Mktg - Nano,innovation & creative disruption

Call it the Nano effect! The ultra-affordable “people’s car” might have launched India as a hotbed of ideas, innovative products and solutions but Ratan Tata has only set the ball rolling. Today, manufacturers across sectors are also trying their hand at serious creative disruption.

For instance, Godrej & Boyce is developing a Rs 2,500 refrigerator for Dharavi slum dwellers. Then Chennai-based Brakes India has found out a way to convert slag into construction material. Similarly, one of the world’s largest manufacturers of digital & analog offset plates, TechNova Imaging Systems, has invented a digital plate that can cut down the cost of commercial printing by almost 90%. And, the list just doesn’t end there!

Surinder Kapur, CMD of India’s largest manufacturer and supplier of steering systems, Sona Koyo Steering Systems, cites his own example. “We have managed to develop an indigenous steering system for off-highway vehicles for the US market at half the cost of what other international manufacturers quoted. We plan to use a similar approach to create an ultra-low cost steering system for the Nano as well.” Mr Kapur believes that innovation is contagious.

India’s largest carmaker Maruti Suzuki’s latest ‘one component, one gram’ drive seems to have taken a leaf out of the same book. The $3.7-billion vehicle manufacturer, along with its suppliers, has worked out a strategy to reduce one gram of weight per each component of a car. The mission to subtract 2.6 kg from a car would translate into a minimum annual saving of Rs 10-crore for the company, and better performance and fuel efficiency for the customer who would be driving a lighter vehicle.

As for the ultra-low cost refrigerator, the man involved in its development, Jamshyd Godrej, CMD of Godrej & Boyce, India, refused to comment despite top industry sources confirming the development. But world-renowned management guru and former professor of breakthrough management at MIT, Prof Shoji Shiba, was more helpful as he rattled off a few more names. “Over 40 Indian companies have adopted this strategy so far. To enhance top-line, companies such as Ashok Leyland, Crompton Greaves, Kirloskar Brothers, Mahindra & Mahindra (M&M) and Bosch have gone ahead and put in radical strategies in place,” reveals Prof Shiba, who visits India regularly on a Confederation of Indian Industry (CII) programme on breakthrough management.

“Breakthrough management is all about creating new markets in the fast growing economy. India and China have been growing very fast during recent times, and hence, companies here need to adopt business strategies for creating new markets,” says Prof Shiba, who visits India regularly on a CII programme on breakthrough management.One company that has successfully managed to do this is Brakes India that has found out a way to convert slag into construction material. V Narasimhan, executive director of the company says, “We wanted to offer a new value proposition. Around 4% of our top line was going as waste. The idea was to convert at least 2% of it to add to the bottom line. In the light of severe restrictions on mining, the use of slag and spent sand will become very attractive as building material. We are utilising this solid waste for purposes such as laying roads and constructing buildings. This process avoids use of fire wood which is required to be burnt to dry the bricks when produced in the conventional manner. We have also obtained a patent for this innovation.”

So, why is breakthrough management so important now? According to Prof Shiba, today, if a company has to grow fast, it has to pursue radical business ideas that may even include changing the line of business or transforming the entire business to become more groundbreaking and potent. The idea is to create a consumer segment where it didn’t exist earlier. For instance, Bharti Airtel had used product innovation very effectively to disrupt market forces and competition. The company’s pre-paid lifetime product forced other telecom players to follow suit and it also changed the whole pre-paid business model.

Another home-grown case in point of product innovation is Sona Koyo’s new steering system where the company managed to cut down manufacturing costs by half. This is how they did it. “We studied the real customer requirement. We noticed that most of the steering systems that were being offered were off-the-shelf items with a host of features that were actually not required for the job. So, we just chopped off the extra features,” explains Mr Kapur. Sounds simple, doesn’t it?

Pranav Parikh, CMD of TechNova Imaging Systems has a similar story to tell. “After studying the entire commercial printing industry we found that medium and small size printers were heavily dependent on traditional plate making processes, which were cumbersome,“ he says. “At the same time, they couldn’t afford the high investment costs of digital printing. So, we saw a potential to carve out a new market. Our innovative digital plate has brought down the investment in equipment from more than a crore of rupees to a few lakh. And this is just the tip of the iceberg.” So, what do we have next—ice, which doesn’t melt?