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Let's Manufacture

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DQC News Bureau
Updated On
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As 2008 arrives, it is time for India to once again consider its position

vis-a-vis China, the big economy that everybody will be watching. And it starts

with manufacturing.

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One big difference in the strategy between India and China is that India is

going after one part and China is going after the whole.

China has taken an interesting approach for global dominance. China thinks

that manufacturing is the last, most vital, and the culminating point in the

lifecycle of any product. If manufacturing can be controlled, you can control

product design, outsourcing, and manufacturing costs on the pre-production side,

and pricing and distribution on the post-production side. Effectively, if



China gets control over manufacturing, it will have control over everything.

For instance, one of the world's biggest mobile phone company has got a huge

manufacturing base in China. Because of this, lots of ancillary units, which

provide handset components, are also getting set-up. This mobile phone company

is now seriously looking at getting design and development work done from the

Chinese, because this country is also getting stronger in embedded software

skills. Since China is a huge market in itself, this comes as a deadly

combination-design, outsource, manufacture, sell-all in the same place. In the

case of India, it would be just design, and then we get out of the loop.

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Ibrahim Ahmad

The Chinese USP will thus be-good design skills, reliable and cost effective

outsourcing options, global manufacturing strengths, huge home market, and so

on. India will just have software designing and after that, BPO to offer. And

the way China is now encouraging and promoting education-specially of English

language and engineering skills-their grip over the entire design to manufacture

to support cycle will only get stronger. And India may be reduced from the

position of producer to consumer.

Those of us who believe that BPO will be our answer to China, should remember

that the world is moving BPO to India because of low costs and English language

skills. However, China as a destination offers not just lower costs, but

stability, fast growing domestic market, unlimited government support, big

investments in education and infrastructure. That is long term planning, and the

Indian IT industry and the government need to think on these lines.

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ibrahim ahmad



ibrahima@cybermedia.co.in

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