GE India CEO John Flannery affirms that the country is at an early stage of devel opment and GE has a number of solutions for its growth problems in an interaction with virat bahri of B&E
B&E: India's manufacturing capabilities have often been criticised on a general basis and comparisons have been drawn with China. What has your experience been?
JF: I think it is on a case by case basis. There are industries and companies that are more advanced than others. India is on a strong platform in terms of manufacturing capability, some of the service and technology sectors are advanced. We have a very high opinion in this sense of the capability of a company like Triveni. We see a lot of instances like that. It is changing very rapidly. So I think that the notion that China has a manufacturing capability and India does not is getting very stale and very generic. Obviously all those things are also tied up with the infrastructure development. Rail transport, moving materials around, et al are connected with efficiency in production. I think the government is very publicly and aggressively channeling resources into that and I don’t think that there is any debate on whether that needs to be done or the benefits of doing that. So we at GE are very bullish on all that is happening in the country.
B&E: What are your main considerations while looking for a JV partner for local manufacturing?
JF: Our primary strategic objective as a company is to make our business more local and ensure we have the right products at the right prices reaching the right customers. So we look at partnerships in that context – how can they help us either on the product side, manufacturing and supply chain or in distribution. Beyond that, we also look for companies with excellent management and with a business philosophy which is compatible with our approach.
B&E: You talked about the weaknesses in infrastructure in India. Will you be investing in supply chain as well?
JF: Yes. A part of the overarching thing for us is to make the business model work. And that encompasses all aspects of the business. That includes product design, features, cross points… what is going to be a successful product offering in the country and how we do the engineering. We have a lot of engineering resources in India so we have that in place. What we don’t have a lot of is manufacturing. We will be investing not only in supply chain partners but also in our manufacturing capabilities.
B&E: India's manufacturing capabilities have often been criticised on a general basis and comparisons have been drawn with China. What has your experience been?
JF: I think it is on a case by case basis. There are industries and companies that are more advanced than others. India is on a strong platform in terms of manufacturing capability, some of the service and technology sectors are advanced. We have a very high opinion in this sense of the capability of a company like Triveni. We see a lot of instances like that. It is changing very rapidly. So I think that the notion that China has a manufacturing capability and India does not is getting very stale and very generic. Obviously all those things are also tied up with the infrastructure development. Rail transport, moving materials around, et al are connected with efficiency in production. I think the government is very publicly and aggressively channeling resources into that and I don’t think that there is any debate on whether that needs to be done or the benefits of doing that. So we at GE are very bullish on all that is happening in the country.
B&E: What are your main considerations while looking for a JV partner for local manufacturing?
JF: Our primary strategic objective as a company is to make our business more local and ensure we have the right products at the right prices reaching the right customers. So we look at partnerships in that context – how can they help us either on the product side, manufacturing and supply chain or in distribution. Beyond that, we also look for companies with excellent management and with a business philosophy which is compatible with our approach.
B&E: You talked about the weaknesses in infrastructure in India. Will you be investing in supply chain as well?
JF: Yes. A part of the overarching thing for us is to make the business model work. And that encompasses all aspects of the business. That includes product design, features, cross points… what is going to be a successful product offering in the country and how we do the engineering. We have a lot of engineering resources in India so we have that in place. What we don’t have a lot of is manufacturing. We will be investing not only in supply chain partners but also in our manufacturing capabilities.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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