Competitiveness of Indian Manufacturing: Finding of the 2001 National Manufacturing Survey

In this paper we present findings of the second national survey on the competitiveness of Indian manufacturing. The paper develops hypotheses on the competitiveness of firms in the manufacturing sector and addresses some key questions on the characteristics of world class firms in India. We analyze the processes and practices that such firms have adopted to become world class. More important, we highlight firm level practices that are preventing Indian firms from becoming globally competitive. The findings point towards three distinct aspects of manufacturing management that define the capabilities of the firm, i.e., strategies related to dynamic control of shop floors, network linkages and innovation. It is found that firms that build distinctive technological and managerial capabilities in these domains are able to compete globally. The paper provides a comparison with manufacturing capabilities of competitors in China and draws lessons for organizing large scale manufacturing. It also provides an assessment of the changes that have happened in manufacturing priorities and strategies in India since our last survey that was conducted in 1997 and highlights the implications of these changes.

Managing Complex Networks inEmerging Markets: The Story of AMUL

Firms that desire to do business in large emerging markets need to develop a new paradigm for looking at opportunities in these markets. The success of many such firms has depended on how well have they formed or managed to become a part of an existing network of suppliers and consumers. These economies are complex and have unique characteristics that range from underdeveloped markets to small and fragmented supplier base. Clearly, traditional business models are not adequate for this environment. Successful firms participate in the development of both these elements of the supply chain. The prize, needless to mention, is significant sales in a large market. In this paper we describe a successful business model using the example of AMUL. AMUL is a dairy cooperative in the western India that has been primarily responsible, through its innovative practices, for India to become the worlds largest milk producer. The distinctive features of this paradigm involves managing a large decentralized network of suppliers and producers, simultaneous development of markets and suppliers, lean and efficient supply chain, and breakthrough leadership. This paper draws various lessons from the experiences of AMUL that would be useful to firms contemplating entry into emerging market.

Linking Technical Education to Business Growth: A Case Study on Building Technical Skills in India

Education has been recognized as the most important source of competitive advantage for a nation. It is the key determinant of firm level productivity which in turn drives business growth and profitability. Technical knowledge, in particular, is required both for industrial as well as service development. Technical institutions contribute to the growth of business and industry in a variety of ways. The most influential and direct impact is through their graduates who bring in new skills and perspectives to firms. Industries also seek advanced training on specific topics as well as consultancy from technical institutions. Often these institutions collaborate with academics to design and develop new technologies. In this paper we have argued that technical education plays a crucial role in building these capabilities and consequently in the growth of industry. We use the case study of the Indian technical education system to explore the nature of this system, mechanisms used to govern it, linkages between the education regime and the industry, and the roles that different stakeholders play in ensuring that such a regime delivers sustained advantage to the society. We study the business growth in a few select sectors and the changing needs of technical skills therein. These sectors are agricultural implements, auto-components, chemicals, construction, garments and machine tools. We also illustrate the link between technological innovation and technical skills thereby pointing towards the trajectory of developing industrial competitiveness.

Involving Private Healthcare Providers to Reduce Maternal Mortality in India: A Simulation Study to Understand Implications on Provider Incentives

Gujarat State has implemented the “Chiranjeevi Yojana” to improve access to institutional delivery with an objective to reduce maternal mortality and at the same time providing financial protection to poor families. The scheme involves private providers in provision of maternity services through contracting-out and use of voucher type of mechanism. Five districts covered by this scheme have population of about 10.5 million of which 43 per cent are below poverty line having about 110,000 deliveries per annum. The scheme during first year of its implementation has covered 31,641 deliveries. Of the total 217 providers in these districts 133 (61 per cent) have been empanelled in this scheme. This paper mainly examines two things, one, the revenue distribution a private provider would have experienced if the provider was not part of the Chiranjeevi Scheme and second, does the financial package provided in the scheme provides adequate incentives to the private provider to join the scheme. Further, given the number of providers empanelled in each district, does number of providers contracted-out in the scheme make any difference in revenue distribution of private provider? We use Monte Carlo simulation method to examine these issues. The simulation results suggest that the average revenue is Rs. 1416 per delivery. This is less than what the provider is being reimbursed by the government on capitation fee basis, which is Rs. 1445 (Rs. 1795 less Rs. 350 towards reimbursement for food, transport and Dai). By joining this scheme, the provider’s additional margin on an average is 2 per cent. This is over and above the profits included in the average revenue earned if the provider was not part of the scheme. The results further suggest that revenue distribution is scattered asymmetrically indicating significant risk in revenues to the provider. By joining in the Chiranjeevi Scheme, the provider is able to reduce the overall risk in revenue. In addition to this, the increased volume of services will spread the fixed cost of the provider and increase overall profitability further. Since the provider is paid up-front advance for delivering services under the scheme, there is no transaction cost of bureaucratic delays in payments. The provider in the absence of this scheme can maximise the revenue by doing more cesarean cases. The scheme has embedded incentive to minimise the cesarian cases to maximise the revenue and this produces larger indirect benefits from health systems point of view. The study identifies other issues that need further investigation.

Permutation Flowshop Scheduling with Earliness and Tardiness Penalties

We address the permutation flowshop scheduling problem with earliness and tardiness penalties (E/T) and common due date of jobs. Large number of process and discrete parts industries follow flowshop type of production process. There are very few results reported for multi-machine E/T scheduling problems. We show that the problem can be sub-divided into three groups- one, where the due date is such that all jobs are necessarily tardy; the second, where the due date is such that it is not tight enough to act as a constraint on scheduling decision; and the third is a group of problems where the due date is in between the above two. We develop analytical results and heuristics for problems arising in each of these three classes. Computational results of the heuristics are reported. Most of the problems in this research are addressed for the first time in the literature. For problems with existing heuristics, the heuristic solution is found to perform better than the existing results.

Knowledge Flows and Capability Building in the Indian IT Sector: A Comparative Analysis of Cluster and Non-Cluster Locations

The role of industrial clusters in the industrialization of many emerging economies continues to dominate the debate among policy makers and researchers worldwide. While recent discussions on this debate have focused on knowledge spillovers among participants within clusters, knowledge flows between non local networks and the cluster actors have not been accorded due attention in the literature. Further, the literature does not compare the relative impact of knowledge flows among firms within clusters and firms outside clusters. In this study, we attempt a comparative analysis of the role of knowledge flows in capability formation among firms in the Indian Information Technology sector (IT sector) across cluster and non-cluster locations. The empirical results suggest that at the firm level, leveraging of capabilities to enhance performance and networks to build capabilities is not automatic; structural features of the firms’ location enable this transformation. Moreover, while capabilities affect performance of firms positively only in clusters, economies of scale and some strategies like quality certification used by firms impact performance of firms outside clusters. Interestingly, although economies of scale do not impact the performance of firms within clusters, they do, however affect the capability formation of firms within clusters only. Further, we found that local and national non-customer networks affect capability formation of firms within and outside clusters whereas international customer networks affect capability formation of firms within clusters only. These have implications for how firms can develop appropriate strategies to enhance their performance.Industrial Clustering, Information Technology industry, Networks, Capabilities

Elements of a World Class Management School

This paper delineates the best practices that are commonly followed by world class management schools in their governance and pursuit of scholarly activities. It tries to highlight the processes required to become a world class institution and draws implications for schools in India that aspire to become world class. The paper is based on visits to a number of such schools around the world and discussion with faculty and administrators at these schools. It also discusses issues like autonomy, research, governance, compensation and financial independence which are critical for academic development of institutions in India.

Role of Bulk flow in Turbulent Convection

In this paper we present scaling of large-scale quantities like Pecl\'{e}t and Nusselt numbers, and the dissipation rates of kinetic energy and entropy. Our arguments are based on the scaling of bulk quantities and earlier experimental and simulation results. We also present the inertial-range properties of spectra and fluxes of kinetic energy and entropy.Comment: 15 pages, to Appear in the proceedings of "Senfest, International Conference on Complex Processes in Plasmas and Nonlinear Dynamical Systems