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28
th
June 2013 Release

CII & BMGI Presents Manufacturing Innovation Conclave

As the knowledge partner for Manufacturing Innovation Conclave, held in The Taj Palace, New Delhi
on the 21
st
June 2013, BMGI presented how Innovation can lead to an exponential growth in the
manufacturing. The event was organized by Confederation of Indian Industry (CII) that works to
create and sustain an environment conducive to the growth of industry in India.

The event comprised thought leaders from across the world with senior management
representations from reputed organizations like Tata Quality Management Services, Hero Motor
Corp, DataWind Ltd, Siemens, HCL Infosystems, Jabil Global Services and Robert Bosch Engineering
India, to name a few and representations from industrial & governing bodies like National
Manufacturing Competitiveness Council, Government of India and CII Haryana State Council

The event was organized into four sessions. While the inaugural session looked at the need for
innovation in Indian manufacturing industry, the second session reflected how innovation is a new
paradigm for growth. A panel discussion to explore if making India the factory of the world through
innovation followed in the post lunch session and the closing session focused on innovation beyond
product to solution.

Should India be the factory of the world or Germany of the East? Setting the context for the
inaugural session, Mr Arvind Kapur, Chairman, Regional Committee on Manufacturing
Competitiveness, CII North Region, welcomed the audience and introduced the speakers. He opined
that the labour arbitrage will not last too long and the only way India can retain the competitive
advantage is through innovation. Sharing, the percentage GDP spends on Innovation across the
world, he ascertained that while India is an entrepreneurial company, she is not an innovative nation
with only 1% or less of her GDP being invested in Innovation. He conveyed that CII along with the
Government of India, represented by the department of Science and technology has initiated a pilot
project called Global Innovation & Technology Alliances (GITA) with a vision to strengthen Indias
Innovation ecosystem and to enable effective institutional mechanism for driving innovation and
provide end to end support for the same. He signed off saying that we need to innovate so that India
can become solution providers to the world and not just suppliers to the world.

With the GDP growth touted as the slowest in a
decade, how would the manufacturers react?
Mr Nirmalya Banerjee, Business head, BMGI
probed the audience with a teaser and asked
them if it was through cutting costs? He said
that in cutting the costs, solution is denied to
the customer and it is the customer who stands
to lose. The other option is to focus on growth
and this growth is possible through innovation,
he added. With the average company lifespan
reducing consistently, the process of growth,
Mr Banerjee said, can only be supported by
Innovation as he shared how Innovation can be
incubated in Indian Manufacturers. Illustrating
the S Curve which, outlining four growth strategies, he contrasted the differences in thinking process
between the traditional and the innovation based thought. He stressed the innovation based
thinking which involves the concepts of Job To Be Done and identifying the opportunity for
Mr Nirmalya Banerjee,
Business Head, BMGi
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innovation based on the outcome expectations. He presented the structure of Rapid Innovation
Events (RIE), which is BMGIs unique methodology to bring concepts to action.

The key note address was delivered by Mr Sunil Sinha, CEO, Tata Quality Management Services.
The drivers of innovation are sector independent He shared that the returns on Investment for
Innovation post the melt down in 2008 has been encouraging and sees no reason why the
organizations wouldnt invest in Innovation. He alerted on the traditional practices of being risk-
averse, lengthy product development times and inadequate metrics for measuring improvements.
Sharing that the difference between service and manufacturing is continuously blurring and given
the fact that about 1.8 bn new consumers will enter the world, 15 years from now, Innovation has to
be at the centre of the strategy for organizations to grow. He observes the trend in innovation is that
it begins from innovation looking at in-ward and will lead to market driven innovation as the
economy matures. He shared the groups commitment to innovation when Tata Group Innovation
Forum (TGIF), chaired by one of the directors of Tata Sons, was created around 2007 to create an
environment for fostering innovation and improve innovation capability of group companies. He
shared the six factors that will drive innovation in Tata Group Democratizing Innovation, Insights
leading to Innovation portfolio, Risk taking big hairy audacious goals, Collaborations, Tools &
technologies (DIRECT). He outlined the challenges faced and initiatives taken by Tata to empower
the line managers and bringing innovation across the hierarchy. He summarized what Mr Tata
thought was the secret to innovation, Take up a seemingly impossible task and make a public
announcement about it. Mr Sinha concluded emphasizing the manufacturing industry to take more
risks and celebrate failures.

The chief guest of the event, Mr Ajay
Shankar, Member Secretary,
National Manufacturing
Competitiveness Council,
Government of India felt that the
timing of the event is pertinent and
echoed the fact that the wage
arbitrage advantage is going to be
short-lived urging the need to focus
on the long term. He observes that
while many successful global MNCs
have their R&D centres in India the
products they develop are not for the
Indian market. He points that this
shows that India has the ecosystem
and the infrastructure available, but, this needs to be tapped and parallel systems needs to be
created. He indicated that despite the wages in both China & Germany being higher than its closest
competitors, they end up manufacturing much more than India. He echoed Mr Nirmalya Banerjees
thoughts on focusing on growth and not on cost cutting and urged the industry to look at innovation
as the central theme. He reinforced that the culture of celebrating failures is important and
suggested that it needs to seep through the government as well. He signed off by saying that it is not
only large enterprises like TATA that can have an infrastructure for innovation but all organizations
must innovate for survival first and then for growth.

Mr Ramesh C Jain, Past Chairman, CII Haryana State Council & Former Group Vice Chairman, Eicher
Group provided the summarized the inaugural session and provided the concluding remarks, paving
the way for the second session that was chaired by Mr K N Rattan, Former Executive Director,
Shriram Pistons & Rings Ltd,
Mr Ajay Shankar, Member
Secretary, National
Manufacturing
Competitiveness Council
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Speaking on the topic Intellectual Property (IP) and the way of fuelling innovation & growth, Mr
Andy Sherman, Executive Vice President, General Counsel & Corporate Secretary, Dolby
Laboratories, Inc (USA) shared how Dolby is changing the customer experience. He explained that
the tone for innovation was set by the founder who began to think ways of in which the unwanted
noise can be eliminated in a recording. Mr Sherman took the audience through Dolbys journey of
Innovation. Interestingly, Dolby has almost never advertised its product and is still doing well; the
reason for this, Mr Sherman said, is the innovation Dolby delivers. He opined that in order to
reinvest in the next cycle of innovation, one would look at protection of the intellectual property and
monetizing the patent assets. Mr Sherman outlined the way Dolby manages their intellectual
property that is, in three interrelated categories Creation, Commercialization (and licensing) &
Protection. Creation involves creating patent assets through a lot of experimenting & failures; while
the functional coverage is important, he shared that Dolby looks at international coverage for
protection as investments. Commercialization involves approaching the global entertainment
industry in 3 major categories working with the content producers to encode using Dolbys
formats; distribution community to ensure they have the tools to present the content in the
intended way and third, he shared, the manufacturing community.

Mr Sherman shared the important questions that lead them to innovation which would be
applicable to every business: what are the incentives to choose us to operate on a partnership and
to view as an economic benefit to pay for the use of technology. What are the types of relationships
that we need with the partners? How do we deepen the technical relationships? How do we make
the next level of technology available to them, make them more competitive, how do we make it a
better business model that we make them work with us that respects our intellectual property, the
second being the use of technology itself to protect intellectual property and third, law enforcement
& litigation, he signed off saying this would be a last resort.

The next speaker Mr Suneet Singh Tuli, CEO and co-founder of DataWind (Ltd), highlighted that
innovation is not about creating the breakthrough product, but is about understanding the
opportunity. He compared the growth of internet adoption and the cell phone adoption in the world
and pointed at the gap between the two that started to increase a few years ago and stands today at
3 Billion people. Mr Tuli believes this is the largest opportunity that one can imagine and this is gap
is primarily because of affordability. He added that Innovation requires understanding the point of
pain and the customer difficulty that needs to be resolved. He went on to identify that an
improvement in the product performance alone is not sufficient and innovation is only successful is
when the user consumes the product or service. He stressed on the importance of having a product
/ service that is good enough to which eventually the mass market would move towards and
towards this effect improving the product performance makes little difference. Sharing that the
most important question to answer in an innovation is Will the customer buy it? Citing the
example of how it is easy to miss the country borders in Europe and how we are reminded about the
borders in India even if the goods have to be moved from Delhi to Noida, Mr Tuli stated that for
India to be competitive as anybody else in the world, the little things like this needs to be addressed.

Mr Gautam Datta, Director, Marketing, Siemens Industry Software India, spoke largely about the
initiatives most manufacturing organizations have taken in todays economy and how digital
manufacturing can help in achieve manufacturing innovation. He spoke about leveraging digital
technology available to shorten the design, simulation & piloting cycle so much that it would offer
high flexibility in the process. The digital manufacturing would ensure no parts would be missed.
There is technology that is available which can help resource allocation including balancing the line
in a changing product mix scenario. This will enable concurrent design and operation planning which
leveraged well will help achieve better throughput.

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How can innovation help organizations facing stiff growth challenges? Mr Vikram S Kasbekar, Senior
Vice President & Head Operations & Supply Chain, Hero Motor Corp Ltd., addressed this through
his talk. Given the little difference between technologies in 2 wheelers or 4 wheelers, the challenge
is creating value from various ideas that we have and do it really quick. He stressed on the need for a
systematic approach towards innovation and the organization that has this would help the
organization during the difficult times and this could well lead to a quantum leap. He shared his
belief that the process brings the best quality. The question we have to ask ourselves today is: how
do we make the best use of the talent that is with us. Until and unless India looks at development on
its own and not depend on others, we will not get far. While the net cash flow may be an indicator,
the innovation premium decides how it impacts the cash flows and approach to the objective the
organization believes in.

Mr Nirmalya Banerjee flagged of the panel discussion on the topic Making India factory of the
world can Innovation make that happen? by putting across the following questions: We have the
intellectual potential. Can we become hub of future manufacturing? And are we going to beat China
and emulate Germany in east? How and whether to make India as a manufacturing hub?

The panel was resoundingly aligned in their thoughts that India doesnt have a choice but to become
a hub because of the social dynamics prevalent. Mr. Tuli suggested taking advantage of the 1.2
billion population of India. He cited the example of India in 1983 when the economy was double the
size of China. In 30 years since then, Chinese economy is 8 times the size of India by focusing on
manufacturing. He reinforced saying that unless we start manufacturing locally, we wont be able to
innovate and wont discover the hurdles and Innovation will reside somewhere else. Mr. Rattan
suggested that the first thing that needs to be changed is the leadership at all levels since everyone
talks about innovation but no one is ready to walk the talk. Mr. Salunkhe concluded that the real
challenge is scaling up the current model of manufacturing. Anything that we do should be done
locally in a Jugaad way.

Nirmalya steered the
discussion by pointing out that
the west is known for their
structured way of innovation.
He went on to further pose the
question of how can Indians
who are known for their
creativity channelize this to go
to the next level? Also, as
Jugaad innovation is usually
triggered by crisis, what can be
done to make it a habit?
Further, is there a difference between the larger organizations and SMEs in the way they look at
innovation?

Mr. Vidyarthi responded by pointing out that Indians actually hate processes which compel them to
use Jugaad. Taking the example of Jabil in India that is a big organization, he stated that most
processes are built in India and there is a strict adherence to the same. Jugaad may be violating the
process and unless we learn to adhere to best-in-class processes, it is difficult to become a
manufacturing hub. Mr. Tuli stated the importance to learn to fail and willingness to take risks. He
gave the examples of the introduction of the first version of Microsoft Windows as well as the Apple
tablet that was decades back compared to their actual market release. He concluded by saying that
if you start two companies in India and failed, you are considered a failure whereas in Silicon Valley,
Panel Discussion
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you are considered experienced in a similar situation. The way to make innovation a natural thing
and not a crisis-driven process is by stopping to penalize failures. Mr. Rattan opined that Indians are
not fact and figure oriented and also not process oriented. It is important for us to learn from
failures and also improve our Reward and Recognition mechanisms.

In response to an audience member query on making India Germany of the east, what should some
of the game changing initiatives and steps be to leapfrog India from a Jugaadu nation; Mr. Vidyarthi
suggested that most of the problems are fixable internally. Further, it is the organizations
responsibility to develop the capability that they require for manufacturing.

The concluding session focused on innovation beyond the product and the session chairman Mr
Vishnupriya Sharma, Senior Consultant, BMGI set the context and introduced the speakers.

The first speaker Mr Jai Chandra Jha, Vice President Manufacturing, National Engineering
Industries, spoke about how business model innovation helps in the time of turmoil and continues
to provide a rapid growth. He shared that a business model innovation articulates the logic in the
business and looks at creating value, capture value & deliver value to customers and innovation itself
generates knowledge in the organizations. He reiterated that the era of Jugaad, the fixing problems,
is gone and we have to look at taking proactive actions. He went on to share the business model at
NBC and continue to sustain growth.
Recounting the achievements of NEI, he
shared eight segments of the canvas
through which business model was
looked at. The eight segments, he
outlined, were: key suppliers, key
resources, key activities, cost structure,
customer relationships, customer
segments, distribution channels and
revenue streams. He went on to describe
specific actions taken by NEI under each
of these segments, like having a strong
reward & recognition systems or having a value proposition for the suppliers. He spoke about
looking at suppliers as partners and key resource where value will be created. He concluded
emphasizing that business model is a dynamic structure and perhaps more important than focusing
on product and process innovation alone. `

The next speaker Mr Manish Saxena, Country manager Global Services India, Tata Technologies
Limited, articulated how technology can be leveraged to innovate. He identified two things which is
a need in manufacturing facilities for planning the operations and managing the operations. He
took the audience through the suites available which will ensure there is a single source of truth in
this case the data and how this should be leveraged and made available at the point where it would
be needed. He signed off saying that the while innovation plays the front end role and ensures that
the technology is integrated for congruence and synergy in business and product strategy.

Mr Ashok Vardhan, Territory Manager Asia Pacific, BD Group, Indo-US MIM Tec, showed what a
process innovation would mean. He explained the Metal Injection Molding process that radically
changes the metal forming process, the advantages of which is a high reduction in forming time,
reduced number of process steps amongst others. He explained graphically with examples how this
can reduce the effort required in metal forming through MIM, the background of the MIM
technology and how people around the world are rapidly adopting this technology of metal forming.

Participants, Q&A in progress
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The last speaker of the event, Mr Pranava Tripathi, DGM Strategy Management, Robert Bosch
spoke about creating innovative organizations. He defined innovation as channelizing creativity
towards the organizational mission and this channel needs to be protected and supported well
through market intelligence, understanding the consumers of the product / services, understanding
what technology is available. He opined that in a strong innovative culture does not have the
concept of a failure and cited the examples of the Viagra and the Post-it, which was born out of
failures. Describing various states in which organizations exist, he pointed to that organization which
works for a mission, everybody is positively challenged, In order for the right environment for
innovation, it should start from the top with leadership defining how much of the business should be
a result of the innovation. Every department should have a very well defined goal and work towards
a unique competitive advantage and should set aside budgets for innovation. He then shared the
structure for innovation within Robert Bosch, adding that roles and responsibilities should be very
clear. He signed off by saying that innovative organizations would be flat where the ideas would
directly reach the senior leadership.