How India Auto Inc can maximise potential

An industry slowdown is when many right-thinking companies start thinking about staying relevant in troubled times and being on top when the tide turns. However, very often, the answers don’t come from within and it takes an outside force to show what matters most when the chips are down and the demand is for profits to go up. What is needed is a transformation of thought, action and processes. That’s just what the Gurgaon-based Kognoz Research & Consulting aims to do by improving companies’ business performance through implementation of 'Kognoz Business Systems' that directly impacts business KPIs (Key Performance Indicators).

The consulting firm says its services in transforming work, workplaces and businesses ensure maximisation of this potential. And it brings deep people and business systems expertise to what it says are “transformative consulting solutions” to ensure thorough execution of strategies.

Founded in 2017, Kognoz Research & Consulting specialises in offering ‘lean transformation’ solutions to companies in the automotive, banking and finance, as well as in the healthcare sectors, helping them achieve capability improvement, people skills and business transformation and bringing in an enhancement in overall productivity at large.

With around 32 years of industry experience in lean consulting, founding director Manish Prasad says his seven-year stint of handling MNC accounts at Simpler Consulting (now part of IBM), prompted him to start an Indian venture to cater to the critical needs of home-grown companies in different operational domains. Kognoz today comprises 15 consultants, all with extensive experience in strategy and operations, talent management, TQM, TPM, Six Sigma and supply chain among others.

Enhancing efficiencies and productivity at India Auto Inc
While it has quickly scaled up to over 30 clients in barely two years, Kognoz is working with two home-grown automobile OEMs and four Tier 1 suppliers. It is helping Indian companies improve their productivity and with one of the OEMs it is conducting a supplier development program aimed at improving process efficiencies. With another prominent Delhi-NCR-based supplier of integrated fluid transmission systems, the Kognoz team is carrying out business capability enhancement through process improvement.

With more than 10,000 companies functioning as ancillaries to principal OEMs in the automotive space, these organisations, usually with humble beginnings drew learnings from their customers and their JV partners. Many of them are today making an impact not only in India, but also in global markets and are thus becoming fairly complex organisations with complex supply chain and management operations.

Manish Prasad: 'A lot of awareness on management of HR from a capability building perspective is missing at MSMEs in India, which is where we step in to assess the situation and derive an implementable growth path.'

However, many of these MSMEs are missing several activities pertaining to business capabilities. Not many suppliers look at their multi-dimensional business requirements over a three- to five-year horizon, while OEMs are standing on firm ground for at least the next five to six years while having a long-term vision to go along too.

“A lot of awareness on management of human resources from a capability building perspective is missing in these companies (MSMEs), which is where we step in to assess the situation and derive an implementable growth path,” says Prasad.

“We focus on leadership capability, employee engagement and skill transformation. Also, upskilling is an integral part of any business and one cannot improve productivity without skill enhancement. So, productivity improvement and skill have to go hand-in-hand,” he adds.

While OEMs are well attuned to staff training at regular intervals, it is only now that Tier 1s and 2s are adopting this methodology for their employees to drive both personal and institutional growth.

Digital shopfloor
As regards digitalisation and automation on the shop floor at vendors, Prasad says, “The first thing which is required is a deeper knowledge on Industry 4.0 and how they (suppliers) could derive benefits out of it. With increasing automation and free flow of data, decision making will be done based upon AI and IoT, and thus, people will need to change their habits.”

“Organisational structures will need to become flattered and the hierarchy will have to collapse for everybody to adopt change and take more managerial responsibilities under their purview,” he points out.

Kognoz says that it is this change management that is its focus at the moment and that a full-fledged adoption of the relevant Industry 4.0 techniques within the automotive industry is still a couple of years away, but such tools need to be sold according to needs of individual organisations.

Mentoring start-ups
Prasad says Kognoz is engaging with some start-ups who are entering the electric mobility industry. “We are offering our consulting services to them in setting up the business and carrying out project improvements. The biggest problem with start-ups is with the initial cash flow and investments. This is where  many start-ups collapse if they don’t have strong control over the cash spends and an assessment of spending it at the right places,” he adds

Industry and slowdown
Giving his viewpoint on the current slowdown, Prasad says, “We are seeing a very unprecedented downturn due to less availability of cash in the market due to the lack of working capital. Also, the auto industry is facing the brunt of the government’s policy approach towards petrol and diesel vehicles. If the situation doesn’t improve, it will have a very long term detrimental impact.”

With a chain as strong as its weakest link, the consulting firm believes that every vendor is important towards the production of a complete vehicle. “We are advising their OEM clients that we need to ensure that Tier 1 and Tier 2 vendors stay afloat in the current scenario. In the downtime, people should focus on productivity improvement and saving costs. Japanese companies, for instance, take close to 2 to 3 years to set up a new vendor from scratch. If we don’t really support those Tier 1s and Tier 2s, it will have a huge impact on the sector,” remarks Prasad.

In terms of BS-VI implementation, Prasad says, “At this point in time, companies require to ramp up their orders for timely BS-VI production.”

Prasad believes that the consulting industry relies on growth from equally talented consultants. “We are upbeat about good growth and a CAGR of 100 percent for the next three years. Acquiring consultants is a big challenge for us and we have started our own skilling programme for our consultants,” he concludes.

(This article was first featured in the September 1, 2019 issue of Autocar Professional)