Big opportunitiesawait aerospace

SMEs in Karnataka

Big opportunitiesawait aerospace

SMEs in Karnataka

I n d u s t r i a l

VOICE OF LAGHU UDYOG BHARATI - KARNATAKA Feb- 2011. Vol 1. Issue 2Single Copy ` 30

Laghu Udyog Bharati - Karnataka www.lubkarnataka.org

The views expressed in this magazine are not necessarily those of Laghu Udyog Bharati.

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Inflation hurting SMEsC

ON

TE

NT PAGE: 4

PAGE: 5-6 Summit report

PAGE: 7-9 Cover story

PAGE: 10-11 Entrepreneur of the month

PAGE: 12-13 Technology

PAGE: 14-15 Managing People

PAGE: 16-17

PAGE: 18 Read & Right

PAGE: 19-20 News

PAGE: 21 SME Event Calender

Obituary

Guru Mantra

Laghu Udyog Bharati - Karnataka, No. 114, 42nd Cross, 8th Block, Jayanagar, Bangalore - 560070, Phone: +91 80 2665 1234 email: info@lubkarnataka.org Website: www.lubkarnataka.org

Edited and Published by Yagnaesh M. N for Laghu Udyog Bharati- Karnataka.Designed by Linear Communications Pvt. Lltd. Ph: 080-2211 1641 Printed by A to Z Print Solution, No. 41, 23rd cross , 12th Main, 3rd Block East, Jayanagar Bangalore 560 011. Ph: +91 99844068250 / 080 26644111

Editorial committee

H.V.S Krishna

T. Srinivasan

C.N Bhojaraj

D.L Venkatesh

Yagnesh M.N

Manjunath K.N

s 2010 was coming to an end, Indians thought that T h e b i g e v e n t t o h a p p e n

was the end of a two year period of painful economic in February is the Aero India show, I expect better business for Aslowdown and that the Indian economy was going to the SMEs in the aerospace sector located in and around

rebound in 2011. While the overall economic mood is still Bangalore.

buoyant, the current inflation is hurting everyone, especially I have to end this on a sad note because of the demise of our the SMEs in a big way. Regular fuel price hikes, increase in enthusiastic executive committee member Sri Bhanu Tirumale. interest rates on advances by banks, increase in the cost of He left abode on 22.12.2010. His service to the organization material are hurting the SMEs. and the industrial sector cannot be valued. Join me in my prayer

While I expect the situation to get better, SMEs have to manage so that his soul can rest in peace.

their costs smartly and keep the spirits up. The Laghu Udyog

Bharati - Karnataka team participated in the Vibrant Gujarat

Summit held in January 2011. The team was impressed with the

way it was conducted and saw a lot of potential for SMEs in Yagnesh M.NIndia and for Karnataka as well. Editor

Another big event in January 2011 was IMTEX at the

Bangalore International Exhibition Centre. It attracted

entrepreneurs in big numbers from all over India. There was

overwhelming response from the visitors.

V. K. Dikshit

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Obituary

BhanuTirumale

May his soul rest in peace!

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Summit report

Mr. Modi's team, so

confident about their

success in business

development so far, said

they had stopped calling

the conference an

investment summit. Now

they describe it as a

gathering for knowledge

sharing.

Vibrant Gujarat Summit had sharp SME focus

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attract investment to India as a whole–not only to their own reference to Europe. With CBC representing business in 54

state In this vein, administrators from 12 other countries of the Commonwealth, and with EICC playing a

states–including Karnataka and Andhra Pradesh–are in major role in the EU-India trade relations, the event is

attendance, aiming to lure business to their own states, said expected to contribute to bringing the SMEs of Europe and

S.A. Dula, adviser to the Industrial Extension Bureau of Commonwealth countries closer.

Gujarat, the state arm that organized the summit.

Mr. Modi's team, so confident about their success in

business development so far, said they had stopped calling

the conference an investment summit. Now they describe it

as a gathering for knowledge sharing.

SMEs heart of EICC-CBC-CII

strategyFocus on developing business collaboration and

entrepreneurship of the SMEs in the development of

emerging economies was at the heart of the strategy during

the Vibrant Gujarat 2011. The Europe India Chamber of

Commerce (EICC) joined Commonwealth Business

Council (CBC) and Confederation of Indian Industry (CII)

to organize a high level Seminar to discuss ways to improve

the investment and business climate and specific national

measures and regulatory reform to improve business

condition.

The event's focus was on creating the framework for

building capabilities of SME sector to meet stringent trade

and business criteria of developed countries with special

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· Almost 8,000 MoUs worth $462 billion signed in VibrantGujarat’

· 30 MNCs, 16 countries - Gujarat gears up for investor summit

· Integrated mining cities mooted in Gujarat

· SMEs drew the maximum interest of corporate, who signed 4,286 MoUs worth Rs. 18,448 crore. Together, they could pocket 2% of the 21 lakh crore committed during the two day summit. Most companies investing abroad were smaller companies

Summit report

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angalore has been India's aerospace capital for the because of ancillary production opportunities. Keeping

last 60 years and is likely to continue to be so for these prospects in mind, the Karnataka Government Bmany decades to come. The decision to hold has initiated various measures to promote the aerospace

AeroIndia in Bangalore is a testimony to this. industryin the State.

The question today is not how important Bangalore is or What makes the prospects bright is the availability

Karnataka is to the Indian aerospace industry but how can it of highly skilled manpower, presence institutions

be made even bigger in the next few years. With like Hindustan Aeronautics Ltd (HAL), National Aerospace

future defence and civil aviation growth coming Laboratories (NAL), Indian Institute of Science,

from this region, India is in a better position to negotiate ISRO, R&D labs of international aerospace giants

higher offset production arrangements with global such as Airbus, British Aerospace and others.

aerospace companies. This is good news for the high-tech Already, dozens of SMEs supply components SMEs in and around Bangalore. to top aerospace companies globally. The technical

The other good news is Indian businesses are getting and business capabi l i ty of aerospace SMEs

into civil aviation manufacturing and are making has definitely reached a critical mass where the future

Bangalore as their hub. The latest in the news is an can get only better. investment of $54 million by the Mahindras in a

turboprop aircraft manufacturing plant near Bangalore. MNCs and a slew of SMEs, has stimulated a thriving This development is good news for SMEs here business in outsourcing, with SMEs playing an active role.

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Bright prospects for SMEs in aerospace

Prospects for SMEs in the aerospace sector is bright, yet the challenges are

productivity, high raw material cost and the ability to scale from small to

medium scale enterprises. -By Javid Hassan

Bright prospects for SMEs in aerospace

Cover story

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Anand Mahindra announcing launch of Mahindra and Mahindra into civil aviation recently

Cover story

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acres of land at Devanahalli near the hardware and software way in India achieving the target of becoming a major

parks, of which 1,000 acres had been allocated for the player in aircraft manufacturing globally.''

aerospace park. However, a major area of concern is the According to him, a government technical institute can also escalating cost of raw material used in the industry.serve as an outsourcing hub for major organizations if it has

the requisite skills and facilities to handle the job. In this

Challenges context, GT&TC and other technical institutes have proved

Noted scientist Kota Harinarayana articulated his concerns that they can meet the requirements of the market. At

in this context and said the great challenge before the another level, the MSME Development Institute has also

country was pruning the cost of aircraft production in view been playing a pivotal role by organizing technical seminars

of the high cost of raw materials procured from the des igned to make them innovat ive in thei r

international market. He made his observation during a one- conceptualization of projects.

day symposium on 'India Defence and Aerospace, A case in point was a seminar arranged in November 2010 in organised by the National Instruments India in New Delhi collaboration with the National Institute of Design, recently. “The cost of operation has to be brought down. It is Ahmedabad. Its thrust was on innovation in designs to make a challenge for designers and manufacturers involved in SMEs competitive in the market. While challenges remain aircraft manufacturing to meet the challenges,'' he added.the prospects augur well for the future of SMEs operating in

He also said, ''We are at a crossroads and India has emerged the aerospace sector.

as proven destination. The aircraft market is shifting

towards Asia from North America and Europe, but what is

needed is the ability to deliver at quicker time as well as at

cheaper rate. Finance is not a problem, since the Public

Private Partnership (PPP) model has eased pressure on

Government to bear the cost of production. “So quick

delivery, cost reduction and best technology could go a long

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The technical and business capability

of aerospace SMEs has definitely

reached a critical mass where the

future can get only better. Quick

delivery, cost reduction and best

technology could go a long way in

India achieving the target of

becoming a major player in aircraft

manufacturing globally

- Kota Harinarayana, noted scientist

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Question: Your company is among a very few which has

a track record of working on different aerospace

vehicles? What process have you put in place for

working on different brands? How complex is it to work

on European/Russian and Indian designs?

Answer: We are manufacturing parts to various aircraft to

their high quality requirements only on the basis that ours is a

systems driven management, where the process is drawn

meticulously and the responsibilities are distributed to the

individuals and the results are monitored daily. This system of

process control improves quality of output.

How were you able to attain such high production

standards? Please narrate the journey to attaining it?

The world is moving towards high quality–low cost and on-

time delivery. What we manufacture today at some price will

become cheaper and cheaper every year.

Entrepreneur of the month

I want to be a` 100 crore company

V. K. Dikshit

V. K. Dikshit

- Managing Director

Mr. V K Dikshit is a brave and hard-working entrepreneur for 45 years. Brave

because he had got into very high precision sector where there is no margin for

error. Here he shares his ideas and vision.

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The company also manufactures

components for SU Aircraft, A320

aircraft door parts, Kaveri engine

blades, fuel line parts for LCA and

various other aircraft parts.

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MEs can really make the web work for their

business and create a significant revenue impact Sand also be available to your customers round the

clock. Read howA small and medium business owner often would have

limited budgets for marketing and operations which means

limited manpower for field calls, advertising, market reach,

supply chain management and customer care – however,

given the advent of new age media and online marketing and

CRM technology and tools, there are several opportunities

to reach out to customers and target affinity groups.

#1 – Retain / Interact with existing

customersExisting customers often provide leads and references even

if they are not active customers. An effective way of using

technology is to stay connected with customers is to create a

customer space / portal /microsites with a range of web

services like blogs, videos, chats, user community forums,

an online marketplace for parts and accessories, online

customer assistance through a helpline and share

continuous useful information around the product / service

sold. The customer keeps coming back for support,

maintenance, tips or just interacting with other users. This is

a good and cost effective way to build brand recall through

service orientation. Examples are marutisuzuki.com,

Nokia's Nokia care site, swimmingpoolhub.com, etc.

#2 – Market online to new and

existing customersMost products and services today can be showcased online

as technology has matured to allow for product showcases,

digital walkthroughs, assisted demos, do-it-yourself

download packages and a well equipped back office that

interacts with customers through marketing campaigns on

email, phone, sms and other low cost channels. Today a lot

of complementary sites allow for product / service

advertising swaps for space as well as commercial models

for revenue share. Examples are Rediff.com, Times of

India, Hotels and Software sites.

#3 – Pay and use technology

servicesIf you are looking to improve office productivity, several

tools and services are available on demand and through 'pay

Leveraging online Technology

By Ranganath Iyengar

Earn more from less

Technology

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as you to' models. Good examples include sites offering The SME's business challenge is how to optimize / stretch

office automation packages, hosted ERP, CRM and SCM, budgets and online media, marketing and other services

communication and conference facilitation, product design offer a perfect financial and business leverage to SMEs to

packages, managed IT services etc. These services offer pay on demand or usage. Additionally, by co-existing on

great value for money to SMEs who do not have to invest in such portals, there is also a brand / image building leverage

sunk costs. Examples are Webex, Zoho, Microsoft, Busyetc. as well. The best way to get started is to include such spends

in the business plan and experiment with small packages

before committing more continuous effort and time. So, #4 – Share documents and there you go – you can really make the web work for your

business and create a significant revenue impact and also be workflows with your supply chainavailable to your customers round the clock !

If you have a large supply chain base, moving documents

and information can be a challenge – today technologies

like Web EDI and standards like 3DXML allow you to share

documents, drawings and designs online in a secure manner

without compromising on your intellectual property.

Examples are Worldfashionexchange, Webedi etc.

#5 – B2B and B2C marketplacesMarketplaces are also interesting value propositions for

SMEs as they offer ready services to buy and sell products

and since these are mostly industry specific, they are fairly

effective for small organizations to quickly find global

markets. Examples are Amazon, Metalmarketplace.com,

Foodline.com, FlipKart.com, eBay, Overstock.com,

Oodle.com, Bonanzle.com etc.

#5 – Social media networkingSocial media has generated a lot of interest and is good to

use especially if the customer target base are younger

consumers – such sites are useful as reference sites,

targeting affinity groups, getting reviews, publicizing

events, aggregating individual service providers etc.

Examples are Facebook, Twitter, Meraevents.com etc.

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The SME's business

challenge is how to

optimize / stretch budgets

and online media,

marketing and other

services offer a perfect

financial and business

leverage to SMEs to pay

on demand or usage.

The author is a technology and business

consultant for SMEs.

ranga@siiplconsulting.com

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Good processes help retain talent

Managing People By Ajay Wahi

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· Without management

commitment, any

attempt to standardize

technical processes is only

a theoretical exercise - it

will never show adequate

results.

· Employees frustrated with

inadequate technical

processes will not only

leave, but will also bad-

mouth the company to

others, making it difficult to

attract talent

· When technical processes

are in place , the company

has a high probability of

getting it right the first time

therefore efficiently using

scarce resources.

You can purchase Ajay Wahi's book 'and the award for Best SME of the Year goes to…' by mailing awahi@fastbooking.com

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Ten Commandmentselcome the year 2011

with a smile from Ww i t h i n a n d w i s h

eve ryone wi th a s anka lpa

(intention) for peace and prosperity

for all the people on the planet.

Make a resolution to do more good

to society, help the people who are in need and bring

solace to who are suffering. Let our life be useful to

one and all.

Today, most people are confused because there is no

direction in life. The difference between flood and a

normal river is that water flow is regulated in a river.

Similarly, the energy in our life needs some direction to

flow. If you don't give direction, it is all confusion. When

you attend to the spirit, life attains its highest and

becomes a celebration. Here's how you can

nurture the spirit.

Guru Mantra

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of Joy By Sri Sri Ravi Shankar

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his long-awaited book was launched late 2010. The and Jackie Freiberg, along with Dain Dunston, take you behind the scenes and show you how, in the face of book, published by Westland, was authored by insurmountable odds, Tata Motors created one of the TChr is tabe l le Naronha , Ph i l l ip Chacko greatest innovations in the auto industry since the Model-T.

and Sujata Agarwal.

This is the story of how Team Nano pushed itself to find “A promise is a promise”, Ratan Tata had said at the launch elegant solutions to seemingly impossible problems. When of Tata Nano. The book may give an impression of a experts said the Rs.1 lakh car was impossible, they pressed business management book at first glance. But it is much

on. When budget constraints, design restrictions, the rising more than that. It is an inspirational account of how Tata Motors overcame the limitations imposed by conventional costs of materials and political agitation threatened to derail technology and traditional methods of manufacturing to the project, they dug deeper. And when the Nano was develop a car that has changed the automobile world.

revealed to an astonished world, they started a cultural

renaissance in business thinking.Normally, a car is made and then a price is put on that. But in

Nanovation explores the making of the Nano to show how this instance, they fixed on a price and then made the car. It was a wonder that the idea was brought to fruition. you can encourage employees to overcome adversity, to

Writer and chairperson of Infosys Foundation, Sudha take risks despite the fear of failure, and to innovate beyond Murty, who released the book, said that all the answers to customer expectations. If Team Nano could take 85 per cent questions that had occurred to her about the project were

of the cost out of a product as complex as a car, what can you available within the pages of Small Wonder. Ms. Murty is an automobile enthusiast. do to transform your price-to-performance paradigm and

deliver insanely great products and services at a fraction of “I was hoping my birthplace Dharwad would be considered for the plant when the Tatas had to move from Singur. It was their previous cost? Your future depends on creating a our loss. One can read about it all in this book, see how

culture of innovation. Nanovation shows you how to do it.failure is connected to success,” said Murty, recalling that her father had to wait 17 long years before getting a car.

Nanovation: How a Little Car Can Teach the World to Think BigAn impossible dream that came true—and what it means for your business. In Nanovation, best-selling authors Kevin

Read & Right

“A promise is a promise”, Ratan

Tata had said at the launch of

Tata Nano.

The book may give an impression

of a business management book at

first glance. But it is much more

than that.

Small Wonder: Making of the Nano

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News

Exchange for SMEs soon

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News

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I n d u s t r i a l

N. Prabhakar, IASManaging Director