Continuous Improvement and Business Process Re-Engineering
Polar opposite to the concept of Business Process Re-Engineering is the concept of continuous improvement. It was developed by the Japanese after World War-2. Whilst BPR relies on radical change, lean management relies on small incremental change. It stems from Japanese term called “Kaizen” which means small improvement. The concept relies on successive small improvements […]
The Problem of Piracy and Intellectual Property Rights
Introduction: The Problem of Piracy No discussion on intellectual property rights (IPR) is complete without mentioning the problem of piracy around the world. Piracy is defined as the copying, stealing, reproducing, transmitting, and selling of the intellectual property (IP) of an individual without his or her express consent and written approval as well as without […]
How Information Technology can Enable Governance in Developing Countries
The Problems of Governance in Developing Countries Governance is a problem in many Third World countries where the structures and the systems of governance are slow, archaic, and bureaucratic. Moreover, many developing countries do not have processes in place that would ensure reliable delivery of public services. For instance, take the example of the Asian […]
Step 4: Develop a Business Case for your Project
Now that we have the problem as well as the goal statement handy, it is time to ensure that these statements are well articulated in the business case. The management has to choose amongst several possible six sigma projects while granting its resources. The ones that do succeed in getting the resources from the management […]
Open Systems Approach to Project Management in Organizations
When organizations have “flat” structures and consist of coalitions of people coming together with multiple loyalties, intersection of the organization with its environment being characterized by shifting boundaries; the informal nature of the work processes makes use of “open” systems approach towards organizations. The point to note here is that external environments both shape and […]
A couple of decades ago, India was considered to be a third world country with limited economic potential.
When the idea of outsourcing first came up, most executives in the United States thought that Central American nations or Ireland would prove to be a better fit. However, two decades later, India is the ultimate destination for outsourcing software services as well as knowledge processes.
After having achieved dominance in the service sector, India is now looking towards becoming a global manufacturing hub. This intention has been made clear by the “Make in India” initiative that has been launched by Prime Minister Modi. As a part of this initiative, special concessions have been announced for multinational companies to create manufacturing bases in India. This has definitely drawn the attention of many American companies that are looking to reduce the dependence of their supply chain on China.
It would be inappropriate to say that within a short span of time India will compete with the likes of Japan, Germany, and China. However, the process for transforming the manufacturing sector has already begun.
In this article, we will have a closer look at the reason why India is poised to grow into a manufacturing hub as well some of the problems that it is likely to face during the journey.
Companies like Abbott pharmaceuticals have seen India become their third largest market in the world! This is also the case with other companies like Cummins Engineering which has seen a 15% growth in its operations for the past ten years that it has been in the nation.
As disposable income grows, many multinationals want to sell their products to the Indian consumer. The most cost-effective way to do so is to start manufacturing in India. As a result, it is likely that the increased consumption will drive the growth of manufacturing operations in India.
Companies would not want to build their facilities unless they are absolutely sure that their investment is secure. India has the upper hand on its rivals when it comes to security and stability.
India is the most politically secure nation in the vicinity. Pakistan and Bangladesh are facing a problem with terrorism. On the other hand, China is known for being an oppressive regime. India is the most convenient option for corporations to invest their money in.
One of the most obvious problems with the manufacturing sector in India is that the infrastructure is not that well developed. As a result, the cost of manufacturing is very high as compared to global leaders like China. India has started working on that issue with great intensity. It is likely that within a few years, India will also have infrastructure as China does.
Some of the other problems with the manufacturing sector in India are as follows:
The law in India mandates that big companies can only build their facilities on land which has been acquired by the government. Also, since there is a huge black market in India, the market value of a property and its book value tend to be very different. This leads to exploitation of people during the land acquisition process.
The labor laws are very strict in India. Multinationals often find it difficult to comply with them laws. As a result, they end us leasing their workforce from temping agencies. However, temping also has limitations and in the absence of proper labor laws companies are unable to move their research departments to India.
To sum it up, it is likely that India’s manufacturing sector will grow by leaps and bounds. There are some challenges that will come up. However, they are not so severe that India Inc. cannot face them.
Your email address will not be published. Required fields are marked *
What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
