It’s common knowledge (or at least conventional wisdom), that India has a large pool of talented IT professionals. They come from the Indian Institutes of Technology and several other equally high quality centers of higher learning. Over the last decade, this large talent pool has been leveraged for a wide range of IT and Business Process Outsourcing (BPO) services.
It shouldn’t surprise anyone that these top-tier schools also produce a high caliber of engineering graduates across various other disciplines other than IT such as mechanical, metallurgical and chemical. They have skills and capabilities at par with the rest of the world, and work with some of the same organizations that provide IT resources to U.S. companies. Consider, for example:
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Tata Consultancy Services (TCS), which is a part of India’s largest conglomerate. Its group companies manufacture heavy machinery, locomotives and cars; have mining operations across the country; and is India’s largest manufacturer of steel.
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L&T Infotech (LTIL) is a part of L&T Limited, another prominent industrial conglomerate, which is one of India’s largest construction companies.
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Mahindra British Telecom (MBT) is a joint venture between British Telecom and Mahindra & Mahindra, a leading manufacturer of automotive, farm equipment and utility vehicles. |
There are many other examples, like the CK Birla Group, which is involved in areas such as manufacturing of automobiles, precision machinery and heavy machinery or the Hero Group (which has the Hero ITES subsidiary). ITC Infotech is another of India’s largest conglomerates. The parent company is best known for popular brands of cigarettes and an exclusive on the Sheraton hotel franchise.
Why This Matters
U.S. enterprises should consider leveraging engineering resources beyond IT and software development. Given that most of these industrial houses mentioned — except L&T Infotech — don’t even have defined services around Product Engineering, it’s likely that the market will grow on demand-pull, rather than supply-push.
We’re not talking contract manufacturing, but knowledge-based services, built on competency, rather than the cost of labor. As an example, a large U.S. manufacturer of die-cast components is planning to leverage highly competent metallurgists in India to read magnetic resonance imagery of castings to certify their quality, in much the same way that radiologists provide guidance to doctors by viewing MRI and X-Ray images via broadband connections to engineering workstations.
In another such example, one of the largest automotive manufacturers that we accompanied to India for an IT due diligence, decided to also engage the IT service provider in component design and prototyping for its product line.
The key competency-based engineering services include:
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Product Design. Especially computer-aided design and drafting, concept validation, finite element analysis, etc.
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Prototyping. Manufacturing prototypes and testing
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Process Design. Design and implementation of processes associated with product engineering, including manufacturing processes
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Product Testing. Testing design, execution and reporting compliance
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Quality Control. Management of QC process, quality checks, etc.
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Product Lifecycle Management (PLM). Design and implementation of PLM applications for information management across the product lifecycle.
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In last month’s Back Page, Michael Corbett wrote of the increasing incidence of outsourcing “innovation,” mainly in the form of R&D centers opened by large global companies. The model for leveraging engineering competency on a service basis, as discussed above, extends that trend while simplifying its execution.
