ECEL on Bigger Dreams!
Investing in its new manufacturing facilities to double its production
"Our initiatives on Lean sigma transformation will reduce the lead time in all operational activities and increase customer loyalty/market share and achieve growth in sales," Mr. Rajesh Sharma says in an exclusive interview with S.A.Faridi.
ECEL has an impeccable track record of 36 years of efficient and successful services to the industry. To induce further efficiencies enterprise-wide, it has introduced renowned Lean Sigma system. What does it mean to the employees in terms of new work culture and to the clients in terms of products and services value additions and how the system will enhance the organizational and technological status of ECEL?
Lean Sigma transformation focuses on lead time reduction in all operational activities to increase customer loyalty/ market share, achieve growth in sales, sustain the competitive advantages, and therefore improving stakeholder value. A successful lean Sigma transformation at ECEL will therefore help in bringing about the physical transformation that improves responsiveness, quality, cost and customer service as well as Cultural Transformation that energizes the workforce, releases creativity and encourages teamwork to sustain the improvements.
The current focus on infrastructure development in the country is an important driver to pull the demand for construction equipment. What major segments of construction equipment and machinery are set to grow?
Over the past 3 years, the industry is growing 40% per annum and as a consequence all categories of construction equipment are witnessing a huge growth. However, there will always be some equipment categories which will grow faster than the industry and which, at any time, will be a derivative of the dominance profile of the projects in construction by type, scale and mechanization as well as the available park of an equipment category. Currently, equipment related to construction and development of Roads, Power plants, Real estate, urban infrastructure (Metro, MRTS, Airports etc.) and Industrial infrastructure (Steel Plants, Refineries) are particularly growing faster than the industry. The list includes: Compactors, Paver finishers, Excavators, Backhoe - Loaders, Lifting equipment, Pilers, Crushing, and concreting equipment.
How is ECEL positioning itself in this scenario to turnout improved version of equipment benchmarked to energy efficiency, eco-friendliness, quality up– gradation, and related operational attributes to meet the complex requirements of projects?
At ECEL, we always are improving the product offerings. "Product and application innovation” is our main strategy to remain the market leaders. All our equipment are engineered to meet standards on fuel efficiency, safety, quality, and eco-friendliness.
As far as operational attributes are concerned, we always take the lead in improving the offerings by technological innovations as a continuous on going process. Our new series (TRX ) of Pick and Carry cranes is going to redefine the technology datum in the industry. We have packaged the new series with scores of features to make it suitable for many applications, including heavy duty (and higher height) erection at Mega projects, ability to travel long distance for inter city movements as well as compactness/Maneuverability for intra city applications etc. The safety, operational ease and product utility aspects have been made to match the global standards. Going with our "global leader" status on Pick and carry cranes, TRX series also has the world’s largest articulated Pick and Carry crane as an offering in the range of 22-25 tonnes capacity. For Tandem rollers, we are the only company to offer an asphalt version along with a dual application version.
Recently, we have partnered with the World leaders, such as IHI of Japan (for crawler cranes up to 280 Tonnes) and ALTEC of USA (for power/telecom transmission utility equipment), to market their products in India. Both these product lines are with the most technologically advanced operational attributes in the world in line with the complex requirements of the projects. We have also tied up with WEIHAI HUATA and ALFA for marketing their range of Tower cranes and with these two tie-ups; our offerings on Tower cranes will be the most comprehensive and innovative in the industry.
ECEL has spearheaded important technological developments in earthmoving equipment, in ontemporary range of ABC cranes and materials handling equipment. What is the complete range of ECEL products, its manufacturing facilities and new plans to ramp up its production capacity with state-of-the-art facilities?
The current product range includes:
Hydraulic Mobile Pick and Carry Cranes, Hydraulic Mobile 360 deg Slew Cranes (Rough, Yard and Truck types), Single drum Soil Vibratory Compactors, Tandem Vibratory Rollers for Dual (soil/asphalt) application as well as purely for Asphalt application, TVR for shoulder compaction, Articulated boom Cranes, Front end Loaders, Forklifts, Tower Cranes, Crawler Cranes and Power/Telecom transmission utility equipment.
Over the years, we have been ramping up our capacities. As our sales volumes kept growing (more than 8 times since 2000), we kept ramping our production capacities to meet the demand. Keeping in line with the expected growth in the current businesses as well as our plans of getting into new businesses, we are now investing Rs 60 crores in phase I expansion for creating new facilities at Ballabhgarh and Rudrapur which would double our capacities. The new state-of-the-art facility at Ballabhgarh will have approx. 25,000 square meter of the covered area. The production is slated to start in February 2008 at this plant. Rudrapur plant will go on stream a little earlier. More investment will follow in the coming years.
How is ECEL making its product range price competitive on a sustainable basis with cost of production going up? Apart from organisational measures to contain production costs, what policy measures are needed at Government's end to rationalize the rising production costs?
While it is true that the input costs are growing, the competition is also growing with the same pace every year. Every new entrant uses the price as a tool to gain acceptance in the market. Therefore, it is important for us to keep working towards cost cutting by eliminating the waste and lead times in the operations. Our initiatives on Lean Sigma transformation are in this direction. However, our emphasis is not just alone on cutting the cost by making the operations more efficient; we also work towards improving the VFM (value for money) proposition by adding more customer benefiting attributes and improving the performance capabilities of our equipment.
The government support is required to provide some mechanism to augment R&D activities further to improve the technology and to bring down the costs of the equipment. Government should also play a role in developing human resource with operation and maintenance skill sets for which industry is already facing an acute shortage. This is very important for making the manufacturing operations efficient. Today the workers in India may be cheaper in the terms of wages alone (compared to the developed economies) but viewed in terms of productivity/efficiency they do not compare favorably. There is also a need for an emphasized differentiation in the custom duty structure applicable to imports of components for manufacturing vis-à-vis CBU’s/old equipment imports. This will make local manufacturing more cost effective.
How does ECEL plan to have an efficient country-wide network of dealers, after sales and customer support system to meet the diverse requirements of its clients?
We were the first company to start marketing the construction equipment through a network of dealerships in 1971. Today, after 36 years, our network for product support, spanning over 70 locations, remains probably the most extensive and efficient network in the Indian construction and material handling equipment industry. Over the past three decades, during which it was nurtured and developed, the network has proven its effectiveness to the owners of over 20,000 installations across the country. We have supported our dealerships in developing suitable infrastructure (like workshop facilities), in putting their quality and other management systems in place and by providing training to their manpower. We have two training centers at Bangalore and Faridabad where along with classroom training we also provide practical training on our machines for operation and maintenance. These facilities are used for our customers as well as for our dealerships.
What is the existing market share of the company and what targets are being set for it for the next 3-4 years, having embarked its Lean Journey to operational excellence?
The company has maintained leadership positions in all the product lines it handles. ECEL is not only India’s but the world's largest manufacturer of Pick and carry types of Hydraulic mobile cranes. The company enjoys over 60% market share in value terms. With introduction of new (TRX) pick and carry cranes, increased production capacities and operational excellence, we will increase our market share to 65-67% in next 2 years. For Compaction equipment, we have already emerged as one of the top three manufacturers in the country and are quickly gaining momentum to be at the top in the next few years. ECEL is likely to achieve a market share of 28% in compaction equipment in the current financial year. The company is the largest supplier of the LPG–based forklifts with over 90% market share. The company has plans to achieve leadership in diesel forklifts as well in the next 3 years.
ECEL has an impeccable track record of 36 years of efficient and successful services to the industry. To induce further efficiencies enterprise-wide, it has introduced renowned Lean Sigma system. What does it mean to the employees in terms of new work culture and to the clients in terms of products and services value additions and how the system will enhance the organizational and technological status of ECEL?
Lean Sigma transformation focuses on lead time reduction in all operational activities to increase customer loyalty/ market share, achieve growth in sales, sustain the competitive advantages, and therefore improving stakeholder value. A successful lean Sigma transformation at ECEL will therefore help in bringing about the physical transformation that improves responsiveness, quality, cost and customer service as well as Cultural Transformation that energizes the workforce, releases creativity and encourages teamwork to sustain the improvements.
The current focus on infrastructure development in the country is an important driver to pull the demand for construction equipment. What major segments of construction equipment and machinery are set to grow?
Over the past 3 years, the industry is growing 40% per annum and as a consequence all categories of construction equipment are witnessing a huge growth. However, there will always be some equipment categories which will grow faster than the industry and which, at any time, will be a derivative of the dominance profile of the projects in construction by type, scale and mechanization as well as the available park of an equipment category. Currently, equipment related to construction and development of Roads, Power plants, Real estate, urban infrastructure (Metro, MRTS, Airports etc.) and Industrial infrastructure (Steel Plants, Refineries) are particularly growing faster than the industry. The list includes: Compactors, Paver finishers, Excavators, Backhoe - Loaders, Lifting equipment, Pilers, Crushing, and concreting equipment.
How is ECEL positioning itself in this scenario to turnout improved version of equipment benchmarked to energy efficiency, eco-friendliness, quality up– gradation, and related operational attributes to meet the complex requirements of projects?
As far as operational attributes are concerned, we always take the lead in improving the offerings by technological innovations as a continuous on going process. Our new series (TRX ) of Pick and Carry cranes is going to redefine the technology datum in the industry. We have packaged the new series with scores of features to make it suitable for many applications, including heavy duty (and higher height) erection at Mega projects, ability to travel long distance for inter city movements as well as compactness/Maneuverability for intra city applications etc. The safety, operational ease and product utility aspects have been made to match the global standards. Going with our "global leader" status on Pick and carry cranes, TRX series also has the world’s largest articulated Pick and Carry crane as an offering in the range of 22-25 tonnes capacity. For Tandem rollers, we are the only company to offer an asphalt version along with a dual application version.
Recently, we have partnered with the World leaders, such as IHI of Japan (for crawler cranes up to 280 Tonnes) and ALTEC of USA (for power/telecom transmission utility equipment), to market their products in India. Both these product lines are with the most technologically advanced operational attributes in the world in line with the complex requirements of the projects. We have also tied up with WEIHAI HUATA and ALFA for marketing their range of Tower cranes and with these two tie-ups; our offerings on Tower cranes will be the most comprehensive and innovative in the industry.
ECEL has spearheaded important technological developments in earthmoving equipment, in ontemporary range of ABC cranes and materials handling equipment. What is the complete range of ECEL products, its manufacturing facilities and new plans to ramp up its production capacity with state-of-the-art facilities?
The current product range includes:
Hydraulic Mobile Pick and Carry Cranes, Hydraulic Mobile 360 deg Slew Cranes (Rough, Yard and Truck types), Single drum Soil Vibratory Compactors, Tandem Vibratory Rollers for Dual (soil/asphalt) application as well as purely for Asphalt application, TVR for shoulder compaction, Articulated boom Cranes, Front end Loaders, Forklifts, Tower Cranes, Crawler Cranes and Power/Telecom transmission utility equipment.
Over the years, we have been ramping up our capacities. As our sales volumes kept growing (more than 8 times since 2000), we kept ramping our production capacities to meet the demand. Keeping in line with the expected growth in the current businesses as well as our plans of getting into new businesses, we are now investing Rs 60 crores in phase I expansion for creating new facilities at Ballabhgarh and Rudrapur which would double our capacities. The new state-of-the-art facility at Ballabhgarh will have approx. 25,000 square meter of the covered area. The production is slated to start in February 2008 at this plant. Rudrapur plant will go on stream a little earlier. More investment will follow in the coming years.
How is ECEL making its product range price competitive on a sustainable basis with cost of production going up? Apart from organisational measures to contain production costs, what policy measures are needed at Government's end to rationalize the rising production costs?
While it is true that the input costs are growing, the competition is also growing with the same pace every year. Every new entrant uses the price as a tool to gain acceptance in the market. Therefore, it is important for us to keep working towards cost cutting by eliminating the waste and lead times in the operations. Our initiatives on Lean Sigma transformation are in this direction. However, our emphasis is not just alone on cutting the cost by making the operations more efficient; we also work towards improving the VFM (value for money) proposition by adding more customer benefiting attributes and improving the performance capabilities of our equipment.
The government support is required to provide some mechanism to augment R&D activities further to improve the technology and to bring down the costs of the equipment. Government should also play a role in developing human resource with operation and maintenance skill sets for which industry is already facing an acute shortage. This is very important for making the manufacturing operations efficient. Today the workers in India may be cheaper in the terms of wages alone (compared to the developed economies) but viewed in terms of productivity/efficiency they do not compare favorably. There is also a need for an emphasized differentiation in the custom duty structure applicable to imports of components for manufacturing vis-à-vis CBU’s/old equipment imports. This will make local manufacturing more cost effective.
How does ECEL plan to have an efficient country-wide network of dealers, after sales and customer support system to meet the diverse requirements of its clients?
We were the first company to start marketing the construction equipment through a network of dealerships in 1971. Today, after 36 years, our network for product support, spanning over 70 locations, remains probably the most extensive and efficient network in the Indian construction and material handling equipment industry. Over the past three decades, during which it was nurtured and developed, the network has proven its effectiveness to the owners of over 20,000 installations across the country. We have supported our dealerships in developing suitable infrastructure (like workshop facilities), in putting their quality and other management systems in place and by providing training to their manpower. We have two training centers at Bangalore and Faridabad where along with classroom training we also provide practical training on our machines for operation and maintenance. These facilities are used for our customers as well as for our dealerships.
What is the existing market share of the company and what targets are being set for it for the next 3-4 years, having embarked its Lean Journey to operational excellence?
The company has maintained leadership positions in all the product lines it handles. ECEL is not only India’s but the world's largest manufacturer of Pick and carry types of Hydraulic mobile cranes. The company enjoys over 60% market share in value terms. With introduction of new (TRX) pick and carry cranes, increased production capacities and operational excellence, we will increase our market share to 65-67% in next 2 years. For Compaction equipment, we have already emerged as one of the top three manufacturers in the country and are quickly gaining momentum to be at the top in the next few years. ECEL is likely to achieve a market share of 28% in compaction equipment in the current financial year. The company is the largest supplier of the LPG–based forklifts with over 90% market share. The company has plans to achieve leadership in diesel forklifts as well in the next 3 years.
NBM&CW January 2008
