WABCO Wins India With Global Standards At Local Cost

The Brussels-based WABCO, a global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles, continues to pioneer breakthrough innovations for advanced driver assistance, braking, stability control, suspension, transmission automation and aerodynamics.
WABCO India designs, manufactures and markets conventional braking products, advanced braking systems, and other related air-assisted products and systems. The company has a major share in the Indian OEM market and aftermarket. It has five world-class manufacturing facilities, software design centre, application engineering centre, a test track and nation-wide distribution network. “We do not give the products developed in Europe to customers in India. We develop products here that meet the local needs considering cost, and necessary functionalities that align with our global standards and development programmes. This is how we have evolved in India”,
P Kaniappan, Managing Director, Wabco India, told T Murraliof AutoParts Asia, in an exclusive interview. The excerpts:-

Q: Globally WABCO has a three-pillar strategy, technology leadership, globalisation and excellence in execution, which applies to all the plants across the globe. When it comes to India, how are these things relevant? How do you sandwich globalisation between the other two?

A: WABCO is a truly global company having nationalities from many countries. This is a company that is ahead of the curve in terms of looking at emerging markets. Even before the financial crisis our CEO looked at the potential in India and China; we came here to take advantage of the inherent opportunities available. Second is that we don’t have the concept of expats coming and running the company here – we believe that local leaders must run local business as they are used to the cultural environment. Of course we take the support of the global team whenever needed.
The third dimension is that we do not give the products developed in Europe to customers in India; we develop products here that meet local requirements and customer needs considering the cost and necessary functionalities, definitely well aligned with our global standards and development programmes. That is why we are positioned in the top rank in these markets.

Q: It is the ‘minimum cost of ownership’ that drives business as that’s what the customer wants. Some of the OEMs tell suppliers to approach them only if they also supply to European OEMs. How do you cater to this? What are the pain points here?

A: There are two dimensions to this issue. One is that the standards and specifications should meet global standards. In India we take the full support of our global development base. India’s strength comes from our ability to design these products with global standards in a most cost effective and frugal manner. We have been in India for the last 50 years and have continuously improved our cost leadership capabilities through target costing, value engineering, lean manufacturing and so many other practices that have given us a strong position on how to look at cost. So now we have global standards at Indian cost, which is what the Indian customer wants. It is a blending of three – cost, global standards and product access. This is how we have evolved in India.

Q: Innovation makes the suppliers stay afloat as only innovative products will help OEMs but it comes at a cost. Beyond a point the scope is limited to meet global standards because you have to squeeze in the cost advantage. How do you overcome the challenges arising out of this situation?

A: One is the change in scale. For example, when ABS came to India the volume increased 10 times, so the easiest option was to go in for localisation and approach the development centre available here. What we are doing now is to see how we can help customers improve tyre life using ABS. Without ABS the tyres will be pulled to one side when you apply the brakes; ABS makes sure the tyres stop at that point, so tyre life is increased as wear and tear is reduced. Also, ABS prevents roll back when the vehicle is going up a gradient which again reduces wear.
The third one is how we can give electronic stability control with the same investment that the customer has made. We have a system called electronically controlled air processing that contributes to saving of fuel of about 1.5 percent.
Finally it all boils down to the total cost of ownership; if the customer is convinced there is a payback for investment, he will go for it. Mobilising vehicle intelligence to improve safety and efficiency is our focus now. BS-IV will drive these new technologies into the market. We will take advantage of the increase in scale, combined with localisation, to reduce the cost of manufacturing.

Modular AMT

Q: Is the smart compressor in the system already being supplied to customers in India?

A: Yes, some customers have started using it; it comes as a package.

Q: What are the other innovative products in line?

A: We are now moving to telematics and fleet management solutions. For Wabco, apart from safety and efficiency, the third dimension of the value proposition is connectivity. We acquired a company called Transics a few years ago and in India have already launched the fleet management solution that was initially started as a base system for the aftermarket. Now we have an advanced system with CAN connectivity etcwhich is a cost effective solution with lots of functionalities that also help in monitoring and predictive maintenance.
As we move to autonomous driving the advanced emergency braking system can stop the vehicle longitudinally and the use of telematics will inform the driver the speed range of operation to get the best fuel efficiency. We have sold nearly 3,000 sets of this fleet management solution in the aftermarket and are also supplying it to an OEM.

Q: This is a plug and play product for the aftermarket or is it for OE supplies?

A: It is both. It is a standard system for use in fleet. From the control room, at a basic level, you can see where the vehicle is running. What we are trying to do is to see how the fleet itself can become more efficient by tracking the trucks coming into our factory from a distance of two km so that work on the truck is done in optimum time.

Q: In your experience, to what extent has the time come down?

A: Right now I don’t have the data to share with you but my gut feeling is time saved is 50 percent. The idea is to minimise the waiting period so that the transport company becomes more efficient. The differentiation comes when you show the fleet how efficiently it can be run and the savings from this operation.

Q: What are the challenges in manufacturing? The cost arbitrage for Indian industry as a whole is comingdown though technologically they have raised the bar – there is always a trade-off. The same applies to WABCO in India, so what are the initiatives you have taken at the manufacturing facilities to overcome this?

A: In the WABCO  model in India we are not actually looking at the labour cost arbitrage as an element of cost competitiveness. It is there but it is not the main scope. Our scope is to be lean in the value chain; we are one of the few companies to implement lean practices as early as 2000. Our model is lean in investment first – this is one of the leanest facilities – the lean comes out of minimising investment.
We have a machine here, bought in 1976, recently refurbished by us. I am sure it will work for another 20 years; we have upgraded the machine to include features of the Internet of Things – it has features that even new machines don’t have. Our fundamental approach to improve capacity is first to eliminate waste in the system. The second step is to go in for cycle time reduction and remove bottlenecks. Thirdly, if you have exhausted all other options, then only do you go in for lean investment. We still go for simple machines and then use our engineering capability to make our own facilities. This helps us to compete in the market continuously. This is number one.
Number two is that the entire supply chain may need constant upgrading. Our chain is one of the leanest and our suppliers have been working with us for more than 30 years. We deploy the same practices we do with them. To a large extent we try to offset inflation through productivity in the entire supply chain.
The third dimension is the investment on inventory and other things. We are moving rapidly to a direct-supply-to-line model in which either we or the suppliers hold inventory so both our production lines are linked invisibly; the supplier produces at the rate that I do through a TAKT-time type of interface. In each of our manufacturing cells we continuously re-engineer with a focus on labour productivity etc. Since we are a welfare-oriented company we try to reduce the manual work content through simple, low-cost automation.

Q: What about Internet of Things and Industry 4.0; how are you leveraging these emerging technologies?

A: We are trying to do in our own way to make sure we reduce the cost of operations; it is a continuous journey. From the TQM framework, there are two things we constantly practise: Employee involvement and continuous improvement in everything we do.These are the two pillars on which the whole system stands. We call it unleashing the passion of the people; to me it is the ability to see opportunities constantly.

Q: You want to match the TAKT time of your customers with that of yours and your suppliers’. That is a big challenge because you are sandwiched between your customer and down the line supply chain. Any fluctuation would affect you first. Also, the days of holding inventory are gone. So your operating bandwidth is very limited, still you have to innovate and save cost. How do you do that?

A: We use the seven-step approach to lean manufacturing, something that we practise in India. First is to map the value stream to get the total picture of customer to supplier and within that framework to find out how the information and material flow. These are the two elements of the value stream mapping concept. For every TAKT time one piece has to flow from the supplier to the customer at the fastest possible rate without any waste in the system – that is what the value stream is supposed to deliver.
But in reality there is something called value added ratio. If a material moves from a supplier to a customer in two days, the actual value of the time may be only a few minutes or an hour; the rest of the time it is only waiting. Scrap in the system, material movement, handling, inspection, etc are all waste, except the value added to the portion of the work; that is the only time the component gets added value. The whole concept of lean manufacturing is how you are able to see waste versus value-addition. Anything that improves value-addition and minimises waiting time will contribute to lean manufacturing.
What we do first is create a physical flow. If the work goes to different suppliers before coming to us, we try to find out if one supplier can do all the jobs. This can save not only time but also unnecessary documentation. You can also save on logistics and transportation. Earlier, we never saw these things but there is a huge opportunity here for savings at different levels. The third step is balancing to the TAKT time where you have to balance the multiple machines working in an assembly. To do this we have created many manufacturing cells. Next is communication and effective information flow throughout the supply chain.

Q: You have a control on your system and your suppliers but you cannot have control over your OEMs. So if you map the value chain, one is always dynamic, which is the customer. How do you exercise control?

A: There are two philosophies in this. One is producing and pushing whatever you have produced to the customer called the push system. The other one is the pull system where you respond to customer needs. Today, what we do is either have a vendor managed inventory at the customer’s site or a warehouse or plant close to the customer. The customer goes to the portal, selects the items for the day and informs it to you. You deliver from your stock to them and replenish your inventory constantly; that is the model followed. Though my line is linked to both my customer and supplier based on TAKT, the reality is that every time you cannot connect, you need to have a buffer in-between. Through this buffer you are actually de-coupling yourself from the customer as he will alwaystake the items from the stock in the buffer. This is an element of the lean model that we do in Wabco India.

Q: When it comes to quality, producing one product is fine but the challenge is in sustaining quality. With all the variations you have, how do you control this?

A: Our model is based on the TPM driven system though we are now taking a lot of input from our global practices particularly related to change control. We must have a mechanism to prevent any failure to the customer from getting repeated; the preventive or corrective action must be robust enough. Also, you must make sure you have a firewall in the system, whatever you deliver. If you can’t prevent a defect from occurring you must put in a firewall. There must be no drastic change when new operators, systems, suppliers or processes come in; for effectiveness there must be control over change management. Real sustainability comes when you put in capable processes – it must be a capability driven system. Very recently we have gone through a major quality transformation, taking a lot of input from global learning.

Q: Can you throw more light on the transformation?

A: With all the product liability issues, risk management is very critical here. Missing something small could result in a major catastrophe. So change control is very crucial as we change designs and introduce new products; these are some of the new dimensions of Quality Management.

Q: For the supplier, the cost of ensuring continuous production quality has to come down otherwise it will eat into his bottom line. What are Wabco’s safety reins in India?

A: The real strategy is to create a capable organisation in which all the processes are capable at the design stage itself. When you invest on a new line you make sure the process capability is as per the required level of minimum 1.67, which means that you prevent fault recurrence with consequent savings in cost. Improving quality need not necessarily cost money; one must make sure that certified competent people with the right skills are there at the right time and right place.

Q: Tell us about your technical centre. Does it help the global organisation to go connected? What is its overall contribution, particularly for the connectivity towards mobility?

A: The WABCO  Technology centre is at Porur, Chennai, India, with close to 300 people working there. Most of the software for Wabcois written here; even for the most advanced brake system devised recently, about 85% of the software is developed here. The industry is moving more and more towards software driven connected mobility. For fleet management solutions and telematics related issues we also work with some start-ups in India and utilise our global capability through the Transics team. We don’t have a standard solution – solutions come by working with customers. Every fleet needs a different solution, whether it’s a school bus or a logistics company. This involves a lot of joint working so partnering with OEMs is the key to develop new functionalities.

Q: Are you working with start-ups to get fresh ideas?

A: Yes, there is a good eco-system in India for that. We work with some of the start-ups here, both on the software and hardware sides, in Bangalore and Chennai. This is assessed and released with the support of our global team.
Indian fleet and customers need local solutions; though we do take the help of the global team on standards and specifications, and to assess the start-up’s capability, the solutions are driven by the OEMs and WABCO  India

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