Taking POLE position

The world of ESOKazim Ali Khan Ma Foi

Engineering …An industry called as ESO

YOU NEED TO KNOW…

From the context From the context ……

1.1. The Italian word "ingeniator" means "the ingenious one," and whoThe Italian word "ingeniator" means "the ingenious one," and who else but else but

Leonardo Leonardo DaDa Vinci could be called the "Ingegnere Generale"? Vinci could be called the "Ingegnere Generale"?

2.2. For a long time, the word engineer was most associa ted with the For a long time, the word engineer was most associa ted with the military military

engineer, or someone who constructed war machines engineer, or someone who constructed war machines

3.3. France boasts the first school of engineering, the National SchoFrance boasts the first school of engineering, the National Scho ol of Bridges and ol of Bridges and

Highways, established in 1747, which trained civil engineers whoHighways, established in 1747, which trained civil engineers who built structures built structures

such as sewer and water systems, railroads and even cities such as sewer and water systems, railroads and even cities

4.4. Civil engineering evolved hand in hand with mechani cal engineeriCivil engineering evolved hand in hand with mechani cal engineeri ng, which ng, which

looked at all types of machinerylooked at all types of machinery

Landscape DesigningLandscape DesigningDesign Build Design Build

TeamsTeamsInteriorInterior

DesigningDesigning

Building Building

Information ModeInformation Mode

Project Project ManagementManagement

Energy Energy ModelingModeling

Structural Structural DesignDesign ArchitectureArchitecture

Engineering

ConstructionConstruction

MAKING POSSIBLEMAKING POSSIBLE ……..

SEIZING OPPORTUNITY

Engineering Services ApplicationEngineering Services Application

Product Engineering

Product Engineering

DE

MA

ND

SU

PP

LY

IndustrialConstruction

IndustrialConstruction

Power & Control systems

Power & Control systems

UtilitiesUtilities

Enterprise Asset

Management

Enterprise Asset

Management

MaintenanceMaintenance

AerospaceAnd

Defence

AerospaceAnd

Defence

Electronics And

Telecommunication

Electronics And

Telecommunication

ProcessEngineering

ProcessEngineering

Plant Automation

Plant Automation

Automotive

Aerospace

Hi tech/ Telecom

Product & Component Design

Process EngineeringPlant Design

Plant Maintenance and Operations

Construction and Industrial Machinery

ES and ScopeES and Scope ……

Major Engineering Process Major Engineering Process ApplicationsApplications

DocumentationDocumentation

Engineering Change OrderEngineering Change Order

2d/3d Modeling2d/3d Modeling

ConversionsConversions

Core DesignCore Design

••PLM SolutionsPLM Solutions••Product RedesignProduct Redesign

Reverse EngineeringReverse Engineering

High End Engineering High End Engineering Testing and AnalysisTesting and Analysis

Embedded Software Embedded Software DevelopmentDevelopment

ES Value ChainES Value Chain ……

•Design Analysis•Testing and Simulations

•Design Analysis•Testing and Simulations

Plant engg - plant layout, plant design, material flow simulation and process optimization

R&D Concentration on High Tech IndustriesAutomotive & aerospace sectors

Key services in Embedded/ Electronic System Chip De sign, Mechatronics, board design, testing and Prototyping

Existing ES MarketExisting ES Market ……

Embedded & Electronic segment – Communications (Largest customer)

Global ESO - IndiaGlobal ESO Global ESO -- IndiaIndia

Corporations

Direct Stake Holders

Rapid Changes in Business and Technology

Business Business ParadigmsParadigms

In In Engineering Engineering

Services Services

Baby boomers retiring!

Governmental Organizations

Private Stakeholders

mySAP ERP

SkillsIndirect Stake holdersContemporary Industry Practise

Innovation and Productivity Improvement

Project and Knowledge Management

Global Project Teams

Service Providers & NGOs

Global ES.. constituentsGlobal ES.. constituents

Emerging ParadigmEmerging Paradigm

ESO ESO –– IndiaIndia

1.1. Global ESO market is estimated $40B by 2015Global ESO market is estimated $40B by 2015

2.2. Opportunity for India Opportunity for India –– Automotive, Aerospace and hiAutomotive, Aerospace and hi --tech industrytech industry

3.3. Indian competitive services include CAM, CAE etc., while verticaIndian competitive services include CAM, CAE etc., while vertica l l

specific engineering services offer PLCM, Respecific engineering services offer PLCM, Re --engineering and engineering and

design change management design change management

4.4. ESO is one such segment that is fast catching their attention ESO is one such segment that is fast catching their attention

�� 55% of the market is controlled by IT service provi ders, 55% of the market is controlled by IT service provi ders,

�� 40% is with captives and the rest is catered by the niche player40% is with captives and the rest is catered by the niche player s s

ESO - India

5. Major thrust – ES as a segment in multi-disciplinary viz., automotive, aerospace, high-tech/telecom, utilities and constru ction/industrial

6. ^60% is aerospace, auto and telecom

7. Concerns – IP, lack of resources, domain knowledge, lack of understanding what really works with outsourcing

8. Domain knowledge, process expertise, flexibility ar ound businessmodels, long-term scaling engagements and ability t o weave into a customer’s product development program life cycle

9. Engineering sourcing is a high potential area of fo cus

Opportunity landscapeOpportunity landscape

time

cash flow

ImproveEfficiency

AccelerateTime-to-Benefit

Reduce InitialInvestments

LeverageLandscape

Telecom Switch DesignTelecom Switch Design

AerospaceAerospace

Aircraft EngineAircraft Engine

Complete end to end Complete end to end Product DesignProduct Design

DraftingDrafting

Product DefinitionProduct Definition

Technical PublishingTechnical Publishing

Process ExpertiseProcess Expertise

Opportunity landscapeOpportunity landscape

Apart from modeling and detailingApart from modeling and detailing

1.1. Knowledge based engineeringKnowledge based engineering

2.2. Digital manufacturingDigital manufacturing

3.3. Product Lifecycle mgtProduct Lifecycle mgt

4.4. Technical publicationTechnical publication

5.5. Sourcing and manufacturing servicesSourcing and manufacturing services

6.6. Plant solutionsPlant solutions

7.7. Integrated Asset mgtIntegrated Asset mgt

8.8. Remote monitoring an diagnostics and geospatial sol utions Remote monitoring an diagnostics and geospatial sol utions

4Spend on

Engineering

services is

under pressure

to produce

increasing

returns

• Grow Capacity

• Provide Direct Support to Customers

• Simpler to manage

• Reduce Cost

• Get High Quality Talent

• Cut Time

• Access to new markets

DriversDrivers

Factors Factors –– Critical SuccessCritical Success ……

Managing Teams

Complexity due to deliverables

High Iteration

Measuring Productivity Difficult

Very High Domain Knowledge

High Degree of Knowledge transfer

Higher Transition costs

Customer Cost Exit High

Functional Needs

Systems Economics

Careful Careful PlanningPlanning

Provider Provider SelectionSelection

TransitionTransitionManagementManagement

CommitmentCommitmentFrom From

StrategicStrategicLeadershipLeadership

ChallengesChallenges ……

1.1. IP protection orientationIP protection orientation

2.2. Technical/domain expertiseTechnical/domain expertise

3.3. Advanced technology and infrastructureAdvanced technology and infrastructure

4.4. Product development/process innovation expertiseProduct development/process innovation expertise

5.5. SectorSector --specific engagement/business modelsspecific engagement/business models

6.6. Complex project management knowComplex project management know --how how

Future ahead

1. ES – Not just about creating digital models and drawings 2. India with manufacturing industry – automotive, aerospace, mining

and construction3. Develop IP in some core areas 4. Global markets stabilized and R&D spends are boosters5. Focusing on innovations – automotive platform development,

energy efficient/climate change solutions 6. Provide ‘design-cum-manufacturing’ offerings7. Nuclear deals, advancement in aerospace industry and defense

sectors sparks8. Value arbitrage – competitive products, quick time to market,

innovation and high value work

Pro

fit

0

TimeVolume

Pri

ce

Base Business

Buyers Sellers

Price

Cost

$/U

nit

Post-Launch

Q2 Q4 Q6 Q8 Q10

Revenue

Cost

$/P

roje

ct

Project TypeKey AssetKey Asset

Other Forms

BaseBusiness

Spin-Outs

Value Arbitrage Criticality of WorkProcess standardization

Increased ownership

Time to market process Great Efficiency Client focus Choosing Right Service Provider

Other Components

ESO ESO –– In perspective In perspective

High DegreeHigh Degree CommitmentCommitment

High High Customer CostCustomer Cost

Very HighVery High

Highly IterativeHighly Iterative

Domain KnowledgeDomain Knowledge

StandardsStandards

Large NumberLarge Number

High DegreeHigh Degree

PlayersPlayers

Knowledge TransferKnowledge Transfer

FactorsFactorsMagnitudeMagnitude

ESO ESO –– In perspective In perspective

CASE IN POINT

AEROSPACE & AUTO INDUSTRY

ES ES -- Auto SectorAuto Sector ……

ES ES -- Aerospace IndustryAerospace Industry ……

Workforce Size & Availability

Geopolitical Factors

Training & Education

Government Policy &

Regulation

Attractive Sources

Engineering Services

Need for Alliances

Competitiveness

Language and

Cultural Compatibility

Work force

Cost

Threat Level

Highest

Medium

Low

Lowest

LANDSCAPING LANDSCAPING …….TALENT.TALENT

Physical Infrastructure

Domain and Industry Expertise

Engineering Infrastructure

National Aerospace Policy

Stick to Commitments

Create Pool of Tools

Public Awareness

Events and activities to Promote the

Aerospace Sector

Easy Access to Companies

Outside India

High Domain Knowledge

Going up the Value Chain

Curriculum Revamp

� Driven by offset environment

� Expanding Domestic Market

� Demand for high end sophisticated machinery

� Special Purpose Machines

� Cutting Machines

� Spark erosion Machines

� Chemical etching and Bending machines

Major Industry; Major Industry;

Aerospace & Aerospace &

AutomotiveAutomotive

Creating Creating -- EcosystemEcosystem

FEW THOUGHTS FEW THOUGHTS ……

1.1. Making policy formulation, reMaking policy formulation, re --hauling engineering education, filip to institutes like IIT hauling engineering education, filip to institutes like IIT

etc., is key for engineering developmentetc., is key for engineering development

2.2. Use talent that drives Use talent that drives –– DRDO, HAL, NAL, BEL and other defense PSUs leadersh ips for DRDO, HAL, NAL, BEL and other defense PSUs leadersh ips for

policy formulationpolicy formulation

3.3. Engaging aerospace specialists from western countri es Engaging aerospace specialists from western countri es

4.4. Development of aerospace engineers and database of relevant peoDevelopment of aerospace engineers and database of relevant peo ple ple –– thru PPP thru PPP

5.5. Industry regulator and attention by industry Industry regulator and attention by industry forafora like like NasscomNasscom , CII etc , CII etc

6.6. Creating a pool of tools and equipments that can be used, laboraCreating a pool of tools and equipments that can be used, labora tories, wind tunnels tories, wind tunnels

and lightning strike facilities, simulation environ ments etcand lightning strike facilities, simulation environ ments etc

7.7. Finally fly more and airlines should make flying ea sier on the pFinally fly more and airlines should make flying ea sier on the p ocket and the mind to ocket and the mind to

enable this enable this

Appreciate YOUR TIME!