New support line for component makers

The setting up of the Auto Cluster Development & Research Institute in Chinchwad marks an important chapter for vendors, says Eliot Lobo.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 09 Aug 2007 Views icon6850 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
The Auto Cluster Development & Research Institute (ACDRI) shifted into its own purpose-built premises in Chinchwad near Pune last fortnight, 18 months after it first opened for business in a rented shed. Set up jointly by the ministry of commerce and industry, the Maratha Chamber of Commerce, Industries, and Agriculture (MCCIA), and the Pimpri-Chinchwad Municipal Corporation (PCMC), ACDRI serves as an independent provider of support services for component suppliers and OEMs across the entire product development lifecycle right from design and reverse engineering through modelling and simulation to prototyping, testing, and validation.

Primarily conceived to enable the Indian automotive component industry to compete globally, it will go a long way towards improving the auto industry's supply chain efficiency by providing product design and development capabilities to Tier-3 suppliers who often cannot afford (or justify investing in) the sophisticated equipment and human resources needed to build such capabilities by themselves.

The Pune auto cluster, which consists of up to 4,500 large, medium and small-scale industries in Pimpri-Chinchwad with ACDRI as its nucleus, is the first industrial cluster of any kind to be recognised under the Industrial Infrastructure Upgradation Scheme of the Department of Industrial Policy and Promotion (DIPP) of the commerce ministry. Although it was sanctioned after two other auto clusters at Chennai and Pithampur, ACDRI Pune is the only one in commercial operation.

"Earlier, the auto component maker used to get all the process knowhow from the OEM. For the OEM, this often meant relocating an in-house activity -- transferring the manufacturing setup with the drawings, etc. This required constant engagement with the supplier in the nature of support and supervision.

CHANGE IN PROFILE

“But growing product complexity and speed-to-market pressure have reshaped this engagement dramatically -- now the OEMs are increasingly looking for full-service suppliers, those with the ability to independently develop complex components first time right," Vikram Salunkhe, a key member of ACDRI's technical team, told Autocar Professional in an interview. The vast majority of component suppliers in the region are small enterprises who had no hope of competing in this scenario -- till ACDRI was set up. "About 80 percent of the ancillary industry can use at least one of the facilities we have here," he said.

Contrasted against commercial toolrooms' reluctance to take on individual parts of the component development process, ACDRI offers its clients the flexibility to pick and choose the facilities they want to use, be it CAD, the toolroom, rapid prototyping or measurement, he pointed out. It is not just the small enterprises that stand to benefit; ACDRI will also help large companies such as Bharat Forge develop specific product development capabilities in a compressed time frame.

According to Salunkhe, even Behr India, a leading global supplier of air-conditioning and engine cooling equipment, used the environmental test lab and measurement facilities at ACDRI for product approval in a Tata Motors project. The institute currently operates one shift, but a second and third will be added according to the demand. To enable it plan the use of its facilities as efficiently as possible, it is actively promoting memberships. "We want people to commit as this helps with scheduling," Salunkhe said. Eventually one of the three shifts will be committed to members, and the third shift will be dedicated for OEM use.

##### SLEW OF FACILITIES

The facilities available include a CAD/CAM/CAE office, a calibration and validation centre, an environmental test lab, prototyping machines, a tool room, rubber and polymer lab, electronics lab, and product test rigs. Each of these activities will be run by an "operational partner" with expertise in the respective technology and the revenues will be shared. To begin with the CAD/CAM has been outsourced to Hoyt, and the calibration centre to Accurate, which aruns five metrology labs in other industrial zones.

The reason for roping in private partners, Salunkhe explained, is that ACDRI, as a government organisation, just does not have the flexibility to rapidly scale up according to project requirements or align staffing to volatility in demand. "ACDRI's role is to acquire the equipment, house it securely, maintain and upgrade it."

SHARING REVENUE

In the initial phase, as much as 60 percent of the revenue will go to the operational partner. This will go down to 45 percent when the activity is stabilised and the operator breaks even. "The revenue share will then shift in favour of ACDRI," he said. Eventually, every activity will be outsourced and each facility will be certified through the appropriate authority. For example, the measurement lab is already in process for ISO 17025 certification.

And though ACDRI's primary motive is not profit, Salunkhe pointed out that it is nevertheless a "reasonable-profit" enterprise. "We have to pay for maintenance and upgradation of our equipment," he said. "The SMEs want availability, and they are willing to pay a price for it. Our goal is to make our equipment accessible - and available - at every time." Another important objective of ACDRI is facilitation. The potential growth in the automotive component segment is beyond the capacity of the existing suppliers to match.

"New entrants will be needed to exploit the potential, including many from overseas," Salunkhe said. The institute has already facilitated the entry of Kuka Automation, which shared its earlier rented facility and has decided to stay on there but will use ACDRI's training rooms at its new site.

ITALIAN CLUSTER

In addition, it will help incubate an Italian supplier cluster which has received EC funding to set up in the Pune region to work with the Tata Fiat project at Ranjangaon. "These companies can rent our incubation centre and use our design facilities. This will accelerate their projects by at least six months," he said. In a later phase, Salunkhe envisages ACDRI functioning as a research laboratory in association with industry and engineering colleges such as I2IT nearby, which runs a course in automotive technology.

"They can use our infrastructure and focus their own on training," he said. "Our role is to provide the missing link. I2IT has the human resources, industry has the application knowledge and ACDRI has the infrastructure to enable both to come together."

The original scope of the project, for which the Central government had initially committed to invest Rs 127 crore (eventually cut back to Rs 60 crore), included an engine test laboratory, which will be the next facility to be added. ACDRI has had preliminary discussions with Automotive Robotics Inc, which plans to set up an outsourced testing and validation centre in Pune for commercial vehicle powertrains for an OEM in the US. "We could together set up a shared facility where they need only invest 30 or 40 per cent of the cost," Salunkhe said. The benefit for both sides is obvious.
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