One's Loss is Another's Gain
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“One’s Loss Is Another’s Gain - How Can Indian Manufacturing Gain Post COVID-19”. Here, we have shared practical tips to be prepared to win the decoupling from China, post COVID-19 situation.
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One's Loss is Another's Gain
- 1. www.faberinfinite.comwww.faberinfinite.com www.faberinfinite.com Presents One’s Loss Is Another’s Gain Vishal Kulkarni May 11, 2020
- 2. www.faberinfinite.comwww.faberinfinite.com 2 Manufacturing Headlines…… Livemint Forbes www.nikkei.com The Hindu Business Today Economic Times
- 3. www.faberinfinite.comwww.faberinfinite.com SUPERSTORM IN GLOBAL SUPPLY CHAIN 3
- 5. www.faberinfinite.comwww.faberinfinite.com 5 TRADE WAR TIMELINE 22 Jan,2018 Tariffs on washing machine and solar cells 8 Mar,2018 Tariffs on steel and aluminium 25 May,2018 $1.3bn fine on ZTE (telecom company) 2 Apr,2018 Tariffs on $3 bn goods 15 Jun,2018 Tariffs on $50 bn of goods,rolled out between Jul & Aug 15 Jun,2018 Tariffs on $50 bn of goods, rolled out between Jul & Aug 6 Jul,2018 Tariffs on $34 bn of goods (25%) 6 Jul,2018 Tariffs on $34 bn of goods (25%) 23 Aug,2018 Tariffs on $16 bn of goods (25%) 23 Aug,2018 Tariffs on $16 bn of goods (25%) 24 Sep,2018 Tariffs on $200 bn of goods (10% to 25%) 24 Sep,2018 Tariffs on $60 bn of goods (5% to 25%) 1 Dec,2018 US agreed to talks/halt new tariffs 10 May,2019 Tariffs on $200 bn of goods raised to 25% 1 Dec,2018 China agreed to talks/halt new tariffs 13 May,2019 Tariffs on $60 bn of goods raised to 25% Source : www.bbc.com;www.statista.com
- 7. www.faberinfinite.comwww.faberinfinite.com Sector Affected Automobiles and ancillaries Electronics Pharmaceuticals and Chemicals Engineering Textiles and Synthetic Fabric Energy Agriculture
- 8. www.faberinfinite.comwww.faberinfinite.com 8 Companies Exiting China A February ’20 survey by Tokyo Shoko Research Ltd. found 37% of the more than 2,600 companies that responded were diversifying procurement to places other than China amid the coronavirus crisis.
- 9. www.faberinfinite.comwww.faberinfinite.com 9 Origin of Companies -Lockheed M -Adobe -Honeywell -Cisco -FedEx -Apple -Go Pro -J & J -Nissan -Ricoh -Mazda -Suzuki -Panasonic -Sony -Hitachi -Iris Ohyama -Hyundai Steel -POSCO -Samsung -LG -Doosan -Bosch -Volkswagen -Daimler -Siemens -BASF -Alstom Taiwan Singapore USA Japan S Korea EU Others
- 10. www.faberinfinite.comwww.faberinfinite.com Importing Countries Exporting Countries China India USA 452 57.6 Japan 134.68 4.86 European Union 386.91 42.37 Others 97.8 11.5 Total 1071.39 116.33 All figures in Billion US Dollars for 2019 10 Business Volume At Stake Target : 40% of the business opportunity
- 11. www.faberinfinite.comwww.faberinfinite.com 11 Preferred Destinations India Thailand Malaysia Vietnam Philippines Indonesia Bangladesh Taiwan Brazil Mexico Argentina Turkey
- 12. www.faberinfinite.comwww.faberinfinite.com 12 Factors Affecting The Shift EXTERNAL INTERNAL Productivity Levels Quality Levels Cost Effectiveness Health & Skill Index Delivery Competitiveness Innovation Level Tariffs & Taxes Topography Laws and regulations Stability of Government Infrastructure and permits Market Size
- 13. www.faberinfinite.comwww.faberinfinite.com Ease of Business Doing Rankings Economy 2019 Taiwan 13 Malaysia 15 Thailand 27 Turkey 43 Mexico 54 Vietnam 69 Indonesia 73 India 77 Brazil 109 Argentina 119 Philippines 124 Myanmar 171 Bangladesh 176 Source :World bank –Doing Business 2019 Report
- 14. www.faberinfinite.comwww.faberinfinite.com Competitiveness On Overall Factors Component India Taiwan Malaysia Thailand Mexico Indonesia Vietnam Overall Rank 68 12 27 40 48 50 67 Institutions 59 24 25 67 98 51 89 Infrastructure 70 16 35 71 54 72 77 ICT Adoption 120 11 33 62 74 72 41 Macroeconomic stability 43 1 35 43 41 54 64 Health 110 24 66 38 60 96 71 Skills 107 23 30 73 89 65 93 Product Market 101 14 20 84 53 49 79 Labour Market 103 15 20 46 96 85 83 Financial System 40 6 15 16 64 58 60 Market Size 3 19 24 18 11 7 26 Business Dynamism 69 20 18 21 41 29 89 Innovation Capability 35 4 30 50 52 74 76 Source :World Economic Forum –Global competitiveness 2019 Report
- 15. www.faberinfinite.comwww.faberinfinite.com Competitiveness On Internal Factors Component India Taiwan Malaysia Thailand Mexico Indonesia Vietnam Extent of Staff training 50 23 8 48 86 33 73 Digital skills 59 18 10 66 99 52 97 Research and development 26 7 39 56 45 83 72 Ease of finding skilled employees 71 7 11 86 69 45 96 Flexibility of wage determination 88 4 35 116 50 81 74 Pay and Productivity 64 15 6 30 82 28 56 Ratio of wage and salaried female worker to male workers 128 41 79 53 89 95 69 Source :World Economic Forum –Global competitiveness 2019 Report
- 16. www.faberinfinite.comwww.faberinfinite.com Competitiveness On Allied Factors Component India Taiwan Malaysia Thailand Mexico Indonesia Vietnam Quality of vocational training 67 28 12 74 62 37 102 Skill Set of graduates 93 59 17 79 70 37 116 Ease of finding skilled employees 71 7 11 86 69 45 96 Domestic Competition 46 12 11 65 83 45 64 Trade Openness 131 26 55 99 27 62 91 GDP 3 22 26 19 11 7 34 Imports of goods and services (as % of GDP) 117 41 21 33 74 126 6 State of Cluster Development 38 3 8 47 36 27 44 Commercialization 76 15 40 52 58 91 69 Source :World Economic Forum –Global competitiveness 2019 Report
- 17. www.faberinfinite.comwww.faberinfinite.com Concerns Raised Forget India, Vietnam likely to be the world’s next factory Economic Times Financial Express Outlook India www.livemint.com
- 20. www.faberinfinite.comwww.faberinfinite.com Major Hurdles For Indian Manufacturers Low Productivity Levels Outdated Technologies Low Skill Index Labour availability issues Cost of Quality High cost of operation Low focus on research, development and innovation
- 24. www.faberinfinite.comwww.faberinfinite.com What’s the NEW NORMAL? Productivity Innovation Cost Quality Skill Delivery
- 25. www.faberinfinite.comwww.faberinfinite.com 25 6 Improvement Levers P 1.Elimination of NVA’s 2.Improve EWT through Work Study & Work Balancing 3.Low-Cost Automation Productivity C 1. Value Engineering 2. Inventory Management 3. Reduction of COQ Cost Q 1.Implement Six Sigma Principles 2.Equipment Management Quality
- 26. www.faberinfinite.comwww.faberinfinite.com 26 6 Improvement Levers D 1.Supply chain Management 2.Improve OTIF Initiatives Delivery S 1.Perform Skill Gap Analysis 2.Use of TWI Skill I 1.Process Innovation Innovation
- 27. www.faberinfinite.comwww.faberinfinite.com In the middest of every crises,lies great opportunity! - Albert Einstein “ ”
- 28. www.faberinfinite.comwww.faberinfinite.com MY Coordinates • +91 997 017 9966 • vishalk@faberinfinite.com • Twitter: @vish_kul1 • LinkedIn: https://www.linkedin.com/in/vishkul1/
- 29. www.faberinfinite.comwww.faberinfinite.com I Asia Pacific I Africa I Middle East I consulting@faberinfinite.com I www.faberinfinite.com Thank You!!