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Just like our spinal cord, Tool Rooms are the spine of any industry. Whether it is prototyping, new product development or improving existing components, the design lands in a Tool Room from the design desk. Due to this vitality,Tool Roomsplay a pivotal role in the industry. Hence this sector to remain active, vibrant and cost-effective is very essentialfor the national growth.
Competition, which is good overall, be it fromwithin the country or from outside,have helped to bring down the prices. Butcompetition beyond a point from countries like Chinahave considerably brought down the profit margins also. Certain countries in fact are known to have fine-tuned the art of producing castings in humongous numbers that bring down the cost per unit to unthinkable levels. That, and newer technologies threaten the very basis of production industries as we know them today.
With die and moulds being a need of practically every industrial set-up, metal or non-metal, the industry is ripe for a change given that India as an economy and a growth-driver would throw up tooling requirement with a YOY growth rate of approximately 8% from the present INR 18000 crores to a whopping INR 25000 crores in the next 5 year as per a recent Tagma study.
The industry therefore has high potential which is yet to be explored and exploited. Challenges to its growth include high initial capital investments in high-end machinery including tooling, advance CAM software and the presence of a large number of machining centres that produce parts in ever increasing numbers with hardly any differentiators. This means the industry while making heavy initial investments, makes parts whose per unit profits are rather low. Mass production and low differentiation has made the output of this technical industry generic with very little scope for branding and specialization.
The result as is clear from the above, is that the industry is stuck in a vicious circle where they keep producingeverincreasing numbers just to survive – while every incremental piece of output reduces its worth by lowering already tight margins. Replenishing older machines with the latest are invariablyexpensive and is becoming quite a task due to ever-reducing per unit profits.
Despite of having excellent brains and set-ups in this sector, one of the main reasons behind the woeswhich are listed above, is the age old thinking of “only me or else nothing”. We have to get out of this attitude and stop working in isolation. And the concept of MOULD FACTORY was born out of this thought process.
MOULD FACTORY is theconcept of a VIRTUAL TOOLROOM where instead of one’s own setup with limited resources, a pool of Tool Rooms is created. This will create an atmosphere where the spare capacity of existing individual manufacturing setups can be shared to speedily design, manufacture and channelise individual strengths to produce standardized common parts efficiently with decent economics. For each unit, despite tight schedules, it can bepossible to squeeze some spare capacity for common parts and thus ensure the survival of the industry and also their own. In short, MOULD FACTORY concept is pooling in the limited resources of each unit and utilising the combined resources as one unit.
The concept of the MOULD FACTORY works on the principle that while some units may be short on capacities, there will be others with excess idle capacity which can be put to good use- instead of simply buying more capacities and getting into the vicious circle of high-cost investments vs low-profit output. The concept has many advantages like:
- Speedy delivery with quality at competitive prices and decent margins.
- Highest capacity utilization leading to quicker ROIs and lower operational costs.
- Income of participating units remain stable at all times.
- Every client unit working efficiently when parts are available on JIT basis.
- Everyclient unitcan concentrate more of their efforts and energies on R & D or newinnovative product development because of the savings in time and resources.
- Creating meaningful industrial hubs which besides producing, cantrain newer talent and be the voice of the industry for meaningful interactions.
Take a simple example, the cigarette lighter available at every small “pan shop” all over India which isimported from China. Not ofvery high quality but serves the purpose.But the matter that has to be introspected here is, despite of having multiple small components, multi-level margins, multi-level taxes, multi-level transportation etc., it costs only 10 Rs. For us to manufacture the same lighter, considering the current setup, it will cost minimum 40 Rs. This is just one example, all of us are aware that there are many, many other examples like this from China. Chinese have not done any miracle by waving a magic wand, they have simplyfine-tuned the concept of working together by pooling in limited resources and specialising.
The MOULD FACTORY is not just another fanciful idea but is the need of the hour. Every Tool Roomin India can be part of this concept and takeadvantage of the pooled in resources!
Let us not mercilessly compete with each other but complement with each other’s capacities. The industry will survive and flourish to move towards the goal of ATMANIRBHAR BHARAT