With the mantra of Vocal for Local, the government is seeking to offer as many components for manufacturing to the Indian companies – mainly SMEs and MSMEs. The government has been pushing for Make in India for almost all sectors to boost the country’s manufacturing capabilities. But the question here is how easy is it going to be to source world-class components in India?
India is one of the fastest-growing economies in the world and offers enormous growth and productivity opportunities. The government’s efforts to promote ‘vocal for local’ is a reflection of India’s renewed focus on self-reliance or ‘Atmanirbhar Bharat’. As the country moves in this direction, co-development and co-manufacturing programmes can offer an impetus to catapult India’s goal of self-reliance in the aerospace and defence sector. Several companies continue to grow a globally competitive supplier base in India, with strong partnerships that are aligned with the government’s vision of an Aatmanirbhar Bharat.
Most companies are of the view that ‘Vocal for Local’ campaign is certainly a welcome step and will give confidence to the industry to participate in IDDM (Indigenously design, develop and manufacture). The Indian public and private industry will focus on building further capabilities to strengthen the offerings including the defence sector. These indigenized developments will bolster the defence logistics industry. Now with more clarity on the restricted items, the industry will focus on specific products development. This will also allow suppliers to participate with OEM’s in development and growth.
Ashwani Bhargava, director supply chain, India Enterprise Boeing, said, “As a company with over seven decades of presence in India, Boeing has supported the development of indigenous aerospace and defence capabilities in the country. We have invested in partnerships in the Indian aerospace ecosystem in multiple areas of skilling, research & technology, and manufacturing.”
Bhargava further added that this relationship has grown as the focus has shifted from ‘supplier management’ to ‘supply chain management.’ “We are working closely with our suppliers in India to support supply chain health, identify new ways to drive innovation and deliver greater value to our customers. Today, our sourcing from India stands at US$1 billion a year from more than 225 suppliers who are manufacturing critical systems and components for some of Boeing’s most advanced products.”
Kishore Jayaraman, president, Rolls-Royce India & South Asia, said, “This co-development will lead to the creation of a stronger ecosystem for local production with global supply chain and export capabilities, and help accelerate economic growth. This is where Rolls-Royce, with a strong line-up of future-ready technology, focus on sustainability, significant R&D investments and proven commitment to India has a meaningful role to play.”
Jayaraman further said that the Rolls-Royce journey in India is the original ‘Make in India’ story that has only grown stronger year on year. As India embarks on a path to attain self-reliance, Rolls-Royce is a natural partner to India’s ambitions, being well-positioned to offer talent, technology and capabilities to co-create solutions locally.
Rajat Gupta, head, defence, Ashok Leyland, said, “We, at Ashok Leyland, are proud to be one of the largest mobility suppliers to the Defence sector for over five decades and we can be part of any mobility solutions which can be delivered with high standards.”
Effects of change in procurement
The Indian aerospace and defence market presents an attractive and significant opportunity for Indian and foreign companies across the supply chain. India has the third-largest armed forces in the world, and its defence budget is about 2.1% of its GDP. India is one of the largest importers of conventional defence equipment and spends about 40% of its total defence budget on capital acquisitions. About 70% of its defence requirements are met through imports. However, with the release of DAP 2020, the impetus is on “Atmanirbhar Bharat” where 50% of the value equivalent components must be indigenised, which means Indian companies have more opportunity and they can tie up with Foreign OEM’s for developing components in India. This new procurement measures are certainly going to give a boost to Indian Industry especially aerospace, explained Gupta.
SM Vaidya, executive VP and business head, Godrej & Boyce, said, “It is rare for the procurement of defence products to happen as per catalogue as most of the time, it is a specially designed or suited product that goes in assembly. Sourcing of these products from other competitors becomes a challenge. Also, in India, we still do not have recognized Indian standards or specifications therefore, if we are changing country of origin then comparing two international standards becomes challenging. Hence, when such products are to be developed, we will need to have a fair understanding of primary and secondary standards. Fine-tuning of such products may be tricky and may create conflict with the rest of the systems.”
Bhargava stated that Boeing is committed to a global supply base, as it helps us find every opportunity to bring more value to our customers. “We build our supply base with a focus on integrity, safety, and quality. These tenets guide our supplier relationships and foster an environment of transparency and collaboration at each step. This approach to partnerships accelerates productivity improvements and operational efficiencies year after year.
“A global supply base helps us bring more value to our customers and we plan to leverage India’s supply chain capabilities in a wider sense to build the country’s aerospace and defence ecosystem. Boeing values help grow a broad spectrum of supplier capabilities. The market will continue to demand continuous improvements and improved affordability. Our collaboration with suppliers drives innovation that helps to provide the highest quality products and services with the value our customers require. This integration helps suppliers improve their capabilities and move up the value chain — which benefits all of us,” Bhargava elucidated.
Updating skills, equipment
For the manufacturing to be extensively carried out locally, companies have to ensure that SMEs and MSMEs are well equipped and know to use the latest equipment and modern technology bring the best.
Talking on the subject, Gupta said, “We work with MSME to help raise their standards in improving their manufacturing processes to conform to BS6 design requirements which are stringent and at world-class levels. All our training centres are equipped with the latest technology and we have always given top priority to nurture young talent and convert them into a world-class skilled workforce to match up with the ever-changing auto industry.”
Bhargava explained that presently, their supplier base in India has grown to more than 225 suppliers and is globally competitive. An installed platform base with commercial and defence customers in India and an expanding supplier base makes it imperative for them to invest in, develop, and nurture talent. Through their skilling and up-skilling initiatives, they are developing Indian MSMEs, and training hundreds of pilots, aircraft maintenance engineers, technicians, and frontline factory workers across India with partners like Tata, Rossell Techsys, Jaivel, Indo MIM and Lakshmi Machine Works.
Similarly, over the past few decades, Rolls-Royce has forged many partnerships in India, to build and grow the aerospace ecosystem in the country. They have been working with supply chain partners like Bharat Forge, Godrej & Boyce, Tata as well as several startups and MSMEs to source components for their global supply chain, with plans for sourcing further complex commodities from India over the coming years. Their joint venture with Hindustan Aeronautics Limited called International Aerospace Manufacturing Pvt. Ltd. (IAMPL) is a good example of how the supply chain capabilities and the ecosystem have evolved in India. Today, IAMPL is a fully accredited benchmark manufacturing facility within the Rolls-Royce global supply chain, manufacturing more than 130 different aero-engine components for the technologically advanced Trent family of civil aero engines.
“Today, we are not only sourcing components in India, but also contributing to the global R&D ecosystem with the help of the engineering talent in India. We have invested in skill-building and training of engineering talent in the country over many years, and today, Indian engineering talent contributes significantly to critical global R&D projects to develop products and services, with a focus on efficiency and sustainability,” Jayaraman stated.
Vaidya said, “We have done an extensive survey of the MSME sector and have participated in many seminars held by CII with MSMEs. Those who want to have long term planning for Aerospace and Defence have been selected by us as Godrej Aerospace Cluster Partners. These organizations get inducted into our system after a thorough audit.”
The gaps are identified in manufacturing systems and capability-capacity, tool and fixture designing; and their manufacturing, process planning, inspection, infrastructure, manufacturing practices/ initiatives to become globally competitive and financial disciplines, recruitment and training, values and safety, environmental practices. Depending on the gaps identified, their experts will work with them and close these gaps before they start developing the first article with them. Every month they conduct training on the selected topics and allow these partners to visit us (currently virtual visits) to see how they have established Aerospace & Defence manufacturing at our Vikhroli, Mumbai campus. “We maintain complete transparency with all our supply chain partners and that helps to co-develop many assemblies by sharing resources seamlessly,” concluded Vaidya.