Speak of advanced manufacturing and people generally think of the US, Japan, Germany or even China; but not India. In the ancient past, the nation and its people were renowned for their manufacturing acumen, for instance, the Wootz steel from ancient India was used to fashion the renowned Damascus steel swords. Over the centuries, the expertise waned; other nations overtook India in this sphere. Yet, there seems to be a bit of a revival, in a place known as ‘God’s own country’.
Kerala, the southern state of India, is renowned for its high literacy rates and its spices. It is here, that a little revolution in advanced manufacturing is taking shape. A stand out story in that regards is that of SFO Technologies, flagship of the Nest conglomerate headquartered in Kochi, operating in Healthcare, Telecom, Industrial, Energy & Transportation sectors.
Spanning over three continents, SFO Technologies has state-of-the-art facilities and specialises in electronic manufacturing services (EMS). The company started in 1990 as an original design manufacturer (ODM). ODMs are entities that create a specific product for another company, which later rebrands it for sale. This sort of transaction makes sense in international trade especially due to geography, low labour cost, and compliance formalities.
SFO Technologies is the brainchild of two brothers Javad K Hassan and N Jehangir who identified India’s potential to be a successful player in the manufacturing sector. Unlike companies that flood the market with cheap, mass-manufactured products, the duo entered a niche market, one of high-end, low-volume engineered products with mission critical applications. And the play has paid handsomely over the last two decades with the company expanding its global footprint to Japan, USA, Germany, UK and the Middle East spreading itself from healthcare to aerospace and almost everything in between.
A critical milestone in SFO Technologies’ journey took place in 2000 when they partnered with global giant GE. From initially manufacturing components for GE Healthcare at the turn of the century, the company now makes over 1,325 parts across 15 global locations. Their applications range from aircraft black boxes, access control systems for metro trains, thermal power stations, optical networks and even ultrasound or CT scanners. The mutually beneficial partnership has led SFO Technologies to streamline processes, develop strong vendor assessments and maintain a strong focus on quality and compliance. The partnership with GE has been a game-changer for SFO Technologies, because as a supplier, they were regularly measured on quality, delivery, cost and ideas against their competitors.
According to N. Jehangir, Vice Chairman & MD, SFO Technologies, working with GE helped SFO Technologies to come of age. “Working with GE really helped us in many ways. We learned simple tools and operating mechanics to manage complex end-to-end supply chain programs. They helped us achieve quality standards like ISO 13485 to be able to deliver life-supporting products. Moreover, the knowledge we gained from working with them helped us develop the right technology roadmap and plan our own strategic direction,” he states.
The rise of SFO Technologies over the past decade runs parallel with the emergence of India as an economic powerhouse. While the fourth largest economy in the world still lags in its manufacturing output, there are big changes afoot. The government's flagship “Make in India” initiative plans to boost the share of manufacturing in India’s GDP to 25% by 2022 and create 100 million jobs. In a bit to simplify taxation, the recent Goods and Services Tax (GST) amendment provides a uniform tax structure across the 29 states and seven union territories, much to the relief of financial departments in every Indian company. Considering the sheer scale and spread of India, acquiring local sourcing for multinational corporations is an unenviable task.
GE in that regards has had exceptional success. It has invested heavily into local manufacturing and also found the right partner to work with, like SFO Technologies.
SFO is also in the final stages of developing a new facility in Pune to support just-in-time manufacturing for the big ticket Indian Railways locomotive deal with GE. Currently, at SFO Technologies, GE business accounts for over 1000 jobs in Cochin and Bangalore. The mutually beneficial partnership has also created a strong local supply chain for GE. This has translated into sourcing crucial parts at lower costs driven by a drop in commodity prices and a strong dollar. The importance of India in GE’s supply map can be gauged from the fact that of the $2.3 billion spends in sourcing products in India, approximately 50% are exported to GE locations across the world.
With SFO’s new facility in Pune kick-starting in December 2016, SFO Technologies is gearing up to play a vital role to support the operations. In a rapidly changing environment driven by digitisation and the Internet of Things (IoT), the symbiotic relationship between GE and SFO Technologies serves a template of a partnership done right. And who knows, by kick starting an advanced manufacturing revolution, it could even be possible that India regains its glory in the same. Leapfrogging is tough, but certainly not impossible.
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