T&M Industry in India: Independence Day eve thoughts in FY14

Approach  large Geographic Spread in  Defense, Telecom, Railways & Healthcare Ecosystem
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This Independence Day  Eve  the mood is one of  relection and review and not so much of Celebration and big Joy because of  prevailing  conditions of  general  slowdown  and policy
anxieties. In last four months or so, some policy initiatives  on local manufacturing ( Cluster Manufacturing ) and Semiconductor JV have been initiated  to pump up the market though.This
should  pep up the local economic activity eventually, past the bureaucratic hurdles of approvals
and clearances.As an outfall the T&M industry ,at least the Global one should benefit.

Likewise on the local manufacturing and assembly of Smartphones ,a definitive big step has happened by both the local manufacturers and the giant International OEMs. We have also seen small
MNC firms moving in India through the FIPB approvals on technology /Defense side and some modest activity on the aerospace SME side too. All this will help the T&M Capex involved on the manufacturing and factory floor testing projects. The similar things need stepping up on the Railways related technologies where getting niche technology from abroad and developing locally should be relatively easier ,less Expensive to set up and no of end units to be consumed in Indian Network are high.

I think the Apps driven Economy catering to sectors like Medicare, Healthcare and Public Health Systems Delivery is huge and underpenetrated as the leverage to big numbers hasnt been realised here.The success will depend upon mass development of local apps and finding mobile and Tablet hardware platforms to ride on.A combination of startups, IT integration capability, Domestic market for social sector and Government incentivising coupled with venture capital can be the boost.Real benefit will however come if we get fair amount of FDI as well as the local capital to invest. I will
continue writing on these opportunities in succeding posts too.

On a Personal note, I had been getting lot of encouragement from different quarters (friends,past colleagues and industry veterans etc) to register thoughts here.However more recently our Roorkee
Class of 1971  has been reconnected -in the virtual world - to reboot my enthusiasm. To this E&C
batch ( 1967-71)  at University of Roorkee  I dedicate this blog. Happy Independence Day !!


    

T&M Industry in India : FY14 should reinvent "Total Solution" in our industry.

In India T&M industry and all the vendors are having very unique situation where the Word "Total Solution" is being used more as a cliche, whereas the dilemma is how to manage it in our conditions for better customer satisfaction and internal companys competitive advantage.All this requires the vendors to have unique skills and strategies how to present a value proposition & Execution.

The fist requirement is to think through and define their Business broadly enough so it has objectives flexible enough covering portfolio of products and services for yielding different revenue streams.Rather than being unnecessarily too niche,like Communication T&M ,simply say Broadly the T&M ! The approach of aggregator becomes tenable,if these vendors are flexible to tie as a Partner with other companies.This naturally comes to those companies who are open, and transparent  and most importantly customer service oriented. Services of all kind wraped around T&M will be good
thing to have in our quiver.

One of the most important thing is how easy it is to do business  with us and our companys staff.Web based facility can make that differentiation.Can he pay by Credit card? Online interface possible?Credit terms need many layers approval,or the frontline staff fully empowered! Ultimately all this will determine both loyalty and Customer Advocacy for our company and brand.How much we have stayed well with customers in the past will determine how much more loyal they will be in future.

Customisation and localisation will be other requirements of mobile nature of anytime access customers, and we need to be equipped with our processes and systems to respond to the customer.A hard brick-and- mortar like business in T&M really requires to be changed drastically.We will discuss some T&M specific work processes needed in the blog posts to follow.Will FY14 see some of the things making a T&M vendor responsive of all this? Interesting isnt it?

T&M Industry in India : Can FY14 provide a new paradigm to us?

PERSONAL  TV, PERSONAL COMPUTER, PDA, MOBILE DEVICE EVERYTHING PERSONAL than why not PERSONAL  T&M?  Why not  then per capita T&M ?


Decades back whenever I used to travel in the country side for selling the T&M instruments a peculiar curiosity used to get better of me. In this country of low GDP and personal income are sophisticated instruments with top Electrical specs to boast are really needed.Our generation had a very modest earnings and if you had a "four figure salary"  it could ensure you recieve matrimonial proposals.Over the time this feeling really was relegated to back burner and we got on our usual job to selling,beating quota, tackling competition and so on.

With the arrivals of liberalisation the ninties really saw the supply side constraints loosening up and we started shifting to an era of abundance and newer cheaper technology getting available.We saw the personal Discman, the personal gaming console and lot new personal technologies products which were getting to prosperous general populations. HP had also introduced a platform Personal Instruments (PI) from our important instruments factory that time.The product was later withdrawn for some reasons unknown to the field.But it created my above mentioned curiosity deeper and even stronger in intensity.

Later working as the CEO for Asiapac south in another competitor company ,we brainstormed among the senior Strategic Leaders Meeting why we shouldnt evolve a concept of quota setting to each of our Asian Country based on population ! This was wild, particularly for two giants with 1Billion plus population each............................We from India and China were naturally excited but internally scared as Sales Manager in us came to the fore ! You see our raison de tre was meeting target and we were not interested being termed as under achiever,if we didnt meet those" astronomical" numbers.

However now seeing in the hindsight this is not a very wild concept.India has subscriber base of 90 Cr mobile subscribers and the smartphone percentage growing every week,all sort of mobility,broadband injected, Tweets,Apps and Blogs becoming order of the day why cant be have a personal smart instruments getting embedded in this 4G or later 5G device! And if that is so why we cant have our sales target of T&M instruments set as a complex multiplier of our population? Will this FY14 create this new paradigm?? 

T&M Industry in India : FY14 impacts Aerospace,Defense,Security related business!

DEFENSE CONTRACTORS, INCUMBENT & NEW PRIVATE  AND OTHERS


We had covered the Defense and Aerospace related discussions in several earlier blogs in details.With what is actually happening to the Indian economy on ground today, a quick review is in order.The severe twin defecits of CAD and FiscD, sliding Rupee,Mounting Short term debt to both GDP and total debt rising etc have impact on the buying power of technology products and services to the ASD sector of the country.We need to workout both short term and long term operational plans to tide over these difficulties.A good amount of pragmatism and fiscal prudence is needed to have balance between operational valour and valet.

We need to see the big picture first.Current size of the Global ASD industry is more than a Trillion Dollar and growing till 2018 at 5-6% or so. The Indian maintenance,repair,overhaul and auxiliary services market for both Mechanical/Aeronautics as well as the marine/electronics part can be easily 3-4 B$ in 2016-17. Now what we have to ensure is under the present economic conditions how we maximise the procurement through indigeneous sources-local supplies,manpower and indegenisation bypassing the impact of Re slide. The exercise will require analysis and taxonomy details of the materials and services.A close coordination will be required between Defense Contractors, Services IPC wing, inspectors and vendors associations. This can be a little complicated as different agendas can be at work.This is where for ASD sector, role of Defense Offset Authority of India can come in.Idea is to save FE in procurement and strategise reduce,reuse,repair and recycle wherever possible.

One of the way this can be done is segregate projects related to Electronics /Technology intensive programs first.Electronics is all pervasive in Radars,EW, Avionics, Communications,Electronic Security and allied gear.We can also review the Big Ticket top 20 procurement programs maturing in the ensuing fiscal. In coordination with the OEMs and offset agencies we define and outline program where we can achieve approx 10% more indigenisation than budgeted/planned earlier.This will help us stay even-keel with pre-slide Re level too.The contracts can be then awarded on fixed price basis for FY14. Longer term off course we need to go for more FDI, local investment and massive SME and MSME participation of local entrepreneurs in the sector 

T&M Industry in India : FY14 must segregate Torso & Tail customers!

It looks like we are having the right focus on the deals which may be emanating from big Global Manufacturers downstream projects fanning out to India.In fact we covered the strategy to just follow the balance sheets of large EMS/ODM type accounts in asia and tracking them to local units here.I think some mainstream accounts will get covered that way and without difficulty we can generate business for manufacturing test systems,or even PXI based modular customised ATEs there.The OEMs related to telecom are also being pursuaded to produce goods locally as per the new policies of DoT (NTP 2012) and the cluster manufacturing policy of the DeITY.

A real critical part of covering the geography as vast as India is small and medium to large industries or assembly projects of Electronics nature.Here a simple policy should have three elements : Cover to Compete and then Close deals.Small R&D based single product small manufacturers are thousands of them in area of Components,Energy,Materials,Healthcare and Automotive Electronics.The modern jargon in marketing is " Torso" and "Tail"  type customers.Here the combination of a pull and downstream calling by the company is required,where the deal size can be small but otherwise rewarding-due to faster close cycle and the IGM on the deal very high usually.

Much of the pre-sales effort can be mass customised for this purpose and modula instrumentation based on new PXI can be useful here.With one survey,it is estimated that we may be having approx
150,000 or so suspects in the country.We can take ideas of the kind of solution which can go there,from some geographically spread accounts in Energy Meter industry,or capacitor manufacturer.
Segregating and separate focus on tail particularly is important because over the time they will graduate to the "Torso"  status and their own growth will drive T&M industrys growth too!.

T&M Industry in India : In short term too it is LTE in FY14 !

Since 2012 when several networks in the Continent and the US adopted going to LTE format of one kind or the other , several questions arose on the T&M applications and what were the testing solutions available that time? These questions are not answered even 80% as primarily the nature of the network is still evolving,the standards still getting the template and the 4G infrastructure and devices tethered on these networks are ramping up on various providers.Today, hoever it looks that the operators are settling for a particular version of LTE, local standards are being written as well as the particular standards writing body is fine tuning on various network elements as well as the MIMO scheme. Depending on where your location home base is, the local 4G operator is seeing impact of new age T&M on the network as well as the sensitive T&M manufacturer and developer is releasing versions for LTE test.

The major change here is because of the fact these networks have come away from the TDM/ATM
domain and is following the IP side.The data intensive networks are getting IPified and so the intelligence is more prominent here.So, the thing is Signalling part is changing from AcceSS7 to newer type eg Diameter Signalling in the LTE. The voice is receding on the background as more and more data is riding the devices and the network.Wherever Voice is still to be carried for the Economic Reasons and customer retention,Schemes like VoLTE or CFSB are coming to the fore.So testing these LTE networks impact the testing process and type as well.Besides Signalling,Voice and the Protocol testing other T&M impact happens in the Radio Network interface tests,Conformance testing on the devices and high data rate tests.

Internet address explosion and high scaling therein, the migration from Ipv4 to Ipv6  is also another testing challenge.The compatibilty for IPv6 compliance is necessary as the addresses outnumbe networks ability and special purpose testers will be needed here.The networks in India are supposed to be TDD type with Adv version of LTE eventually to follow.Devices manufacturers like Samsung are now a little sure to have local line of Smartphones in India.A clutch of home grown phone manufacturers are aggressively scaling up the presence, so in the short term too it is Long Term Evolution in India.Couple of mega deals on LTE testing are signed up.Follow this space for more.

T&M Industry in India : FY14 looking for Cash pile Manufacturer?

While the North India is currently sizzling with heat, the T&M industry is wanting to have some major clues for growth in the Enterprise segment and more clearly for test automation related opportunities for big Deals.We covered the environment and where to look for specific opportunities in Deployment, Defense projects etc in earlier blocks.The challenges are very many right now and we need to wait for clarity there.These things in Govt Procurement can always take time and need focussed effort there.Likewise the big PSU manufacturers in Defense and Telecom are also driven by the Capex releases from the concerned ministries.

One very good perspective from Global Telecom and consumer Electronic Manufacturers  come when we study their current "Cash Pile" on their balance sheets. Just scan the East Asia in particular,like Taiwan and Korea and chaotic place like China. See how much cash is piling up.Hon Hai Electronics, Samsung Electronics and host of  smaller manufacturers have 40 B$ and approx 20B $  cash/equivalent on the balance sheets! Normally these mega manufacturers will either do buyback of their shares,acquire new companies, or announce big offshore plans or simply shift to a better tax efficient location.Very clearly Sriperembdur, Noida and some other locations in the West India need to be our hunting ground to help them spend on capex and T&M systems.

Some of these accounts are captive for large Global players.But many of the manufacturers are vendors to Apple,Samsung and Hyundai Electronics.And these vendors will like to move to India for getting closer to the manufacturing system.How much they will be able to release in FY 14 is ultimately the effort of T&M vendors calling on them and selling their respective value proposition.Asia ,Manufacturing, Multi Country offshore plant locations and CASH PILE are the words having the right nexus here.