Auto component productivity takes big leap
Increasing use of technology, skilled workers bring the chance
RAVI KRISHNAN
Posted online: Monday, May 01, 2006 at 0119 hours IST
NEW DELHI, APRIL 30: The Indian auto component industry has witnessed a sharp increase not only in quality but also in productivity in the past few years. Revenues have risen by a compounded annual growth rate of 25%, outstripping the growth in employment which is at 5%. Consequently, productivity, as measured by revenue per employee, has increased from $22,500 in 2002-03 to $30,923 in 2005-06, according to data compiled by the Automotive Components Manufacturers Association (Acma). Lean manufacturing, Kaizen, total factor productivity - terms once confined to management textbooks - have suddenly become part of the discourse among the industry players, small and big players alike.
"This sharp increase in productivity is linked to increasing use of technology along with the best in class management techniques," says Amit Kalyani, executive director of Bharat Forge. Per employee turnover in Bharat Forge has risen from Rs 17 lakh in the fiscal 2002 to Rs 42.5 lakh in 2004-05.
"One of the key reasons for the increase in productivity is that manufacturing has moved from process-orientation to product-orientation," says Sona Koyo chairman and managing director Surinder Kapur. Other factors that have equally contributed to the rise in productivity include the gain in skills of workers and more balanced production lines (ie elimination of bottlenecks and so on).
However, India still lags behind the productivity of a country like Japan, where sales per worker is estimated at $50,000, nearly 70% more than that of India. "The increase in our productivity has not come from a huge increase in capital investment. Employees are still working the same number of hours. It's that we are using our capital assets better," explains Dr Kapur. While revenues for 139 auto ancillary companies, for which data is available with the research body CMIE, show a doubling of revenue in the period under review, gross fixed assets grew only by 73%.
