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Dear A vibrant manufacturing sector will be critical for accelerating and stabilizing Indias journey on a highgrowth trajectory. While the domestic manufacturing sector boasts of a tremendous potential, its contribution to nations GDP and its share in global manufacturing over the last decade has been stagnating. We are now in an era in which the strategic importance of emerging markets in the global manufacturing value chain is on the rise. Interestingly, Indias macroeconomic performance during the recent global financial crisis has cemented its stature, as a stable investment destination amongst emerging economies. Parallely, business opportunities resulting from an unfolding demographic transition, disruptive innovations across sectors and breakthroughs in information and communications technology has transformed India into a preferred manufacturing destination. At Accenture, we are keen to understand your strategic priorities, as you expand and grow with the India in your manufacturing journey. We are keen to know the degree to which you are willing to invest across various areas at the firm-level to achieve the strategic priorities of your enterprise. Given that many of you engage with a host of small and medium enterprises, we want to understand your expectations from them, as they grow with you. In order to deliver robust and relevant analysis, we are conducting a survey of over a 100 CEOs leading large companies across 10 key manufacturing sectors. We will be processing the data collected from this survey to design strategies which can be deployed by manufacturing entities to grow profitably with India. Please note that the survey does not aim to gather confidential data or numbers. Moreover, the findings of the survey will not be utilized for any other purpose except to deduce relevant insights for the research report. The findings of this study will be presented by Accenture at a publicly held event during June-August 2011. We will be glad to share a free copy of the report, drawing inputs from this survey, as a token of our appreciation for your participation in this exercise. Moreover, we will be glad to invite you at the event organized to launch this publication. In case you are not in a position to provide time for the survey, we request you to kindly nominate a person you deem fit for this purpose. Seeking your kind cooperation and inputs, Yours faithfully

Sanjay Dawar

Managing Director, Supply Chain (Asia Pacific) Accenture

Section 1: About your company (to be filled before the survey by the surveyor) Description of the respondent Board member CEO/President/MD CFO/Treasurer/Comptroller CIO/Technology Director SVP/VP/Director Chief Innovation Officer Other C-level executive Other (please specify) Annual revenue India operations of the respondents enterprise (US dollars) US$200m to US$500m US$500m to US$750m US$750m to US$1bn US$1bn to US$5bn US$5bn to US$10bn US$10bn or more Companys primary business Fast moving consumer products (FMCG) Consumer durables Pharmaceuticals & Life sciences Chemicals Industrial Equipment Automotive Oil and Gas Metals & Mining Cement Textiles & Garments No primary industry Diversified/Conglomerate Other (please specify) Key markets for products manufactured by your company in India? Only India Only markets external to India (as a contract manufacturing/Export Oriented Unit) India as well as external markets

3 SURVEY ADMINISTRATION BEGINS FROM SECTION TWO Section 2: Macro context 1. Do you think India is becoming an increasingly attractive base for manufacturing? Yes (please go to Q2 and continue) No (please go to Q3) 2. What drives you to manufacture in India? Access to low-cost labour Adequately liquid and efficient capital markets Access to skilled labour Access to high-end skilled talent (managers and engineers) Proximity to expanding domestic consumer market Rising wages in other Asian economies (e.g. China) Proximity to other Asian consumer markets Favorable regulations (e.g. Tax incentives) 3. The top three challenges of manufacturing in India: Poor infrastructure High transaction costs Poor work culture Corruption Lack of policy coordination High raw material costs High training cost Inadequate skills among low-cost labour Insufficient access to capital Other _________ None 4. Indias future global competitive advantage will lie in the manufacturing of (Please all relevant options): Hi-tech products (e.g. super-critical reactors, submarines, jets, tablets etc.) High-end manufactures (e.g. knowledge chemicals, automobiles, consumer durables, FMCG products etc.) Intermediate products (e.g. steel, processed metal products, textiles, autocomponents etc.) Specialize in servitization (e.g. pairing products with complementary services machine tools with added services) None

4 Section 3: Your current performance and strategic priorities for future 5. How do you rate your current performance on key manufacturing metrics? Performance Key manufacturing metric 0% - 30% Poor Percent overall throughput
(Percentage of total output produced at a plant over a unit of time [e.g. an hour] relative to its full capacity)

31% 60% Fair

61% 70% Good

71% 90% Superior

91% 100% State-ofthe art

Customer commitment
(The number of time the firm has been able to deliver timely output to the satisfaction of the customer across total customer deliveries)

Overall equipment effectiveness (Performance of

manufacturing unit relative to its designed capacity, during the period when it is scheduled to run)

Asset utilization
(The ratio of actual output to the output that could be achieved if a plant ran at its maximum capacity for 365 days per year while producing 100% quality product.)

Material efficiency
(The performance of existing manufacturing processes towards maximizing value from lower quantum of raw materials compared to previous measures)

Percent production to plan

(Percentage times production is in accordance with the scheduled plan)

Delivery to schedule
(Orders delivered on time)

Uptime versus scheduled

(Number of times the plant has been operated in accordance to planned run time)

Downtime versus scheduled run time (Number of times the

plant has faced unplanned outages during its scheduled operating time)

Workforce satisfaction
(Percentage employees satisfied with work environment)

5 6. Which one of the following best defines your firms primary competitive advantage (please select only one option) At present In three to five years Delivering relatively similar value Delivering relatively similar value to to customers at a lower cost. customers at a lowercost Delivering unique or greater value Delivering unique or greater value to to customers customers 7. The strategic priorities for your companys Indian manufacturing operations over the next three to five years are: Launching new products Entering new consumer markets Positioning in terms of percentage Key part 0% - 30% Poor Financing Technology Innovation infrastructure Supply chain Talent/workforce Customer base Partnerships and collaborations Scaling capacity Raising productivity Becoming climate friendly Building future workforce Reaching new standards of quality Others ______ 31% 60% Fair 61% 70% Good 71% 90% Superior 91% 100% State-ofthe art

8. How well are key parts of your business positioned to execute these priorities while operating in India?

Section 4: Action agenda 9. Areas wherein your company needs to improve performance to achieve its priorities: (Please relevant options) Within a Within 3 Between 3-5 Not a Areas year years years priority Brand equity Speed to market Understanding of customer expectations Risk management Product innovation Business model innovation IT capabilities Talent management Financial management Quality assurance

10. Actions your company will take to improve brand equity in the Indian market: (Please against relevant options) Withi Withi Betwe Not a Actions na n3 en 3-5 priori year years years ty Source extensively from Indian small and medium enterprises Establish manufacturing units in socioeconomically deprived areas Develop new products for bottom of the income pyramid markets Diversify existing product basket to enter new market categories Collaborate with new players to deepen presence across customer segments Acquire or merge with entities helping expand presence in markets Leverage the proclivity of Indian mind towards jugaad to innovate Significantly increase expenditure on advertising and promotion Invest in greening value chain (e.g. using fuel efficient technologies)

7 Up-skill youth from rural and remote areas to join workforce Other_____ None 11. Measures your company will adopt to enhance speed-to-market in India: (Please relevant options) Betwe Withi Withi Not a en 3Measures na n3 priori 5 year years ty years Enhance the level of transparency across the supply chain Develop collaborative supply chain solutions Provide detailed visibility across multiple tiers of supplier networks Set clear goals across network of suppliers on process/product standards Engage with tools facilitating management of complexity across tiers Invest in developing a geographically dispersed distribution network Establish innovation networks involving vendors across tiers Invest in creation of high-fidelity knowledge exchanges across tiers Other ________ None

12. Actions your company will take to deliver something distinctive to Indian customers: (Please relevant options) Within Betwe Within Actions 3 en 3-5 a year years years Manage external government stakeholders (e.g. regulators) Manage supplier relationships Detect acquisition targets and execute on merger integration Manage customer interaction Manage outsourcing (contract manufacturers) relationships Innovate and develop new solutions Manage post-production partnerships (e.g. distributors, sales) Market product and services Achieve greater differentiation from competitors in offerings Other____ None

Not a priorit y

13. Steps your company will take to strengthen risk management capabilities: (Please relevant options)

8 Steps Investing in systems and processes to monitor risks Strengthening risk assessment processes Setting risk committee roles and responsibilities Developing a strong culture and awareness of risk across the organization Developing formal process for identifying and communicating new areas of risk Developing systematic framework for enterprise risk management Investing in IT systems that support aggregation and analysis of risk data Alignment of risk management with internal audit processes Other ________ None Within a year Within 3 years Betwe en 3-5 years Not a priorit y

14. Actions your company will take to launch new products catering to market: (Please relevant options) Within Within Actions 3 a year years Acquiring other companies with specific R&D expertise Deploying open-source innovation platforms to codevelop products with business partners Locating R&D centers close to new customer markets Partnering with universities in India

the Indian Betwe en 3-5 years Not a priorit y

Using analytics capabilities to more effectively guide R&D investment Using new technologies (e.g. cloud computing) to aid in the transfer of ideas across the organization Implementing new talent management processes to encourage innovation Other ________ None 15. Features of the business model innovation that your company will implement in the Indian market: (Please relevant options) Within Betwe Not a Within Features of the business model 3 en 3-5 priorit a year years years y Can be characterized as disruptive and not incremental Will address wants of low income groups Will drive profitable growth through higher volumes Will bring in individuals from low income populations into the distribution channels Will help the company mobilize resources whenever the need arises Will facilitate decentralized decision-making

9 Will result in substantive savings of natural resources Other ________ None 16. Steps your enterprise plans to adopt to improve your talent management capabilities in the Indian market: (Please relevant options) Within Betwe Within Steps 3 en 3-5 a year years years Use innovative recruitment tools (e.g. Mobile, social networking) to improve connect with potential employees Invest more heavily in up-skilling programs for existing employees Invest in training for HR personnel Hire talent that believes in innovation Implement new rewards-based processes and pay structures to improve retention of the best talent Other _________________ None

Not a priorit y

17. Drivers of your IT/ITeS related investments in India: (Please relevant options) Lowering costs through new technologies (e.g. cloud-computing services, digitization) Finding ways to share information and data with external customers and innovators Obtaining more and better data Having better data-analysis capabilities Exploring forms of customer-driven marketing (e.g. social networks, blogs) Creating processes/platforms for feeding external ideas directly into your innovation process Doing business over other companies business platforms Adopting/promoting open industry standards (e.g. for interoperability) Creating a business platform on which other producers can operate More efficient ways of working (e.g. online training, team collaboration across various geographies) New possibilities to collaborate with other players in the value chain

18. Reasons compelling your enterprise to adopt measures towards improving financial management while functioning in India: (Please relevant options) To use existing capital more efficiently To hedge increasing cost of capital To meet stringent financial standards of regulators in relevant geographies Improve perception amongst shareholders Improve perception amongst lenders

10 Improve internal rate of return (IRR) Corporate Governance Other None 19. Actions your company will take to improve quality assurance standards while manufacturing in India: (Please relevant options) Betwee Within Next 3 Not a Actions n 3-5 a year years priority years Adoption of processes such as ISO 9000 or Six Sigma Development of a company-specific quality manual adhering to global guidelines Installation of state-of-the-art testing and inspection equipment to ensure zero-defect shipments Institutionalization of a mechanism to handle product recall and reverse logistics Third-party certification to evaluate and periodically review performance Other None

Section 5: SMEs and contract manufacturing 20. Top three benefits your company has experienced or looks for when outsourcing some aspect of operations in India? Greater flexibility Faster delivery of products and/or service to market

11 Lower costs Access to specialized talent and expertise Higher customer satisfaction Higher quality products and services Ability to gain greater focus on your core business Other________ None 21. Top three capabilities you look for when choosing an SME partner in India? Focused R&D Problem solving and open mindset Closely knit employee pools Leaner organizational setup Ability to learn and implement quickly Low-cost operations Strong customer focus Other (please specify) 22. Top three capabilities you would want SMEs in India to develop in order to foster a productive collaboration? Innovation focus Talent management IT, automation and technology focus Financial management Customer relationship management Environment friendly production methods Risk management Environment friendly value chain Quality consciousness Professional management culture Other (please specify)

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