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Global
excellence is a moving target. Companies have to constantly
innovate and reduce costs. On the one hand, they must
not only develop expensive new features to please consumers
but also improve their environmental and safety standards,
knowing fully well that cannot expect a simultaneous increase
in their price realisation. Customers always want something
more for less.
Achieving
excellence, which can meet global standards and expectations,
in not a new concept for India any more. Today, there
are at least 20 firms doing well in the global market.
Tata Motors sells its Indica cars to Rovers factory in
UK, Bharat Forge is the world''s second largest manufacturer
of forgings. Sundaram Fasteners has been ranked number
one supplier by GM 3 years running for its zero defects
which bear testimony to the world class capability here.
Automobiles
and auto components are high value industries. Between
1998-99 and 2003-04, India''s export of passenger cars
increased nearly five fold to 1, 26,000 units and two
wheelers from 1,00,000 units to 2,65,000 units. For the
first time, the industry exported auto components exceeding
one billion US dollars.
According
to McKinsey, India could capture up to $25 billion of
this amount by 2015, to become, along with China, Mexico,
and Thailand, one of the developing world''s top sourcing
bases.
Apart
from low costs, India''s auto components industry has the
advantage of skills in process, product, and capital engineering
owing to its long manufacturing history and higher-education
system. Also, India''s advanced tooling and machining industry
makes it possible to produce capital equipment locally
in a less expensive manner.
In
the pharmaceutical industry, firms like Ranbaxy, DRL bring
out affordable drugs to the world. Ranbaxy ranks ninth
globally in the generics drugs category and had bagged
the AIDS research funded by former US president Bill Clinton.
Even in the entertainment industry, India is making its
mark.
Toonz
animation based out of Kerala rated among the top 10 in
the world while Maya Entertainment played a significant
role in the production of recent Hollywood special blockbusters
like Star Wars, Mummy and Stuart Little. India has make
its mark in fashion industry beyond Aishwarya Rai and
now romps cat walks in Paris, Milan, London and New York.
While
these are important achievements, global excellence is
a moving target. Companies have to constantly innovate
and reduce costs. On the one hand, they must not only
develop expensive new features to please consumers but
also improve their environmental and safety standards.
They
must do all this knowing fully well that cannot expect
a simultaneous increase in their price realisation. Customers
always want something more for less. Especially, after
the downturn, they have realised that there is a buffer
somewhere that they can squeeze out, if they only look
for it hard enough. They have become extremely tough in
their negotiations.
The
other global trend that virtually spans all industries
is the desire to have fewer vendors on whom the customers
are willing to bet. It also helps them to drive them harder,
especially in the face of fierce competition. Clearly,
companies who will win will be those who have an excellent
record for delivery execution.
Delivery
execution is the end effect which depends on other components
including vendor management on one hand to customer relations
management on the other. Companies also have to contend
with the uncertainties of demand, complexity of the global
situations and just-in time manufacturing systems.
Information
Technology has a key role in connecting up all these parts.
It is like the nervous system in the body that senses
and responds quickly. Similarly, for organisations to
respond quickly to changing customer requirements, order
management systems must be able to capture the voice of
the customer throughout the supply chain. They must develop
lean, agile supply chains that meet complex production
delivery requirements. But information technology has
a greater role to play in building the health of the organisation.
To sustain in the long run, achieving global excellence
needs not only the quickness of a sprinter but the stamina
of a long distance runner. How information technology
is used becomes central to this.
It
may be useful to see how successful global companies have
used Information Technology for improving the success
of their organisations. Companies such as Charles Schwab,
Dell Computer, Wal-Mart, and other leading businesses
used IT to influence what really counts in their industries.
First,
they identified the productivity levers in their organisations.
For some, it was the numerator: number of units or value.
For others, it was the denominator, cost and effort. They
focused on what matters the most. Targeting specific productivity
levers.. Different industries have unique performance
drivers that are based on the products they sell, the
customers they sell to, and the costs associated with
conducting business in that sector. Companies that deployed
IT successfully not only clearly understood this but also
used IT to achieve great improvements in these levers.
Second,
leading companies invariably focus their IT investments
in one area: reducing interaction costs, which in most
businesses consume 40 to 60 percent of the staff''s time.
Coordinators, order-entry clerks, follow up staff, schedulers,
and many others who operate between the company and its
customers only add to the delay, cost, and error. Some
of these defects eventually damage credibility with the
customer.
Third,
Technological and management innovations were developed
hand in hand. Research shows that technological innovations
are typically of little use until complementary managerial
innovations bring them to life. Dell and Wal-Mart provide
good examples using this combination well. Wal-Mart''s
innovations in supplier relationships, for example, were
developed in tandem with its RetailLink information system
and its collaborative purchasing systems. Its innovations
in the day-to-day replenishment of its stores were developed
along with its applications for warehouse automation and
inventory tracking. Custom merchandising applications
facilitated the company''s innovations in store formats.
Technological innovation without corresponding managerial
innovation is like a car with a powerful engine but a
wobbly chassis. It cannot get far. Partnering with IT
companies that have offer not only technological breadth
but also a sound understanding of management can help
in leveraging the IT investment.
I
would therefore like to conclude that sustainable excellence
in a global environment needs more than technology or
even advanced Quality processes. We need a strong linkage
between what the Customer needs and what the organisation
can deliver with amazing speed and flexibility.
I
want to end by a funny little cartoon strip I came along
which illustrates this very well: A mother was out in
the garden when her five year old son ran to meet her.
He said, "Mother, there was a call for you half
an hour ago." The mother asked, "Who
was it?". The son said, " I do not know
her." The mother asked, "Did you not
ask her name?" The son replied, "I just
told her you will call back." "Did you
get her number?" asked the mother. The boy shook
his head. "We don''t know who she is, we do not
have her number, then how can I call her back?"
The boy smiled, "No problem. She is still holding
on to the phone."
This
is the truth about being in a global environment. One
has to be online and constantly in touch with everything
that is going on outside and inside. Excellence, after
all, is not an act but a habit.
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