There is a large number of big and small projects successfully concluded for our customers.
Clients coming from segments like Multi-Media, Office Automation, Medical Supplies, Dental Accessories, Access Control, Heat- and Lighting Control, Measurement Equipment and others.
We contine to successfully assist European Customers to find mating Production or Technology Partners in India. And we are given the chance to assist Indian Customers to connect to the right Partners in Germany.
1996 Success Story - how networking in India started
Our employer at that time had transferred their production of portable Typewriters from in-house
production to a manufacturing location in Czech Republic in 1992/1993. Declining markets combined with increasing cost structures in Czech Republic made it necessary to find a low-low cost, high
quality location in Asia.
In order to identify new potential suppliers, we contacted Chambers of Commerce in Mainland China, Hong Kong, Malaysia, Thailand and Singapore. After initial contacts, we selected 16 potential manufacturers from these countries and send them the detailed inquiries with all technical data. One of the problems was, that our files and data where not wholly in English, and some detailed knowledge was necessary in order to understand the workings of an electronic Typewriter. In October 1995, we went on a trip to meet all these potential suppliers and discuss the project, our vision and any questions these companies may have. Our target was to work out a short-list of maximum 5 suppliers no later then beginning of 1996. Besides the final price of our products, our main focus was the capability of our future supplier to do local Sourcing and qualification of local suppliers independently as well as providing us with sound management and proficiency in import-export management. Furthermore, our internal support had to be cut to a bare minimum.
Meanwhile, in January 1996, Godrej & Boyce Mfg. Co. Ltd. / Mumbai – India contacted us and wanted to negotiate shipping them CKD’s of our Typewriters in order to start their own brand of portable Typewriters in India. Godrej’s background was such, that they had already developed their own high-end electronic Typewriters and where India’s #1 brand. Godrej itself is a more then 100-year-old, Billion-$ enterprise with various divisions and one of the largest, most diversified and most important privately owned companies in India. Godrej had at the time already global tie-ups with GE, P&G and Seikosha and was experienced in handling high volume production and associated logistics as well as having competence in Sourcing and import-export activities.
The Godrej staff was quite insistent in getting their own project going within shortest possible time and we visited Mumbai for the first time on 01.03.1996. We were virtually overwhelmed with what we found in Mumbai: A huge corporation, with about 40 factories on Mumbai campus, mass-production lines for Typewriters, locks, refrigerators, washing machines, office furniture a.s.o. Dedicated and highly competent staff in all divisions and a management with vision for a joint future: Literally in good times and in bad times. After Sourcing for more then 10 years in all Asian markets, we only asked one question: How could we ever overlook India? The answer was quite simple: India started to open their economy to other countries only after 1992.
Our discussion speeded up considerably during the next few weeks and our first CKD shipment went out in April 1996. Meanwhile, we also started considering Godrej as our future source for portable Typewriters and got their first quotations. On first pre-view, Godrej was not the cheapest supplier, especially compared to Mainland China and Malaysia. So we took a 2nd trip to our short-listed potentials, which were located in Shanghai, Shenzen, Penang, Bangkok, leaving the highlight – a 2nd trip to Mumbai – for the end of our journey.
In Shanghai, we found that about 30% of the BOM-components were missing in the calculation and that this company didn’t have a clear idea, how to import- and export material and Typewriters. The company in Shenzen already had some experience with similar office equipment, but felt unable to qualify sufficient local sources within few month. The manufacturers in Penang and Bangkok didn’t feel they could do any independent Sourcing without strict guidance from us. As a summary, the prices quoted by these sources were not related to what our product would have finally cost. That left as best choice Godrej & Boyce.
During our meeting in April, we finalized firm quotations, making sure that all components were included. At the time, Godrej hadn’t decided on the final production location, short listing Chennai or Hyderabad for cost reasons. We promised to have a final decision about our production transfer no later then mid of May 1996.
After that the project developed with lightning speed:
mid of May 96: final decision to transfer production from Czech Republic to Godrej & Boyce
May-June 96: Godrej takes final decision to produce our Typewriters in Hyderabad, in a factory which was still to be built.
mid of June 96: signature of contract / press conference in Mumbai announcing the tie-up
June / August 96: we start pre-planning of material and tools/molds/fixtures Transfer
June / August 96: Godrej build and equip new factory, plan, order and receive local Materials.
In parallel, all the managerial staff moved from Mumbai to Hyderabad (initially
without their families).
mid of August 96: Godrej’s new factory is finished and ready to produce the first quantities. Our first consignment of 25.000 material sets arrive in India
mid of September 96: the first container with Typewriters leaves the factory en route to Germany
01.10.1996: Project Managers Margit E. Flierl (commercial) and Thomas Hörauf (technical) move to Hyderabad and live there for 9 month (T. Hörauf) and 18 month (M.E. Flierl).
End of October ’96: tools/molds/fixtures completely transferred from Europe to India.
The portable Typewriters are still being produced in Hyderabad, even after Godrej sold the factory to WIPRO. Besides the project managers, only the chief of Quality Department visited every now and then. Today, consigned material is reduced to 5 crucial items, which are still being sourced in Europe. All other components and materials are fully sourced and purchased by Godrej & Boyce, mostly in India itself.
Additionally to a smoothly running production, continued cost advantages (despite some peaks in US$-exchange rates), Godrej gave us a chance, to get the cutting edge in our market:
Due to the tie-up with Godrej, and an agreement concerning availability of R&D man-power in the Godrej organization, we were able to develop a new model line of portable Typewriters, which wouldn’t have been possible with German R&D cost only. Godrej showed in production and R&D utmost competence and know-how. They proved commitment to our projects and the best partner we could possibly have found.
Facts and figures (in terms of commitment from us):
Production Cost / unit price (Landed in Frankfurt/Germany): reduced by 25%
Man-power commitment Czech Republic vs. India: initially reduced to 2 people
Since April 1998: no support at site
Handling, planning, purchasing of components: down to 5 components (out of about 350 total components)
Support in purchasing activities: none.
After years of working with Godrej, and much deeper knowledge of Chinese business practices, tools handling and contractual treatment are concerned, Godrej & Boyce of India is and remains the best choice for production transfer, outsourcing and local Sourcing not only in India, but actually in most of South-East-Asia.
Godrej proved to be an absolutely honest, committed partner in a critical business venture in a declining market. Godrej – and Indian companies in general – are fortunately missing the Chinese copy-cat mentality. Godrej and India provide their partners with the highest possible degree of absence of miss-understandings due to language problems, educational and on-the-job practical experience equal to any Western education or job experience.
And most important: once they are committed to a project – they are not going to go back on their commitment. No matter what. Because at this stage, they are not just some Subcontractor or Contract Manufacturer. They are your Partners.