Make In India Framework for a seamless approach

National Conference on deriving a seamless approach to achieve

Make in India (MII) a Practical Reality

An Integrated Framework for accelerating the Make In India Thrust

( modified version of talk) delivered on Mar 24, 2017 by Dr. P. Balasubramanian, Ph.D.

Founder & CEO, Theme Work Analytics, Bangalore at MSRIT, Bangalore, 560054 India

[email protected]

mailto:[email protected]?subject=

The Make in India campaign

Make in India(MII) & Make for India (MFI)

❖ Started in Sept 2014 as a major GOI initiative

❖ To give a collective thrust to manufacturing sector; to make India a global manufacturing hub

❖ To create jobs and to revive growth in economy

❖ To retain international investor interest in India

The Make in India campaign


❖ How will this be accomplished?

❖ By facilitating ease of entry and investment through removal of policy and process constraints

❖ By enhancing investments in transportation, energy and other infrastructure sectors

❖ By Building skill sets, by fostering innovation, and by protecting Intellectual Property

The Make for India proposition


asks for focus on domestic markets and less reliance on export markets

To create a positive cycle of higher demand and higher supply of goods in India leading to higher production and sales.

Hence will lead to higher income for indian citizens; help to improve and rebuild skill sets.


Hence these two propositions are not mutually exclusive or contradictory. They are by and large complimentary.

They differ however on one major aspect, viz the export thrust.

MII seeks to make India the global hub for manufacturing while MFI’s focus is to develop the Indian markets and economy


For a comprehensive discussion on this topic pl. refer to my earlier presentation at

https://www.slideshare.net/ParasuramBalasubrama/make-in-india-make-for-india-43827170

India 2013: GDP Composition by Sector

India 2013: Labour Composition by Sector

Make in India(MII) :Magnitude of the challenge

Most farmers are in low income segmentAnd not enough employment in Manufacturing


We need to create millions of jobs, year after year


We need to create many

more manufacturing and high end services jobs, year after year

More than 10 million per year!


We need to improve export performance

significantly and bring a balance between

exports and imports.

Import of petroleum products can hardly be reduced but machinery, defense equipment etc. can be brought down through MII initiative.


He showed that production and supply must result in local employment so that demand is created within that society and

income is generated to pay for the goods and services..

Say's Law of Market : J.B. Say was a French economist in the 18th Century.

Hence MII has to go hand in hand with MFI

Law of comparative Advantage

David Ricardo, in 1807, enunciated this principle.

Consider two countries A and B, whose citizens need both food and clothing.

Country A people are smarter than Country B. They are more productive than B in producing food and clothing. The productivity difference is higher in food compared to clothing. But they have enough resources to produce only one of them.

Then Ricardo showed that people of both countries are better off if Country A produces food and Country B, clothing and they trade with each other.

Cooperation leads to Win Win for both and a country that produces high value added goods stands to benefit more.


Make in India(MII) becoming a practical reality)

◆ Enormous capital outlays

❖ Prioritization in selection of thrust areas

❖ Judicious choice of markets to compete

❖ Enhancing quality and productivity of all resources on a continuing basis

❖ Fostering innovation all spheres

Building high quality infrastructure, smart cities, enhancing skill sets of millions of citizens and

creation of high end jobs call for

Hence we as a nation need an appropriate framework to guide all decisions


Thrust area identification

Initiatives Projects

Resources

Impact Metrics,Assessment

Models,Decision Tools

Framework to Guide MII Efforts


Impact Metrics

❖ New jobs Created❖ Per Capita Income Growth❖ PPP❖ Economic Growth Rate❖ Income Disparity Reduction❖ Wellness Indicators

Sector wise metrics to be agreed upon; Time bound targets to be set;Targets to be made transparent;Target achievements to be measured and reported in regular intervals

Example


Assessment Models

Needed to identify system linkages and to evaluate the impact of resources allocated to projects using selected metrics

Predictive and Prescriptive Models needed to select high impact projects at optimal use of available resources.


Decision Tools ( are needed)

❖ To identify thrust area and initiatives

❖ To select projects

❖ To execute with focus on quality and productivity

❖ To come up with disruptive solutions

Value Chain Analysis

Cost Competitiveness Assessment

Quality Focus

Innovation Thrust

>>

>

>

Four key tools are selected

Make In India

Value Chain

Analysis

Cost

Com

petitiveness

Quality Focus

Innovation Thrust


The Four Pillars represent the four major sets of tools to be used.


❖ VCA helps to determine the value add at each stage.

❖ Industry and product market segments for engagement can be identified.

❖ Effective National and Regional Skill Building missions can be selected.


Where can we add value with the resources we have?



GOI, MEA and Industry bodies such as CII, FICCI, Chambers of Commerce must work together to identify thrust areas

Assured supply of natural resources at stable prices is a critical factor.


CCA helps firms to select markets and products to compete

Guides make or buy decisions at component levels.

It facilitates policy reviews and changes at the government level to enable an industry to compete.

(Make in India(MII) becoming a practical reality)

What are our competitive strengths? Which markets to enter with our competitive

strengths?



Total Cost ( and not component

costs or manufacturing

cost) determines the

competitiveness

Many a time it becomes a vital tool to argue in international fora about fairness of competition

Industry Associations must guide member firms to collaborate, share data and resources

The Quality Focus

optimal plant level quality optimal customer level quality

Quality journey mandates that the firm moves towards the reliability optima.

( Make in India(MII) becoming a practical reality)

The Quality Focus

❖ Products can differ in functionality

❖ Services can be bundled or unbundled with Products

❖ A product can be offered at multiple price points by varying functionality and other sales approaches. Lower price must not imply lower quality.

❖ At each price point however, the product must come with the best quality

Lack of consistency of product quality has turned out to be the major issue in export markets


The Quality Focus

❖ For every product, parity between price, features and agreed quality level must be maintained with consistency.

❖ Techniques and approaches such as Six Sigma and Malcolm Balridge help firms to accomplish the above objective ; and also to effect continuous improvements.


ISO and SEI-CMM Certifications play a significant role in delivering consistent service

quality

The Quality Focus

❖ Most products have a service component attached and vice versa.

❖ There has been little focus on improving service quality.

❖ Services, often performed with large human component, are rarely measured and subjected to quality and consistency measures.


GOI can lead by example by publishing Service Level Agreements for all its citizen focused services

The Quality Focus

❖ Cost Competitiveness can be maintained when productivity measures travel together in any quality journey.

❖ Consistent quality fetches a premium in all markets.


ISO, NPC and industry organizations need to work together in setting standards, certification, training

and assurance services.


The Innovation Thrust

❖ import substitution, new product introduction, market penetration and dramatic reduction in cost of goods are achieved through innovation.

❖ Both product and service markets are currently experiencing severe disruptions due to digital and bio tech innovations.

❖ India is very well poised to take advantage of this opportunity.

Electronic Voting Machines from India

Innovation Thrust can add a multiplication factor to Cost Competitiveness and Quality Focus as well.


The Innovation Thrust

IPR regulations need to be streamlined with urgency by GOI

❖ The need of the hour is to align projects and initiatives at CSIR and other Labs, IITs and other institutions to the MII mission.

❖ Coordinate the NSDC activities to 25 sectors identified within MII and select training programs to infuse the spirit of innovation.

❖ Facilitate market innovation through private sector at regional and local levels.

The Framework

❖ Can be used to tie Digital India, Start Up India, Skill India, Smart City, AMRUT,PMJDY and MEA initiatives with the MII objectives.

❖ Impact models of initiatives can be built by evolving metrics and using tools related to the pillars

The Framework can be further developed to integrate it with the national policy and budget.



Thrust area identification

Initiatives Projects

Resources

Impact Metrics,Assessment

Models,Decision Tools

Framework to Guide MII Efforts


NEW DELHI: More than 60% of the eight lakh engineers graduating from technical institutions across the country every year remain unemployed, according to the All India Council for Technical Education

Manash Pratim Gohain | TNN | Updated: Mar 18, 2017, 02.11 PM IST

Utility of the integrating Framework

Demand Supply

mismatch needs to be

bridged

An Integrated Framework for accelerating the Make In India Thrust

( modified version of talk) delivered on Mar 24, 2017 by Dr. P. Balasubramanian, Ph.D.

Founder & CEO, Theme Work Analytics, Bangalore at MSRIT, Bangalore, 560054 India

[email protected]

Thanks and Best Wishes

mailto:[email protected]?subject=

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Make In India Framework for a seamless approach