For leading his venture successfully and mainly for the new moves, some of which are aimed at tapping megatrends, Jayant Davar, founder, co-chairman and managing director of Sandhar Technologies, is Autocar Professional's Man of the Year 2018. He shares his insights here.
You are a past president of ACMA and an industry player. How would you rate the Indian component industry especially in the parameters of innovation, quality, technology and fiscal performance as of date?
The automotive industry started in India in its true represented form 35 years ago. Since then, we have made some amazing progress. Today, India exports a significant amount of its output to every corner of the globe and to every car manufacturer. Whether it is a Mercedes, Toyota, Suzuki, Honda, or any other make that is made in India, it is of the same category and same calibre as sold anywhere else in the world.
India’s component industry has the highest number of Deming Prize winners outside of Japan and that comes from a huge metamorphosis in quality and management systems. Yes, we do lack in several areas, innovation and R&D for example, but then we have to look at the history. When the Japanese came in, it was a print-to-manufacture industry. They gave us prints and we learnt how to manufacture it and we did.
We did not get an opportunity to really develop things on our own. In fact, the first time that India produced something (fully) indigenous was the Tata Nano. That was the first time when people were given an opportunity to design things on a black-box basis. While the Nano did not do that well, I think it did change the aspect of the industry. I would think that there is not a single big or medium-sized manufacturer who today does not have a significant R&D centre, who's not into design capabilities in a proper fashion. All that is happening but yet the amount that we spent of our revenue compared to some of our best peers is very small (for R&D).
Sandhar supplies electrical relays to two- and four-wheeler manufacturers in India from its Gurgaon plant.
We also don’t have an ecosystem of R&D in the country. If you look at pure numbers, I understand there are almost 1.7-1.8 million engineers who are produced in the country (every year). The ones who go in for post-graduate programmes are only a bare percentage of the whole and those for doctoral programmes even fewer. And of those who go into R&D are only a handful, and even those want to go into government bodies. People who are left for (industry) R&D are very few and far between. To generate that ecosystem of research is extremely important and I think the government needs to get in there, the mindset of people has to change. That is why you will see in our automotive industry, a lot of technology is coming in from outside rather than being developed here. But it is changing, gradually but surely. I think in another 10 years, with a young population, we would have a distinctive advantage.
The employability of engineers has been an issue for long. What steps should be taken to bridge the skill gap, and address the challenge the auto industry faces?
One has been talking with the government. We need to build a very strong ecosystem. You need all the stakeholders to be at par, which means you need the industry, the academia, the government. All three need to come together, which means the curriculum has to be designed according to what the industry wants (industry consultation). The R&D that has to be carried out has to be based on what the industry wants, then the academia works on it with the professors and chairs and students to get that. The government has to provide a tax-compliant policy to help people build that ecosystem. You know all of that has to work together.
Unfortunately, we are working in silos. Therefore, the curriculum, which was designed a long time ago, may or may not be in sync with what the industry wants. If you are going to have a lot of electronics in the industry, then the academia needs to teach it. You need the faculty to teach that and students to understand that. All that will only happen if the government has policies which encourage or motivate for all this to happen.
There are skill gaps in certain areas between Tier 1 and smaller suppliers. How should that be addressed?
I think this has to be addressed very clearly. When you talk of skills, skills is an unending game. It is learning something today, unlearning that tomorrow and relearning something else. Unfortunately, the small scale sector has leadership issues. It could be a proprietor who is the owner, manager, general manager, managing director and the supervisor, all rolled into one. He will always be limited by what he knows at that point of time. He doesn’t have the time to leave that place, go out for training and come back and say that I have learnt something here. So we are very shorthanded with stuff like that.
My message always to the small scale sector is that when you hire people, you hire people who are better than you at what they do. If you only want to hire somebody who gives you salaam, then it doesn’t serve the purpose. The mindset has to change. India is a hierarchical society where people like to be salaamed all the time and that culture may or may not do well in the future.
Talking about R&D investments, what is Sandhar Technologies' annual R&D spend?
R&D spend is a combination of factors. It is what goes directly into our R&D centre. It is a lot of process engineering done at different units with different product lines because the manufacturing plants themselves do a lot of it.
I won’t be able to give you a direct number because many aspects of this go into revenue expenditure, but I will think it is still below 2 percent of our revenue. We still have a long way to go. But all I can tell you is this 2 percent is now employed very justifiably and with the right outcomes and rewards, which was not the case earlier.
Results of many of the steps taken by Sandhar Technologies this year will bear fruit from 2019. How is the mid- to long-term picture looking for the company?
We need to be in tandem with what the industry or sector is looking for. We have often spoken about several aspects of the game — about autonomous vehicles, connected vehicles, shared mobility, electric or other kind of green vehicles. If you want to put so many things together, there are still huge things in the arena which could be looked at.
Davar has taken multiple routes to build a technology bouquet at Sandhar Technologies, which currently has around 40 manufacturing plants.
Every new product line is built for the future, so we entered 1987 with locks. While we may be far ahead of anyone else, we will continue in that direction. Each new product line has a huge mass potential going forward. 2018-19 will see the launch of many such product lines and each one is there to grow. Our aspiration, obviously, is to be the best in what we do, whether it be in volumes, quality or competitiveness.
Do you see any of the product lines getting the scale and the stature of being the top rung?
Absolutely, each one. If we are entering any business, it is with a clear mind of being the best in our business in terms of volume. If it's helmets, we want to be the best and the biggest helmet manufacturer in the world. Suffice it to say that we want to be in leadership position in each product line. That is the target. That is how these products are picked. That has been our history and that is how we want to carry it into the future.
Are you adopting Industry 4.0 in Sandhar?
We have taken a lead in doing that. We believe that it is the future. You'll make it cheaper because the rejections would be fewer and productivity much better. Manpower can be employed for other things rather than pure basic manufacturing. Why would they do it when the investments are small? Today computers are a part of everyday life. And all we talk about industry 4.0 is connected manufacturing.
Professor Dan Jones of the Lean Institute had once said that if you were to do value mapping, you would see the amount of time, effort and energy that is wasted in between idle times. If you are connected, you won’t have idle times. You can save a lot of resources and make your time much more productive if you use systems that available. All you have to do is connect them. So to my mind, connected manufacturing Industry 4.0 is something that this entire nation should adopt — small, medium, large, everyone. In fact, survival of small is going to be based on the fact that they need to be connected.
Germany did this a long time ago and China has said that this is what it is going to do. Japan is saying that all future industries need to be industry 4.0-compliant. They might have different names for it, but it is basically the same. So India cannot just talk about it. India has been talking about it for the last 3-4 years. It is time that each one should get in there and get our hands dirty, because it won’t take much. It only needs a mindset change.
Everybody lives by some guiding principles or motto. What are they in your case?
I like to be fair. I like the company to be fair. And sometimes what is fair to one stakeholder may not be to another. So it is a combination of things. One has to live with one’s own justification of fair, which means you have to live with your own morals and ethical viewpoints and that is what I live with. Beyond that work is not work. Work has to be fun, and I enjoy going there. I want to see everyone who is a team member at Sandhar have fun, something that we all want to enjoy.
There has to be camaraderie. With 9,000 people, that is not that easy but we try to deploy value systems with the biggest one being fairness. Fairness to your customer, fairness to your stakeholder, fairness to your friends and employees and so on and so forth. We believe no one person is the end of it all. We are not creating a legacy, we are playing a game to enjoy on a daily basis and we try and improve on it every day.
Talking about fun, what is your favourite pastime and how often do you indulge in it?
I love playing golf. I play every Sunday. In terms of work, my own personal responsibility is not about production, manufacturing or finance. I am zero at finance. I love technology, I love futuristic ideas. So, I am always in the quest
of what else can we do next.
(This interview was first published in the December 15, 2018 14th Anniversary issue of Autocar Professional)
Also read: Sandhar Technologies’ Jayant Davar: Man of the Year 2018