Manufacturing & Services

Manufacturing  & Services

India’s technical capabilities and quality standards have, particularly in the engineering space, reached world-class levels particularly since the arrival in India of the Global Auto Industry. India offers engineering and R&D sourcing solutions to a whole range of European Engineering companies and their customers through outsourcing arrangements or a variety of offshore partnering strategies
It is generally possible to achieve 30-50% savings on UK/ European costs in “Same Quality Lower Cost” manufacturing and back-office services in India

Key sectors to benefit from an India manufacturing sourcing strategy are Engineering in general/ Forgings, Advanced Composites, Aerospace, Auto Parts, Pharmaceuticals, Chemicals, Textiles. Design, Engineering and Research related “Back-office” services use Indian graduates and professional resources such as architects, engineers, medical staff and lawyers.

Precise cost savings will depend on the industry sector, type of products/services sourced, the nature, structure and baseline costs of the onshore business, local offshore blend in people skills required, materials availability, location within India, the business model for engaging with local manufacturers and/or service-providers, quality control and risk management frame-work adopted, the underlying context of cost-saving goals, degree of interest and involvement of strategic senior management.

While low costs in India is a key attraction – many Western companies stay for quality and productivity related gains, a large flexible and enthusiastic labour force and the option of a 24 x 7 Indian operation

Considerations
To succeed in cross-border India Sourcing initiatives UK and European SME’s – as with Indian companies looking to overseas markets – must secure the crucial advantage of ground knowledge, local insights and expert advice. SME’s face many challenges in business planning, funding, contact networking, local work practices and cultural and language barriers.

Poor planning and insufficient due-diligence can crystallize unexpected local risks and liabilities, while cultural differences can present unexpected surprises that can threaten the entire strategy

Download “UK Growth By Offshore Manufacturing in India- Overview for Smaller British Engineering Companies. (LH-Blenheim, November 2006)”

 

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KNOW YOUR PARTNER, EMPLOYEE, LOCAL ADVISOR

KNOW YOUR PARTNER, EMPLOYEE, LOCAL ADVISOR

Of all risk factors, this is most crucial in managing market entry down-side risks. Clients neglect at their peril the history of personal and business conduct of local partners, employees and advisors, their modus operandi with foreign partners, successes and failures, their cultural leanings and tactics, conflicts of interest, and even political affiliations.

A common mistake is to take no steps to uncover these ‘soft’ aspects – particularly in the face of intense friendliness, bonding and warm hospitality for which Indian business culture is well known.

Knowing your local partners can be a complex, multi-layered and prolonged effort throughout the life-cycle of the relationship

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