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Need to differentiate!

By Guest Author,

Added 20 October 2016

Innovation and New Product Development will be the key for Indian Pumps, Valves and Process Equipment companies to break free from the image of being low cost manufacturers and improving competitiveness in the global markets, say Shripad Ranade, Abhishek Bagwe and Donnel Peter.

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PVPE (Pumps, Valves and Process Equipment) industry is one of the most important light engineering industries with an approximate size of Rs35,000 crore (FY16). Indian PVPE industry caters not only to Indian market but is also a supplier to the foreign markets. Over a period of time, manufacturing products based on designs made in the developed countries, has created a perception of India being a ‘low cost manufacturing destination’ or ‘per kg country’ (products to be sold on steel content rather than the technology used).

In order to ensure growth of PVPE industry in line with the ‘Make in India’ initiative , Indian PVPE industry has to break free from this legacy of being mere low cost manufacturers and move towards creating greater value for their customers through high technology products and drive industry growth.

Additionally, recent trends in this industry are driving the need to provide innovative solutions. Newer applications like submersible pumps for deep water oil extraction require solutions that test the frontiers of design and technology. End users have started to look for products that minimise total cost of ownership, creating demand side pressure for utilising new-age technology—a big change from the earlier low priced product requirements. Also, customers are seeking solutions that minimise parameters like downtime and the consequent loss of production. PVPE companies are feeling the need to come up with innovative solutions that provide service turnaround time guarantees along with their products.

Growth and Innovation
One of the key findings of the Global Innovation Index (GII) 2016 is that, countries that have made continuous and rapid progress – developed economies like Sweden, Germany and USA, and developing economies like China – have shown a common pattern where innovation has remained a key priority supported by a steady flow of R&D spending. Indian investment in R&D is lower than the global average and it is placed a middling 66th on the GII ranking. It follows, that initiatives of the Indian government such as ‘Make in India’ that targets to achieve 25 percent of GDP from manufacturing sector by 2022 has to be accompanied by suitable investment to boost innovation and NPD (New Product Development). Tata Strategic research shows that focus on innovation and R&D and early adoption of advanced manufacturing trends are the key characteristics of leading PVPE companies in these economies.

Challenges for Innovation and NPD
Tata Strategic was the knowledge partner for FICCI PVPE Expo 2016 where several industry stalwarts discussed challenges faced by the indusrty. These challenges are:

Internal challenges: Most Indian PVPE companies don’t have an effective innovation or NPD process. A number of companies have taken efforts for bringing about incremental innovation but these efforts have been requirement based rather than as a part of product development process. Further, Tata Strategic research shows that very few Indian companies focus on the areas of basic or applied research to develop Intellectual Property (IP) relating to product and process technology that will become marketable in the coming years.

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