India- Manufacturing Sector should learn from IT Sector to excel

India’s manufacturers could learn a lot from the IT sector’s experience in promoting the large-scale development of skills. India’s IT services and business-process-outsourcing sectors together hire nearly a million new recruits a year and bring them up to speed in just months. A key factor in this success was the early recognition among Indian IT companies, back in the 1990s, that the number of engineering graduates in computer sciences wouldn’t meet the needs of the country’s burgeoning IT sector. In response, Infosys, Wipro, and other companies began hiring graduates from all engineering disciplines and using in-house curricula and faculties to build skills among new hires. That approach ultimately led to the formation of a successful network of independent, privately owned computer-training institutes, such as Aptech and NIIT.

India’s manufacturers should follow a similar path by establishing in-house training centers to promote vital manufacturing roles, including those of fitters, machinists, maintenance engineers, and welders. Some Indian companies are already taking matters into their own hands. For example, to impart vocational skills, India’s largest automaker, Maruti Suzuki, has adopted six technical institutes across the country, some in regions with little manufacturing presence. By using the company’s own managers as faculty for some classes, Maruti Suzuki inculcates trainees with a strong feel for its culture as well. The automaker is now expanding its training programs to include employees of key suppliers.

Although training programs make good business sense, they are also increasingly necessary to get local populations to accept the establishment of a manufacturing footprint in India. Tata Motors’ partnership with the Gujarat state government to improve the skills of local workers, for example, helped the company to ameliorate concerns about the displacement of residents by the construction of a Tata Nano car factory, while giving the company access to new workers. Today, nearly 1,000 people who live within a 10-kilometer radius of this Sanand factory make Nanos. Similarly, Tata Steel has agreed with the Orissa state government to train and improve the skills of workers living near a planned steel plant in Kalinganagar. The company has pledged to give local villagers jobs in the project’s execution and operations.

Frontline workers aren’t the only ones whose skills need upgrading; India’s manufacturers must also improve those of managers. Consider the experience of the cement maker Holcim, where executives set—and achieved—such goals as significantly improving the reliability and energy efficiency of the production process, as well as other important operating metrics at the company’s Indian subsidiaries.

At the heart of this initiative is an academy the company set up in its Indian plant to help future leaders bolster their skills through a “field and forum” approach that intersperses class work with hands-on fieldwork in the form of operational-improvement projects. Similarly, Holcim trains its managers to focus performance dialogues with frontline employees on the importance of identifying the root causes of problems and of finding potential solutions through cross-functional teams. The company uses operational “war rooms” in its Indian plants to serve as a clearinghouse for the best ideas and to uncover the best contributions. In parallel, Holcim created an ambitious leadership program to support the personal development of up-and-coming manufacturing leaders.

The combination of rocketing domestic demand and the multinationals’ desire to diversify their manufacturing footprint offers Indian product makers a once-in-a-generation opportunity to emerge from the shadow of the country’s services sector. By improving their productivity and bolstering operations, they could become an engine of economic prosperity for the whole country.

Source fact data- Mc.Kinsey