Product & service quality are key differentiators for Indian OEM users of industrial bearings, whose vendors are grappling with ways to keep spurious goods makers at bay.
by Mitalee Kurdekar
Right from high-end automobiles to wind turbines, industrial bearings find use in a large number of applications. In short, these anti-friction components are seen wherever there are products with moving parts that require smooth performance, making them a unique component because of their universal relevance. Repetitive demand is yet another feature of the industrial bearings market. While most industrial bearing products are of a standard type, their lifespan depends upon actual wear and tear within the moving parts of the products in which they are used, and hence cannot be directly linked to the lifespan of products or machines. As a result, the market always generates a consistent after-sales or replacement demand. Such aftermarket demand is prevalent largely in the automotive and industrial segments, wherein one notices a large consumption of industrial bearings.
The Indian bearings industry, which comprises of large- and medium-scale manufacturers, is no exception to the above norm, in the sense that almost half its demand comes from the automotive segment. Also, after a slight slowdown, the recent spurt witnessed in the automotive industry’s growth has further escalated the demand for bearings. With an increase in general purchasing power and shift in middle- and lower-income group income levels, the demand for both two-wheelers and four-wheelers has been steadily rising in the past few years. Thus, this has helped the industrial bearings market demand immensely within India. With initiatives like Make in India and the overall special emphasis laid on the manufacturing sector by the Indian Government, the demand for bearings from the industrial segment is also large, and growing.
Given this scenario, many global players have already set up their manufacturing units in the country in order to take advantage of the growing Indian market. This has had a positive impact on the quality of such products being consumed locally, while also setting India up to become an exporter of these goods. In fact, with the quality of bearings being imperative, particularly for unhindered operations and high-uptime of user machines, market competition is focused less on price competition, and instead is largely based on value differentiation in the marketplace. Of course, this happens to be a rather distinctive feature of the otherwise price-sensitive Indian market.
Demand-driven Market
As a matter of fact, the Indian bearings market has matured rather well. The most heartening fact about the Indian bearings market is that it is demand that is chasing supply in the marketplace. However, this brings its own set of challenges to the manufacturers and vendors operating in this space. It is interesting to see just how these issues get successfully tackled by them, with equal co-operation from quality-conscious customers.
As Carl Orstadius, MD, SKF India, says, “Bearings are critical for nearly all motion applications, making it mandatory for all industries using machinery and related motor-driven linkages to use bearings. The Indian Government has given a major impetus to its Make in India campaign, which has in turn given an increasing push to manufacturing, and made it possible for the industrial sector to grow at 3.5%. In addition to this, the Government of India’s ambitious plan for electrification of all vehicles by 2030, both personal and commercial, has challenged bearing companies to come up with innovative solutions for growth and partnerships.”
However, even with high demand, things have not been easy for makers of industrial bearings in India. Customers in the manufacturing sector are fastidious regarding the quality of bearings as they use them in high-end precision machines or original equipment where the investment is significant, and use of bad quality bearings could affect the uptime performance and prove costly in the longer term. On this front, Rahul Karambelkar, GM, materials, Bajaj Auto, suggests, “We have various vendors – MNCs with India operations as well as domestic players. They all are very good suppliers in terms of quality and brand. However, our choice is majorly driven by our product performance and business needs. We have a stringent product validation process.”
Anand Tawde, AGM, design, Godrej Material Handling Division, Godrej & Boyce Mfg. Co., supports this view. “We are in the business of designing, manufacturing and servicing of forklift trucks, warehouse equipment and various attachments required for material handling equipment. Bearings are an integral part of material handling equipment like forklift trucks. We see many local/regional suppliers operating in this market. They suffice the non-critical and after-market requirements, but are not suitable for OEM requirements as process quality is a major issue. The authenticity of branded bearings is a major challenge to OEMs like SKF and Timken. We also see many Chinese brands entering the Indian market at various price-points, but what is available in the market at low price is not good for heavy-duty application. We do see niche applications being catered to by global players,” he points out.
On average, a Godrej diesel forklift truck typically uses 15 different sizes of bearings. These range from ball, to taper roller, cylindrical roller, needle roller, thrust roller, and self-aligning to slewing bearings, used in various systems of a forklift truck such as the mast and load carriage (lifting system), load-tilting system, drive axle, steer axle, transmission and rotating attachments.
Customer Collaboration & Hand-holding
Given the fact that each customer has specific needs, there is a lot of exchange that takes place between the OEMs of industrial bearings and their clients, in order to evaluate the suitability of a product according to the purpose that it is required for. Tawde explains, “We involve our partners upfront in the product design. Application layout with load diagram and other relevant details like life expectancy etc. are shared with the bearings partner to ensure that any new design has an apt bearing solution. The key business requirements for procuring bearings are quality, reliability, availability, delivery (TOC/replenish to stock), and the technical & after-sales support of the bearings partner. The selection of a partner depends on the quality, testing facilities and market performance of product/partner, as well as the criticality of the bearing in the system.”
Things are not too different at Bajaj Auto. Karambelkar states, “At Bajaj Auto, we have regular engagements with bearing manufacturers. We involve them early in the product development process. We also engage them in exploring new technologies (like low-friction bearings) and global benchmarking. Our key business requirements of procuring bearings are based on QCD (quality, cost and delivery or capacity) parameters. We have a long-term partnership approach with vendors, and work with long-term commitments. For any new product development, vendor selection is based on our brands and the business plan (product and volume matrix).”
Orstadius explains SKF’s strategy in this context. “SKF is now transitioning from a component manufacturer to a more value-centric proposition for its discerning customers. SKF’s Rotating Equipment Performance (REP) provides solutions that would enable customers to maximise performance, reduce the Total Cost of Ownership (TCO) and increase machine reliability.”
He adds, “Our India Distribution Centre (IDC) is strategically located in the industrial belt of Maharashtra and in the vicinity of key automobile manufacturers. It is also well connected with the factories to ensure better availability of stocks and to serve the customers at the shortest possible time. The IDC is a world-class facility that helps SKF improve its logistics structure and serve its customers better.”
Business Challenges, not Hindrances
Despite these improvements, there are some inherent challenges to contend with. One big challenge is the pricing of bearings in India. Though local pricing is lower than similar imported ones, they cannot compete with cheaper imports from China. Therefore, the challenge for local manufacturers is to sustain pricing competitiveness. This is attained by volume expansion and competitive material procurement.
Customers also have other benefits enticing them to the leading brands in the market. As Orstadius suggests, “Today, with every SKF product, the customer not only buys quality but usually also avails services offered by the manufacturer, like availability of the product, adherence to delivery deadlines and guarantees, service and consulting services. Consequently, it is not a question of how a product is priced, but of the total cost of a solution.”
On their part, customers are moving towards faster speeds and even greater performance requirements than ever before. “In such cases where productivity, precision and performance play an important role, it is really all about the best solution for the need, rather than the best price for the need,” believes Orstadius.
Tawde provides an important justification from a customer’s perspective, when he says, “Although bearings fall at the bottom of the cost structure of an equipment, its failure can lead to high-cost of repair and heavy downtime of the equipment. From this perspective, bearings are critical when it comes to TCO.”
Another cause for grave concern has been spurious or counterfeit products, which cause hassles for both genuine manufacturers and their quality-conscious customers. Orstadius says, “Counterfeit products are found in all markets and are of all types and sizes, with all premium industrial brands being subject to counterfeit risks. The problem of counterfeit bearings has become more widespread in recent years, and all markets are now susceptible to receiving these unpredictable quality products of brands unknowingly.”
He adds, “The financial damage resulting from the counterfeit products is difficult to quantify. All efforts and dedication to improve Overall Equipment Effectiveness and operational costs can quickly change if the customer uses a counterfeit in their operations. If installed in safety critical equipment, counterfeit products may present a great safety risk for people and the environment. SKF shows no tolerance for counterfeit products and works hard to keep counterfeits away from the market. We assist local authorities continuously in taking action against this illegal activity.”
All said and done, competition between overseas and local players is helping customers, especially since the competition is based on service parameters rather than just price. Orstadius says it best: Whether the manufacturer is Indian or global, the customer wins.