Design and Manufacturing in Strategic Areas can help Industry!

We identified last year that the two major areas of improvement are required if we need the tech industry in Defense to grow rapidly: namely the Rapid Prototyping and practicing T&M skills and
their execution in practical field.With last one year of great introspection and analysis, a total review of Defense induction and procurement has been done.Many aspects of procurements are identified for possible indigenous production and under Make in India program the execution of the procurement policy is to be do Everything!

We are not sure if the figures thrown out in the media are really feasible or the projections are authentic,but it seems some 50 to 60 Billion Dollars worth projects can be indegenised.A wise and pragmatic use of this big pie will be encouraging critical technology holders to get interested in India and local manufacturing created.Transparency and supportive environment thru IPR protection,tax laws,stable and steady orders flow and liberal FDI and FPI are many things to be ensured.Also we need to see that a parity is maintained between investing domestic and Global groups,so that we project Indias open and fair business practices.

Another trend in critical technologies Globally is that lot of veteran small design and technology companies and consulting houses are available at fairly moderate valuations.India industry can make innovative policy of co opting them thru M&A or other forms of collaborative pursuits to get best technology.Likewise the Rapid prototyping work can be concurrently undertaken abroad and in India.
All this work ,if integrated and homogenized can lead to a good indigeneous manufacturing base.Since Indias strengths are in software and services related skills,Design and prototyping can be leveraged efficiently.

Another innovative idea could be to get the services of many retired experts out of Senior Management teams of former DRDO scientists and Production Managers from BEL and HAL.They can be a resource pool for effective translation of know how from these Global companies into hardware or software in equipment.Similar expertise also exists today in many small private SME companies for augmentation.Let us see that all parameters fall in place and we have both strategy and execution in place!

Hopeful involvement for Defense Offset for T&M

A small note for mentioning the big Defense offsets is in order.As more and more regular systems get finalized for readymade projects in Defense happens,higher level of offsets get accrued for the contractors,the possibility of services including T&M shoots up.A figure around offsets of 10 B$ etc
is mentioned at this time.

Naturally these figures will increase a lot when the DPP 2016 is announced and procurement under local production and from MSME is undertaken.Both these activities will trigger the increase of T&M content in offset procured thru local vendors. Our estimates creates a figure of around 5 pct of the Total offset is envisaged.

The Government is still to classify the offset percentage related to T&M and therefore due caution is needed so our estimates on T&M don't go overboard.Right now we need to contend with five percent as good approximation.

More we will cover in next months blogs when we hear some major contracts finalized.

T&M Services can drive the overall Engineering Services Companies sharper!

Globally the technology sector is being monitored for its all pervasiveness.The tech sector is usually
perceived as the IT industry and its hardware,software services and peripherals to the core computing
platforms.Therefore the Engineering component of technology sector is counted as the IT.There is no
harm in doing that as Engineering Services are technological in nature and if simplicity is to be maintained in drawing the numbers,it makes sense to do that way.However the outsourcing of Enterprise and its relevance to countries like India,there is a case to look closely IT services exports and Business Process Management Exports.Industry circles feel that Engineering Services Export may turn out to be the outlier within various segments under IT sector.

The Engineering Services sector is itself quite broad.And various engineering services like Application Development, and Maintenance types are getting commodities and priced very genetically in the market place.The IT industry defines and names Mechanical,Embedded,Product Life Cycle Management and Software product as the sub segments.Now our submission is to look
the T&M industry as the specialized T&M services (software,application development etc) as part of
Engineering Services.T&M calibration services,metrology and synchronization will also be its part.

If T&M services become officially part of the Engineering Services spectrum,the higher growth attributed to it will really shine distinctly and it will benefit the T&M industry immensely.This highlighting of T&M services as part of Engineering Services Export was done in this blog,few years
back too.May be the time for this idea has now come,with the arrival of several 1Billion Dollar Engg
services business breaking out as the service companies.

There is time to rethink and reboot T&M services from this angle.