diversified set of established industries across both manufacturing and service sectors.
Yet again we find ourselves in a similar situation with the launch of the government driven ‘Make In India’ campaign, which deemed to give a boost to the manufacturing ecosystem by providing infrastructural and policy level support. This campaign promises a lot but the effectiveness on Indian Manufacturing will take some time to be noticed given the complexity of problems in the business scenario including skilled workforce, capital, land and labor laws and technological advancements.
With launch of the ‘Make in India’ initiative, India has also set for itself an ambitious target of increasing the contribution of manufacturing output to 25 per cent of gross domestic product (GDP) by 2025, from 16 per cent currently. India’s economy is expected to grow at 7.4 per cent in 2014-15 as per a Government forecast. According to a new formula which uses 2011-12 as the new ‘base year’, the revised statistics showed inflation-adjusted economic growth rate for October-December 2014 at 7.5 per cent, making India one of the fastest growing major economy in the world.
The Indian manufacturing industry is at the threshold of becoming a ‘Global Manufacturing Hub’. Operational Excellence here has to play a major role to accelerate the ‘Make in India’ campaign and help Indian economy to grow.
India has demonstrated its leadership capabilities with unmatched examples like Cost leadership at Orbit Shift Mission Mars amongst others. Considering that competitiveness of Indian manufacturing industry is 71 out of 144 countries and has declined over the last year, industry can change this and jump-start the road to profitable growth only by focusing on Operational Excellence and Innovation.
The need to improve efficiencies which has clear linkages with growth, gain from best-in-class technology absorption and deploying effective change management framework are key drivers for accelerating the ‘Make in India’ initiative.
Operational Excellence should not be taken as one off initiative and must be pursued as a journey. Organizations that have nurtured Operational Excellence have been able to leverage their strengths and overcome weaknesses. Operational Excellence delivers compelling business outcomes when pursued correctly.
Watch out this space for forthcoming insights on each of the accelerator (driver)!
Adapted by: Raveena Rathi