industry 2.0 december 2011

www.industry20.com DECEMBER 2011 PRICE 100A 99 MEDIA PUBLICATION VOLUME 11 ISSUE 04

INDUSTRY 2.0 - TEC

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OperatiOnsA successful formula combines planning and persistence

Project management involves smart management of customer rejection

technOlOgyA deft choice between alternatives can revive business growth

strategy

harDharDtiMes

Will robust demand for metals spawn shortages and derail manufacturing?

www.industry20.com 1 industry 2.0 - technology management for decision-makers | december 2011

The year 2011 has been a dramatic one, but the manufacturing indus-try will be glad to see it end. The economic turmoil in Europe — and

the less than stellar economic recovery in America — marooned our export-oriented industries. The steep fall of the Indian rupee exacerbated the pain for industries dependant on imported components and materials. It also made oil more expen-sive, and pushed up both power and transportation costs. On the domestic front, the persistently high inflation in economy has forced the banking regula-tor to raise interest rates to unreasonably high levels. This has significantly impacted capital investments in manufacturing, and expansion plans. With the implementation of the long-promised goods and services tax (GST) nowhere in sight, manufactur-ers continue to grapple with administra-tive issues. Infrastructure improvements have also been scarce — ports still lack capacity, roads are inadequate, and power continues to play truant.

But, the situation is not completely dire. The Indian economy continues to grow steadily. While both urban and rural consumers may be feeling the pinch of higher prices, product volumes and sales are up. Even while factories work flat out to cope with burgeoning demand, manufacturing managers are actively pursuing packaging innovations, material substitutions and product re-engineering to conserve diminishing margins. Even

small companies are adopting modern technologies and new manufacturing methods to remain relevant. Product lifecycles have been cut significantly, and the focus on design, usability and aes-thetics continues to improve as custom-ers become more discerning.

We are also seeing a wider range and variety of products being manufactured locally. Many international material and component suppliers are setting up a manufacturing base in India — to serve both the domestic and international mar-kets. They are attracted by the size of the Indian market, and are impressed by the skill and ingenuity of technical workers. While this trend will increase competition in the local market, over the long run it will benefit the entire manufacturing ecosys-tem through better products and improved worker skills. Product engineering and research centres in India also continue to be a focus for international manufacturers — again a definite plus for the country.

Finally, this year was also remarkable for the fact that business leaders across the spectrum publicly voiced their views about corruption, policy inaction and government indifference to the problems of the industry. While it is unlikely that the new year will herald a radical change in the economic environment or government policy, we remain optimistic that the good times are not far away. Meanwhile, it is important that manufacturers focus on im-provement, innovation and intelligence.

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The Year that Was

VOL. 11 | ISSUE 04 | DECEMBER 2011

www.industry20.com2 december 2011 | industry 2.0 - technology management for decision-makers

contents

departments

Editorial ......................................01

Advertisers’ Index ..................... 02

Industry U pdate ......................... 04

Techwatch.................................. 12

Bookshelf .................................. 58

Product Update ..........................61

advertiser index

CHEP ........................................28-A

EFD .............................................45

Exxon Mobil .........................IFC, 31

FARO ...........................................29

Fuji E lectric ................................. 17

GW Precision ..............................BC

HAAS A utomation ......................... 5

Havell’s In dia ..............................11

KMT .............................................33

Mitsubishi ..................................... 3

National In struments ................... 9

Nokia...........................................13

Omron .........................................64

Premium Transmission ..............15

Riello PCI India ..........................19

Schneider ...............................7, 23

Schunk India ..............................35

Taguetec ....................................IBC

TE C onnectivity ...........................21

Growing demand from developing nations is relentlessly driving demand for a variety of minerals and metals. Senior manufacturing managers feel that material scarcity will increase significantly over the next five years — and fuel price volatility. What are the best ways to tackle this crisis? How can you ensure that strategic decision-making balances sustainable manufacturing?

cover story24

Cover design: Atul Deshmukh

sector update18 Tilling Success Bouyed by a resurgent agricultural sector

and favourable government policies, tractor manufacturers are modernising offerings and increasing production

opinion28 “The future is about providing IT

support to support innovation” Rishikesha Krishnan

facilities & operations30 Alchemy of Success Innovative thinking, smart decisions

and clever execution have enabled Dr Reddy’s become one of India’s top pharmaceutical manufacturers. How will the company build on its achievements?

34 What’s in a Name? Does adding a dash of innovation to a job

title add a new dimension to a worker’s profile? In this age of corporate talent

war, any tool to motivate employees and have them buy into the organisation can be a powerful idea. Learn how

management & strategy38 Driving Corporate Responsibility How can corporate responsibility

initiatives create value, both for the organisation and society? By regularly assessing initiatives to ensure that they achieve unity between company goals and those of stakeholders

40 Rise of the Phoenix? Acme Telepower grew rapidly with a slew

of blockbuster innovations — and hit a wall. Both growth and profits stalled. How does the company founder plan to overcome the challenge?

48 A Wake-up Call for Big Pharma Lower profit margins, smaller pipelines,

increasing regulation and bigger risks will confront pharmaceutical companies.

The winners will be organisations with competitive R&D strategies and astute commercial understanding, rather than the ability to secure regulatory approvals

information technology54 Customer Rejection Management People who design operational processes

must think from a customer perspective — and how the effective use of technology can enhance the experience for everyone

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industry update


Refrigeration technology provider Danfoss has unveiled its ‘India 2015’ growth strategy to increase

its turnover. The company intends to invest DKK 500 mn over the next four years in a new R&D and manufacturing facility in the country, and expand its sales effort. “India is expected to stay on the growth path, and this will provide significant opportunities for Danfoss. Our India 2015 describes how we plan to leverage this,” says Niels B Chris-tiansen, President and Chief Executive Officer of Danfoss.

Danfoss is scouting for a location to house its new India facility that will be-come the company’s new headquarters. “India’s urbanisation will accelerate in tandem with increasing GDP. As people move to the cities demand for ventila-tion, air conditioning and a more efficient

cold chain infrastructure will increase. This will fuel growth for Danfoss in areas such as industrial refrigeration, as well as frequency converters and products related to solar and wind power,” says Noel Ryan, President of Danfoss India.

Danfoss has also inaugurated its new Psychrometric Test Lab for refrigera-tion and air-conditioning at Chennai. According to the company, this is the first of its kind in India with facilities and technological prowess required to test refrigeration and air-conditioning equip-ment. Salient features of the lab include testing equipment with all existing and most new refrigerants, with capacities varying from two to 50 TR. Testing can be done to standard design guidelines. The lab will help customers obtain accu-rate results and certified reports quickly, conveniently and cost-effectively.

The third edition of India’s solar energy focussed event, Solar-con India 2011, was organised

by SEMI India in Hyderabad. Speak-ing about the event, Debasish Paul Choudhury, President of SEMI India says, “This is a platform to give voice to the solar manufacturing industry and ecosystem in India, and to further serve our constituents through a wide range of initiatives, such as workforce development, industry standards, public policy, market research and environ-mental, health and safety (EHS) programmes.”

Solarcon also featured a LED summit, co-organised with Frost & Sullivan, and a short technical course on “Grid Connected Solar PV Systems”, in technical col-laboration with the National Centre for PV Research & Education, IIT Bombay. The chief guest at the event, which featured more than 70 speakers and co-hosted an exposition, was Francisco J Sanchez, Undersecre-tary for Commerce for International Trade, USA. He was accompanied by a 35-member delegation. “India and the US can work as partners in clean energy,” Sanchez said.

Danfoss Expands Research, Manufacturing

Solarcon India Highlights Clean Energy

Mercurio Pallia to Make Trailers

Mercurio Pallia Logisitics, a JV between Gruppo Mercurio SPA of Italy and Pallia Transport, is in-

vesting $2 mn in a manufacturing facility in Rewari, Haryana to make specialised trailers and trucks. The trailers produced at the plant will be used to scale up the company’s own fleet, and for export to the Asia-Pacific Region. Mercurio Pallia is currently the third largest automobile

carrier in the country, and works for manufacturers like Maruti, Mahindra, Tata, Hyundai, and General Motors. Vipul Nanda, Chairman and Managing Director says, “The new facility will enable us pro-duce next generation of trailers that will help save costs and reduce maintenance.”

The company also plans to manu-facture special railway wagons to carry cars. Nanda explains,”Once GST becomes

applicable we plan to use railways for car transportation. We have already signed a MoU with FreightStar to help us with these operations.” Interestingly, Gruppo Mercurio has been acquired by Gefco Logisitcs, a fully owned subsidiary of the PSA Group (Puegot). With Peugeot setting up their small car plant in Gujarat, Mer-curio Pallia expects to manage the entire car transportation management for PSA in India, including pre-delivery inspec-tions and stockyard management.

Dynetek Industries, a manufacturer of proprietary fuel storage systems is collaborating with SV Greentech to form a joint venture company, Dynetek Cylinders India (DNK India). The new company will set up a winding and sys-

tems assembly facility near Mumbai that will replicate the operations of Dynetek’s German subsidiary. Dynetek is a leader in developing, producing and marketing lightweight CNG and compressed hydrogen cylinders and complete systems.

The Indian operation will source cylinder liners from Dynetek, and perform wind-ing, final system manufacture and assembly. “We are excited about the opportunity to capitalize on our first-mover advantage in India. Dynetek remains the only Type III manufacturer with systems certified for sale in India,” says Douglas Pigot, Ex-ecutive Chairman of the Board of Directors of Dynetek.

DNK India to Make CNG Cylinders

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industry update


Dr Sam Pitroda, Advisor to the Prime Minister on Public Informa-tion, Infrastructure and Innova-

tions, has said that the National Innova-tion Council will create a $1 bn fund to build an ecosystem for innovation in the 20 local industrial clusters identified by the council. Speaking at the India R&D 2011 conference and exhibition organised by FICCI and the Department of Science and Technology, Pitroda said that each major industrial cluster would be paired with local advisory cells in universities and will have earmark funds to spur inno-vative minds, and for university professors to undertake research. “The way forward is to align local clusters with universi-ties in their proximity, and to enable universities to set up business incubators

and R&D tool kits,” he explained. “Our research scientists must teach, and our professors must do research.”

Dr R Chidambaram, Principal Scien-tific Advisor to the Government of India, reiterated the need for a policy at the na-tional level that enables the government to support corporate organisations that have human and technological resources to undertake research. He suggested that while selecting students at college-level placement inter-views, large industries think about send-ing the “creamy layer’ to do research with a university of repute. “This is a long-term investment that will pay dividends,” he predicts. Pitroda and Chidambaram also released the FICCI-ISB-Battelle report on industry-academia linkages

NTPC Vidyut Vyapar Nigam, the trading arm of NTPC, has started combin-ing energy produced from solar photovoltaic power producers with that from conventional thermal sources. The supply of bundled power has

commenced to distribution companies in Rajasthan, Maharashtra, and Punjab. About 41 MW of solar photovoltaic capacity under Jawaharlal Nehru National

Solar Mission migration scheme has been included in the package to enable buying utilities meet their renewable purchase obligations. Under the migra-tion scheme, NTPC Vidyut Vyapar has inked power purchase agreements with 16 solar project developers (both thermal and photovoltaic) for 84 MW. Of this, solar power produced from photovoltaic projects is expected to be 54 MW, while thermal is 30 MW.

JK Cement is setting up its maiden overseas plant at Fujairah in the UAE. This venture is in technical

collaboration with Taheiyo Engineer-ing of Japan. The grey-cum-white cement plant is located adjacent to Al Salwa crusher at village Habhab Fujairah, UAE, and has a capacity of 1,700 tpd. The plant is expected to be commissioned by the end 2013.

Speaking on the occasion, Yadupati Singhania, Managing Director of JK Cement said, “The proposed plant at Fujairah will have a capacity of 0.6 million tonnes per annum of white cement, with the flexibility to switch over to the production of up to 1 mil-lion tonnes per annum of grey cement, depending on market demand.”

More Focus on Industry-Academia Links

NTPC Bundles Solar, Thermal Power

JK Cement Forays into UAE

Rockwell Automation has extended its portfolio of integrated architec-ture to smaller applications with the

introduction of Allen-Bradley CompactLogix programmable automation controllers (PACs), servo drives, I/O, visualisation and simplification tools. “A scalable, right-sized control system helps machine builders and customers cost-effectively match their ap-plication needs,” explains Mike Burrows, Director for Integrated Architecture at Rockwell.

The CompactLogix family is suitable for applications with fewer than 200 I/O and up to 16 axes of motion. Featuring integrated motion on Ethernet/IP, the CompactLogix controller family can provide the same per-formance, flexibility, reduced development

time and ease-of-use as large-scale systems from Rockwell. “In the past, machine build-ers who needed high-performance features, such as integrated motion, were faced with choosing a system that was oversized for their actual application needs,” said John

Blanchard, Research Director at ARC Advisory Group. “By bringing the benefits of integrated architecture to smaller ap-plications, users can now run motion and safety applications on a single control plat-form, using a single network — simplifying the design, operation and maintenance.”

Integrated Architecture Suits Small Applications

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White Paper 1

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industry update


GE India has announced the appointment of Banmali Agrawala as the leader of GE’s

Energy business in India. Agarwala has more than 24 years of experi-ence, and has held senior positions at various companies. He was previously with Tata Power Company as executive director for strategy and business development. Earlier he was with Wartsila India, holding several leadership positions in both India and Europe, and ulti-mately serving as managing director of the company for five years. Kishore Jayaraman who is cur-rently leading the GE Energy busi-ness in India, will be transitioning to a new role during 2012. Jayara-man oversaw rapid growth of the energy business during his tenure in the country.

Speaking on the appointment, John L Flannery, President and Chief Executive Officer, GE India said, “Energy is our largest business in India but still has huge room to grow in new areas like renewable and distributed energy — as well as traditional gas and steam turbines, and services.”

Reliance Infrastructure has com-missioned a 400 kV double cir-cuit transmission line between

Ranchodpura (Vadavi) and Zerda (Kansari) in Gujarat. The 140 km-long line is part of the Western Regional System Strengthening (WRSS) project that will connect key business centres in Gujarat like Disa, Patan and Kadi. Reliance is installing three lines in Gujarat, and two have already been commissioned. The third transmission line between Raigarh and Karamsad is expected to be commissioned soon.

Commenting on the development, Lalit Jalan, Chief Executive Officer of Reliance Infrastructure says, “We

Future Supply Chains, the supply chain and logistics company from the Future Group, has acquired the warehousing business of Transmart India, and has taken over the management of a 20,000 sq ft state-of-art distribution centre

facility located in Bhiwandi, near Mumbai. The company is also negotiating with Transmart to take over their Delhi and Bangalore warehousing operations.

Speaking on the occasion, Anshuman Singh, Managing Director of Future Supply Chains Solutions said, “We are very excited about this acquisition, which expands the scale and range of Future Supply Chains offering to clients. It also gives us a jumpstart with Transmart’s customers.”

While Future Supply Chains’ FSC Express business already has 350 customers, the acquisition of Transmart’s 3PL Business will give it 14 additional big accounts.

PTC has enhanced the capabilities of its Windchill family of product lifecycle management (PLM) solu-

tions to enable users get more value. The Windchill Service Information Manager and Windchill Service Parts are new of-ferings that re-purpose product structures to enable product-centric information and change management of configuration-spe-cific service and part information. The use of these solutions ensures that product-

centric content maintains its association with engineering CAD data throughout the product lifecycle; resulting in more accurate service and parts information. In turn, this enables better product and customer support.

Windchill 10 can now manage data from Creo Parametric, Creo Direct and Creo Illustrate as well as FORAN, a leading shipbuilding design application. New capabilities within the Windchill

Product Analytics help manufacturers ensure that they meet the latest product performance requirements with ex-panded specifications to assess product compliance with new REACH substances and the EU Battery directive. Windchill Quality Solutions improves product and process quality across the lifecycle with new closed-loop capabilities.

Windchill Nonconformance (a new module) offers highly structured, au-tomated, and repeatable processes to validate how non-conforming products were internally addressed.

Agrawala to Head GE Energy Business

HT Power Line Enhances Energy Flow

Future Supply Chains Acquires Large Warehouse

PTC Improves PLM Functionality

are proud to announce the commis-sioning of fifth transmission line. Out of nine, five transmission lines have been successfully commissioned. We are committed to complete the project by FY12 and facilitate the power flow from eastern region to the western region of the country.” The Rs 1,400 crore WRSS project is a 1,500 km transmission system to facilitate free flow of 4,000 MW of power. It is India’s first privately owned transmis-sion project on Build, Own, Operate and Maintain (BOOM) basis, and was awarded to Reliance Infrastructure through tariff-based international competitive bidding process.

industry update


The Weir Group, a mining and engineering service provider, has set up a new rubber facility

in Bangalore to meet the needs of the domestic mining industry. The facility is also equipped with precision equip-ment to facilitate improvements in the properties of rubber materials.

The unit will produce mill liners, erosion resistant rubber lining, rub-ber hoses, rubber liners for cyclones, screen media, polyurethane products,

slurry pump and valve rubber parts. It will support Weir Minerals, and the Weir BDK valves and pumps unit in India. Weir Chief Executive, Keith Cochrane, says the facility is in line with Weir’s strategy to serve customers with locally manufactured products. The current capacity of the plant is 200 MT per an-num, and it has a workforce of about 25 people. The company expects to ramp this up to 400 MT per annum over the next three years.

TRL Krosaki Refractories (formerly Tata Refractories) has set up a 50 kl/day effluent treatment plant (ETP) inside its Belpahar works in Orissa at an investment of Rs 8 crore. While inaugurating the facility, Arup

Kumar Chattopadhyay, Managing Director of the company, stated that TRL Krosaki is committed to environment excellence. The new ETP will treat efflu-ents, and the resulting water will be reused in the plant for other purposes.

Bangalore is now home to SKF’s Global Technical Centre in India (GTCI). The facility will focus on product innovations for all five SKF platforms — bear-ings, seals, mechatronics, lubrication systems and services. The Global

Technical Centre will amalgamate the existing Global Testing Centre (opened in 2009) and the Automotive Development Centre (opened in 2004), both of which are located in Bengaluru.

SKF has invested close to Rs 500 mn in the GTCI, and will employ around 400 en-gineers. They will work in the areas of product engineering, development and testing, as well as staff a global laboratory for metallurgy, chemistry and bearing perfor-mance analysis. The centre will serve customers in India and South East Asia, as well as work on global projects for SKF. “With the launch of GTCI, our customers in India will benefit from ‘closer to home’ availability of SKF’s global knowledge and expertise to address the growing need in India for newer technology development at a faster pace,” says Shishir Joshipura, Country Head for SKF in India.

Dassault Systèmes has an-nounced a 3D sketching solution, Natural Sketch, which

combines the intuitiveness of 2D paint-ing gestures with accurate, realistic 3D modelling. The lifelike creative experi-ence helps designers share ideas more rapidly and precisely. “Dassault is con-tinuously striving to make the power of

its widely recognised 3D creation solu-tions accessible to a larger audience,” says Anne Asensio, Vice President of Design Experience.

Sketching in 3D enables designers to better understand their design, avoid misinterpretations of 2D views, and bet-ter communicate ideas to 3D modellers. It also gives designers and design studio

teams the ability to use 3D sketched curves to create a model with sur-face modelling, or subdivision surface modelling tools within Catia. By directly transforming a 2D sketch into a 3D digi-tal product, inconsistencies between the design intent and reality can be avoided, resulting in dramatic improvements in design quality.

Weir Inaugurates New Rubber Facility

TRL Puts in Effluent Treatment

SKF Sets Up Global Technical Centre

Catia Streamlines Design Workflow

Kirloskar Brothers (KBL) has been recognised with the 2011 SAP ACE award for the

best-run manufacturing organisation. Commenting on the win, Chaitanya Wagle, Associate Vice President of the Corporate Information Centre at KBL says,” It is a matter of immense pride to bag this award. Our alli-ance with SAP helps various criti-cal business processes across the organisation to achieve operational excellence — that leads to greater customer satisfaction and loyalty.”

Peter Gartenberg, Managing Director for SAP Indian Subconti-nent and Pradip Rathi, award jury member and Managing Director of Sudarshan Chemicals jointly pre-sented the trophy and certificate to the KBL team at an award ceremony held in Mumbai.

Kirloskar Bags SAP Award

techwatch


neering and Packaging IVV in Freising. “The current production technique is time-consuming and expensive: three of the five layers of plastic have to be coated with aluminum and stuck to-gether. This requires seven production steps, which drives the price up.”

The new film is easier to produce because it is made up of just two plastic films with three barrier layers: one aluminum-coated plastic film is coated with a micrometre-thin layer of ORMOCER, and then coated again with aluminum. ORMOCER contains an organic-inorganic hybrid silicon-ox-ygen polymer matrix, which makes the material exceptionally tight and sta-

ble. “That’s what makes it perfect for insulation panels,” says Noller. “Gases and liquids can-not easily penetrate the ORMOCER layer.” The new insulation films can be fashioned in just five stages.

Researchers have also optimised the production of the VIP insulation elements.

In Dresden, they have developed an automated process for gently sealing the pyrogenic silica cores with the high-barrier film. Both the films and the production process have been pat-ented. The researchers plan to simplify the production process even more, and carry out long-term tests. Until now the panels had to last just 12 years — the average lifespan of a refrigerator. The building sector has higher expecta-tions: a facade should last 50 years. Noller and his colleagues are now test-ing the stability of films and insulation elements in climate chambers, which simulate the seasonal changes in heat and frost, and in humidity.

Insulation panels that are both thin and effective are expensive to man-ufacture. So, currently they are used only in high-end products like

energy-saving refrigerators. However, innovative components and production techniques are now poised to dra-matically cut costs, so that offices and homes can use thin insulation panels to cut heating and cooling costs.

Typical insulation facades are thick — they add up to 20 cm to a build-ing’s skin, and can result in significant follow-up costs. Researchers at the Fraunhofer labs in Germany are now developing films that can insulate with-out enforcing structural alterations. Called vacuum isolation panels (VIPs), these insulation materials are only two cm thick — and perform just as well as a classic 15-cm-thick insulation layer made from polyurethane foam. The inner workings of the VIPs comprise largely of pyrogenic silica. A high-tech film holds the material together, and makes it airtight.

“The key elements are the films: they dictate the quality, life span and price,” says Dr Klaus Noller of the Fraunhofer Institute for Process Engi-

For the past 100 years, the Haber-Bosch process has been used to convert atmospheric nitrogen into ammonia, which is

essential in the manufacture of fertilis-er. Despite the reliability of the process, scientists did not completely understand how it actually worked. Now, a team of chemists, led by Patrick Holland of the University of Rochester, has new insight into how the ammonia is formed.

While nitrogen is abundant in the air around us, the molecules form strong triple bonds that are difficult to break. This makes it highly unreactive. The Haber-Bosch process uses an iron cat-alyst at extremely high pressures and

Slim Thermal Insulation for Buildings

New Insight into Haber-Bosch Process

Vacuum insulation panels are 10 times better than conventional insulation materials of similar thickness

high temperatures to break the bonds and produce ammonia — one drop at a time. “The process is efficient, but it is hard to understand because the reac-tion occurs only on a solid catalyst,” says Holland.

Holland and his team have suc-ceeded in mimicking the process in solution. They discovered that an iron complex combined with potassium was capable of breaking the strong bonds between the nitrogen (N) atoms and forming a complex with an Fe3N2 core, which indicates that three iron (Fe) atoms work together in order to break the N-N bonds. The new complex then reacts with hydrogen (H2) and acid

to form ammonia (NH3) — something that had never been done by iron in solution before.

Despite the breakthrough, the Haber-Bosch process is not likely to be replaced anytime soon. While there are risks in producing ammonia at extremely high temperatures and pressures, Holland points out that the catalyst used in Haber-Bosch is considerably less expensive. But, Hol-land says it is possible that his team’s research could eventually help in coming up with a better catalyst for the Haber-Bosch process — one that would allow ammonia to be produced at lower temperatures and pressures.

techwatch


Researchers from North Carolina State University have developed a simple

way to convert two-dimen-sional patterns into three-di-mensional (3D) objects using only light. The process is remarkably simple. Research-ers take a pre-stressed plastic sheet and run it through a conventional inkjet printer to print bold black lines on the material. The material is then cut into a desired pattern and placed under an infrared light, such as a heat lamp.

The bold black lines absorb more energy than the rest of the material, causing the plastic to contract — creat-ing a hinge that folds the sheets into 3D shapes. This technique can be used to create a variety of objects, such as cubes or pyramids, without ever having to physically touch the material. The technique is compatible with commer-cial printing techniques, such as screen printing, roll-to-roll printing, and inkjet

printing, that are inexpen-sive and high-throughput but inherently 2D. “This is a novel application of existing materials, and has poten-tial for rapid, high-volume manufacturing processes or packaging applications,” says Dr Michael Dickey, an as-sistant professor of chemical and biomolecular engineering at NC State University.

By varying the width of the black lines, or hinges, researchers are able to change how far each hinge folds. For example, they can create a hinge that folds 90 degrees for a cube, or a hinge that folds 120 degrees for a pyramid. The wider the hinge, the further it folds. Wider hinges also fold faster, because there is more surface area to absorb energy. “You can also pattern the lines on either side of the material,” Dickey says, “which causes the hinges to fold in different direc-tions. This allows you to create more complex structures.”

Converting 2D Patterns into 3D Objects

Cleaning Cotton Fabric with SunlightI

magine jeans, sweats or socks that clean and deodorise themselves when hung on a clothesline in the sun, or draped on a balcony rail-

ing. Scientists are reporting develop-ment of a new cotton fabric that cleans itself of stains and bacteria when exposed to ordinary sunlight.

Mingce Long and Deyong Wu say their fabric uses a coating made from a compound of titanium dioxide, the white material used in everything from white paint to foods to sunscreen lotions. Titanium dioxide breaks down dirt and kills microbes when exposed to some types of light. It has found uses in self-cleaning windows, kitchen and bathroom tiles, odour-free socks and other products. Self-cleaning cotton fabrics have been made in the past, but they self-clean thoroughly only when exposed to ultraviolet rays. So, they set out to develop a new cotton fabric that cleans itself when exposed to ordinary sunlight.

Replacing metals by lighter but just as efficient materials is a necessity for numerous in-dustries, such as aeronautics,

car manufacturing, building, electronics and sports industry. Due to their excep-tional mechanical strength, thermal and chemical resistance, composite materials based on thermosetting resins are cur-rently the most suitable. However, such resins must be cured in situ, using from the outset the definitive shape of the part to be produced. In fact, once these resins have hardened, welding and repair be-come impossible. In addition, even when hot, it is impossible to reshape parts.

A team led by Ludwik Leibler, CNRS researcher at the Laboratoire “Matière Molle et Chimie” (CNRS/ESPCI ParisTech) has developed a new class of compounds. Repairable and recyclable, this novel material can be shaped at will and in a reversible manner at high tem-perature. The material retains properties specific to organic resins and rubbers: it is light, insoluble and difficult to break.

Glass (inorganic silica) is a unique material: once heated, it changes from a solid to a liquid state in a very pro-gressive manner (glass transition). This means that it can be shaped as required without using moulds. Using ingredients

that are currently used in industry (epoxy resins, hardeners, catalysts, etc.), the researchers have developed a novel or-ganic material made of a molecular net-work with original properties: under the action of heat, this network is capable of reorganising itself without altering the number of cross-links between its atoms. This novel material goes from the liquid to the solid state or vice versa, just like glass. At room temperature, it resembles either hard or soft elastic solids, depend-ing on the chosen composition. Most importantly, it is reshapeable at will, and can be repaired and recycled under the action of heat.

New Material Can Be Worked Like Glass

techwatch


which makes the ribbon bundles’ thermal conductivity the same as that of each rib-bon. What we discovered is that phonons can cross these interfaces without being scattered, which significantly enhances the thermal conductivity,” said Li. The researchers also found that they could control the thermal conductivity between a high and a low value by treating the interface of the nanoribbon pairs with different solutions.

One of the remarkable aspects of the effect Li discovered is that it is revers-ible. For example, when the researchers

The surprising discovery of a new way to tune and enhance thermal conductivity — a basic property generally considered to be fixed

for a given material — gives engineers a new tool for managing thermal effects in smartphones, computers, lasers and other powered devices. The finding was made by a group of engineers headed by Deyu Li, Associate Professor of Mechani-cal Engineering at Vanderbilt University.

Li discovered that the thermal conduc-tivity of a pair of thin strips of material called boron nanoribbons can be en-hanced by up to 45 per cent depending on the process that they used to stick the two ribbons together. Although the research was conducted with boron nanoribbons, the results are generally applicable to other thin film materials as well.

According to Li, the force that holds the two nanoribbons together is a weak electrostatic attraction called the van der Waals force. “Traditionally, it is widely believed that the phonons that carry heat are scattered at van der Waals interfaces,

Enhancing Thermal Conductivity for Better Cooling

NASA engineers at the God-dard Space Flight Centre have produced a material that absorbs more than 99 per

cent of the ultraviolet, visible, infrared, and far-infrared light that hits it. The nanotech-based coating is a thin layer of multi-walled carbon nanotubes, tiny hollow tubes made of pure carbon about 10,000 times thinner than a strand of human hair. They are positioned verti-cally on various substrate materials like silicon, silicon nitride, titanium, and stain-less steel — materials commonly used in space-based scientific instruments.

The tiny gaps between the tubes collect and trap background light to prevent it from reflecting off surfaces and interfering with the light that scientists

actually want to measure. Because only a small fraction of light reflects off the coating, the human eye and sensitive detectors see the material as black.

In particular, the team found that the material absorbs 99.5 per cent of the light in the ultraviolet and visible, dipping to 98 per cent in the longer or far-infra-red bands. “The advantage over other materials is that our material is from 10 to 100 times more absorbent, depending on the specific wavelength band,” says John Hagopian, who is leading the effort involving 10 technologists.

The tests indicate that the nanotube material is especially useful for a variety of applications where observing in mul-tiple wavelength bands is important. One such application is stray-light suppres-

sion. Currently, instrument manufactur-ers apply black paint to baffles and other components to help prevent stray light from ricocheting off surfaces. However, black paints absorb only 90 per cent of the light that strikes it. Black materials also serve another important function on spacecraft instruments, particularly infrared-sensing instruments, adds God-dard engineer Jim Tuttle. The blacker the material, the more heat it radiates away. In other words, super-black materials, like the carbon nanotube coating, can be used on devices that remove heat from instruments and radiate it away to deep space. This cools the instruments to lower temperatures, where they are more sensitive to faint signals. “This is a very promising material,” says Tuttle.

NASA Develops Super-Black Material

wetted the interface of a pair of nanorib-bons with isopropyl alcohol, pressed them together and let them dry, the thermal conductivity was the same as that of a single nanoribbon. However, when they wetted them with pure alcohol and let them dry, the thermal conductivity was enhanced. Then, when they wetted them with isopropyl alcohol again, the thermal conductivity dropped back to original.

One of the first areas where this new knowledge is likely to be applied is in thermal management of microelectronic devices like computer chips. These chips generate so much heat that one of the major factors in their design is to pre-vent overheating.

Another area where the finding will be important is in the design of ‘nanocom-posites’ — materials made by embedding nanostructure additives such as carbon nanotubes to a host material such as vari-ous polymers that are being developed for use in flexible electronic devices, struc-tural materials for aerospace vehicles and a variety of other applications.

A pair of boron nanoribbons stuck together on a microdevice used to measure thermal conductivity

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sector update

India tops the global rankings for tractor sales. In the late 1990s, when production crossed the quarter million mark, India overtook the United States as the world’s largest producer

of tractors. Since then, the industry has grown by leaps and bounds as homegrown companies have modernised their array of offerings to compete with the high-end models rolled out of the stable of mul-tinational corporations playing in the sector. “This year, the market for tractors will grow beyond half a million,” says Ashok Ananthraman, Director, Sales and Marketing, New Holland Fiat India Pvt Ltd.

Tractors are multipurpose devices used on farms as well as in myriad commercial applications. Ac-cording to Rohtash Mal, Executive Director and CEO, Escorts Ltd (Agri Machinery Group), and President, Tractor Manufacturers Association, “Farm uses ac-count for about three-fourths of the tractor market while construction and other small segments, like airport applications, making up the rest. Overall, the

market has grown by 20 per cent in each of the last three years.”

Primary Market Drivers At about 10 tractors per 1,000 ha of cropped area, tractor penetration rates in India are well below the world average of 19. Also, Food and Agriculture Organisation (FAO) estimates suggest that less than half of the total agricultural area in India is under mechanised farming. Thus, huge opportunities exist for agricultural mechanisation.

Governmental measures are enhancing these prospects. Regaining agricultural dynamism has been made a goal of the Eleventh Five Year plan, with the aim of making the country self-sufficient in food production by 2015. “This goal will necessitate nothing short of a second green revolution fuelled by mechanisation, since tractors are the key to enhanc-ing farm productivity and yield,” says Ananthraman. Subsidies on agricultural loans also aim at boosting the usage of technology in agriculture.

Farm labour is now scarce and has spurred great-er farm mechanisation, helping the industry grow healthily. Mal observes, “Social employment assur-ance schemes like the government’s National Rural Employment Guarantee Act (NREGA) give villagers better wages for their labour that what they used to earn on the farm. This has made farmers turn more and more to machines, in much the same way as in the West. In this context, tractors are the starting point for agri-mechanisation given their versatility and ability to serve as energy sources to run other farm devices. Besides, farmers’ income levels have risen considerably in recent years. Whereas 95 per cent of tractor sales used to be financed a few years ago, today, only 60 per cent sales are routed through financial institutions.”

According to Turab Ali Khan, Programme Manager, South Asia, Middle East & North Africa, Automotive & Transportation, Frost & Sullivan, “Government policies such as the minimum support price are resulting in higher disposable incomes in rural areas. On the other hand, banks are also more forthcoming in providing agricultural loans for tractors for the banks do have an asset that may be

Tilling SuccessHelped by a steady agricultural sector and favourable government policies, tractor sales are poised to touch new global highs

by charu bahri

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While tractors have commer-

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industries, their primary demand

comes from the agricultural

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sector update

claimed in case of default. This is also helping the market for tractors grow, especially in South India.” It may be added that the entry of private commer-cial banks in this predominantly agriculture-driven sector has eased money supply and is helping push tractor sales as well.

“Over and above these factors, the industry is growing beyond our forecasts because of a very good monsoon, good sowing and rural prosperity,” adds Dr Pawan Goenka, President, Auto & Farm Sector, Mahindra & Mahindra, a leading brand in the tractor segment.

Secondary Market DriversIn India, the primary demand for tractors comes from the agricultural sector. Interestingly, a lot of primary sales support secondary uses as well, particularly for haulage purposes, as almost every tractor sold to the farm sector doubles up as a means of transportation. According to Ananth-raman, “Farmers hire out their assets to other farmers.” Taking cognisance of such usage, Khan says, “Tractor owners in the farm sector are put-ting their assets to heavier use, hiring them out to contractors outside the peak agricultural season. A resulting trend is the more frequent replacement of tractors — once every four to five years instead of once every seven to eight years.” Such tractor exchanges are significantly higher in the northern and western states.

As far as pure secondary usage is concerned, the construction sector accounts for the major part of demand. “Some tractors sold to the non-farm sector are directly applied to serve light construc-

tion related purposes,” continues Ananthraman, “As infrastructure and real estate development are in a major expansion surge nationwide, there are more takers for tractors in spite of their at-tachments being designed for purely agricultural purposes. Tractors are increasingly being used as a base to mount back hoes, loaders, graders and well-boring machinery, among others.”

“Booming construction activities across the country are pushing sales of tractors,” adds Mal. “A greater number of operational airports using trac-tors for hauling baggage and a buoyant construc-tion sector across the country are boosting tractor sales,” observes Khan.

Expanding MarketMore than a dozen companies manufacture tractors in India today. Tractors are categorised as automo-tives and plants manufacturing these machines are highly capital intensive enterprises. Government policy for the automotive sector allows 100 per cent foreign direct investment (FDI). This encour-aging provision has paved the way for a handful of multinational corporations to set up tractor-making units in the country as well. Like some competitor homegrown companies, a few foreign players are seeing India as a cost-effective base for manufac-turing the machines. Tractors made here can be priced competitively, thanks to lower production costs compared with western nations. This cost advantage is helping tractor exports grow, and is especially boosting the fortunes of companies that want to make inroads to tractor markets in South Asian and African countries, where direct sales to

CAGR of volume growth in the past four decades:Ten per cent despite seasonal fluctuationsTractor size-wise market shares:► Low- 21 to 30 hp tractors have a share of about one-sixth

of the market.► Medium- 31 to 40 hp tractors account for about half of

the market. ► Large- 41 to 50 hp tractors account for about one-fourth

of the total market.► The largest (greater than 51 hp) tractors have the remain-

ing share, which is about eight per cent.

Regional market divisionTwelve states are said to account for more than nine out of 10 tractors sold. These include Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Madhya Pradesh, Orissa, Punjab, Rajathasn, Tamil Nadu and Uttar Pradesh. The state of Uttar Pradesh leads in tractor sales.

FactS & FiguRES

20%rate of growth of

tractor sales in India in each of the

last three years


sector updateprivate buyers as well as bidding for government tenders is rising.

For example, the Ford brand of tractors has had a long innings in India since it was introduced in the 1970s in partnership with Escorts. In the late 90s, New Holland entered India as a solo player, manufacturing a range of tractors well-suited to local demand. Sharing details of the customisation that has been done for the Indian market, Anan-thraman explains, “Europe and USA demand high horsepower, large tractors in the range of 75 to 500 hp. Indian consumers, however, demand machines of 30 to 75 hp. South Asian customers also use similar machines. Alongside manufacturing for the local market, we have made India a production base for global exports. One-fourth of our local production is exported to 51 countries. These exports include tractors and aggregates made specifically for the US and European markets.”

Out-riding competitorsThere has been a growing acceptance of Indian-made tractors in international markets, whereas the

overseas companies operating in the country will have to contend with well established local brands and extensive dealer networks of domestic compa-nies. Brand loyalty is greater in rural areas and new firms will have to work harder to gain a foothold in the market. But the potential gains from penetrating the untamed rural and urban markets are so huge that companies are determined to find ways to break through the entry barriers.

The rising demand trajectory suggests that this is an opportune time to enter the Indian market. Not that the existing players do not have adequate capacity to meet the local demand, but foreign brands can compete on styling, ergonomic features, sophistication and versatility. Technological innova-tions can help these brands differentiate themselves from domestic competitors and gain a bigger share of domestic sales. Overseas tractor models fitted out with a wide range of attachments and supplements,

could also enhance the acceptance of mechanisation as well as the post-harvest use of tractors on farms.

Nowadays, rising fuel prices have made better fuel consumption and alternate energy sources ‘in demand’ features. Electronic features like GPS and Auto Cruise systems as well as comfort enhance-ments are product distinguishers too. Still, more fea-tures cannot come at a significantly higher price in this extremely price sensitive market. Since overseas brands are priced higher than local brands, some downward price revision is necessitated for them to meet the expectations of Indian buyers. “The com-mercial vehicle sector is price sensitive and tractors are all the more so,” says Khan. He also says that foreign companies will need a strong distribution network to avoid facing issues hampering sales, such as the availability of spares.

And how best could overseas companies tread in the domestic market? “They could consider the option of tying up with smaller tractor manufacturers who lack advanced technology. Alternatively, they could also consider partnering companies offering combine harvesters and helping such local players introduce a

new product line. Some indigenisation of their offerings would help reduce product prices. An ability to understand the Indian consumer mindset would take new entrants a long way,” adds Khan.

technology innovationsSeasoned Indian brands are able to understand consumer demand and accordingly adjust their production and expand their market share. For instance, Mahindra is committed to developing rugged tractors boasting of

best-in-class fuel efficiency. According to Dr Goenka, “Customer feedback is continuously tapped. These suggestions help add functionality to our range of products.” Consumer feedback and market research have also resulted in a new class of products. “In the immediate past, the Yuvraj tractor has created a new segment — the under-20 hp tractors, which has given an extra boost to Mahindra tractor volumes,” adds Dr Goenka.

It does not need an economist’s eye to see that India is a huge market for tractors — nearly three-fourths of Indians still live in villages and till the fields. But now more than ever, tractors are fan-ning out into the urban markets.

The huge national drive to expand infrastruc-ture and the high visibility real estate boom, have contributed to this. As a result, the Indian tractor business has just shifted into high gear and the road ahead is a smooth one.

“... the industry is growing beyond our forecasts because of a very good monsoon, good sowing and rural prosperity”—Dr Pawan Goenka President, Auto & FArm sectormAhindrA & mAhindrA

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Industry_2.0_1201_12016p.indd 1 2011-11-28 17:11:49

Senior managers in leading global manufacturing companies believe that the scarcity of minerals and metals will increase significantly over the next five years. They also think that managing this situation correctly will separate the winners and losers. So, how can manufacturers strike the balance between collaboration and maintaining competitive advantage to tackle this crisis? What will they do to ensure that strategic decision-making meets sustainability?

TheMetalMetalCrunch


cover story

Scarcity has three dimensions: physical (just not there), economic (volatile or increasing prices), and geopolitical (political barriers). For renewable resources, the economic

dimension is typically the main driver. But, what about non-renew-ables such as minerals and metals?

Captured in our earth’s crust and concentrated in only a few regions, minerals and metals are relatively difficult and expensive to extract. The process is capital-intensive, not only financially but

also in terms of energy consumption, land use and water extrac-tion. Consequently, the related environmental and social impacts are a growing concern.

The supply of many minerals and metals is struggling to keep up with rapid increases in consumption, resulting in price hikes and delivery delays. For example, dysprosium, an essential com-ponent of super magnets, and tantalum, an important component in aircraft and medical equipment, automotive electronics, mobile phones and LCD screens, have both experienced explosive price increases in recent years.

Producing countries are starting to protect their interests with export taxes and trade restrictions, particularly for metals and minerals with high innovative value. A study by the British Geologi-cal Survey indicates that China is the leading producer of 27 criti-cal metals. While there are other countries where some of these metals are produced, there are a few rare-earth elements that are almost exclusively produced in China. Recently, China has imposed trade barriers on certain metals to protect its domestic industries. These developments are adding to the concerns of in-ternational manufacturers regarding costs and security of supply.

With a growing population, increasing GDP levels and improving lifestyles, we are consuming increasing quan-tities of renewable and non-renewable resources like energy, water, land, miner-

als. Since the relationships between these resources are strong, both the causes of, and the solutions to scarcity are complex. For a manufacturing organisa-tion with a global supply chain, the situation can spell trouble. PwC surveyed some of the largest manufac-turing businesses across manufacturing, chemicals, automotive, energy/renewable energy, aviation, metals, infrastructure and high-tech hardware to see what impact such a scarcity would have, and where, over the next five years.

The study titled, “Minerals and Metals Scarcity in Manufacturing: A Ticking time Bomb,” finds that seven core manufacturing industries could be seri-ously affected by a shortage of minerals and metals. While manufacturing companies consider minerals and metals scarcity as an important issue for their business, they are concerned that only 39 per cent of their customers do. Business leaders in automotive, chemicals, and energy sectors fear that they will be severely impacted by the imminent scarcity. Among the minerals and metals on the ‘critical’ list are:• Beryllium: Used as a lightweight component in

military equipment, aerospace and machinery.• Cobalt: A material widely used in industrial

manufacturing.• Tantalum: Used in components for mobile phones,

computers and automotive electronics• Flurospar: Employed in construction, cement, glass,

iron and steel castings.• Tellurium: A brittle, silvery-white metallic element

used in solar panels. • Germanium: Hard, grayish-white element with

metallic lustre; used in solar panels.• Platinum: Silvery-white, lustrous, ductile and mal-

leable; used in pollution control devices for cars, and in fuel cells.

• Neodymium: Bright, silvery rare-earth metal ele-ment; used in wind turbines and hybrid cars.

• Lithium: A soft, silver-white metallic element; used in wind turbines and lithium-ion batteries.

• Rhenium: A silvery-white metal with very hight melting point; used to make advanced turbines and jet engine parts.

• Terbium: A soft, silvery-white rare earth metal; used in CFL lamps to provide an acceptable colour balance.The other important findings in the report are:1. Major manufacturing companies consider min-

erals and metals scarcity as an important issue for

their business, but do not see sufficient awareness of the situation among all their stakeholders.

2. Scarcity brings risks and opportunities. Rising consumer demand and geopolitics are perceived as the main drivers for the unstable supply of minerals and metals. The risk of scarcity is expected to rise significantly in the next few years, leading to sup-ply instability and potential disruptions. The survey

What Causes sCarCity?

Dimensions of Resource Scarcity

Export controls/barriersPrice volatilityNot accessibleConflict regionsMarket developmentsDepletion of reserves

GeopoliticalEconomicPhysical


showed that renewable energy (78%), automotive (64%) and energy & utilities (57%) are currently experiencing instability of supply.

European companies seem to feel better pre-pared, with policies and programmes to mitigate risk. Examples of particular opportunities suggested by the respondents to the study include the backward integration of operations, exploring new technology and substitutes, and prospecting for new mineral re-serves, having a coordinated purchasing policy, better recycling and forward contracts with key suppliers.

3. The impact of scarcity is expected to increase substantially, and affect the entire supply chain. In manufacturing industries, certain minerals and met-als are strategically important resources mainly due to their character or function in the product — or the limited availability or non-availability of substitutes.

Any scarcity of these minerals can cause stress all along the supply chain. For example, 89 per cent of renewable energy respondents expect that their suppliers will be impacted. Even though the current direct financial costs are relatively low, the risk of instability of supply is high because of the crucial na-ture of minerals and metals in production (from ‘just in time’ to ‘just not there’).

Although some Asia Pacific countries, especially China, have abundant reserves of scarce minerals and metals, the expected impact of scarcity on companies in these countries over the next five years is still substantial (53%). The percentage of companies that expect to be affected by this scarcity will triple in the chemicals industry, whilst it will double in the renew-able energy and high-tech sectors.

4. Several countries such as China, India and Bra-zil are experiencing a phase of explosive economic growth, leading to an increase in consumerism and a higher demand for a variety of goods and services. This is perceived as the main driver of scarcity in minerals and metals, followed by geopolitics and extraction-related issues. While the risk of exhaustion of reserves is rated low (30%), poor substitution is named as a very important driver for the renewable energy, energy & utilities, and chemical industries.

Given the range of factors that contribute to re-source scarcity, it is clear that all stakeholders in the supply chain need to be involved in addressing this issue. Mining companies have a key role in identifying and developing new reserves and managing existing reserves; governments should remove trade barriers; universities and research institutions should acceler-ate R&D; companies should invest more in innova-tions for substitution and resource efficiency, and consumers need to take responsibility by recycling waste materials.

5. Preparedness differs considerably across sec-tors. In the present situation, the infrastructure, re-newable energy and automotive industries are almost

1. resource scan• Product portfolio• Global picture• Pre-Assessment• Unstable products

2. resource analysis• Value chain• Global details• Product resilience• Product impact

3. resource strategy• Transition drivers• Company Policy• Targets• Business Model

4. resource implementation• Plan• Action• Monitoring• Evaluate

Resource scarcity is becoming a central issue on the policy agenda for many governing bodies:

• The European Union is pushing for resource efficiency and trade policies that favour inter-national open markets.

• In the USA, the Dodd–Frank Act is forcing companies to become transparent with how they use so-called ‘conflict minerals’.

• Producing countries are starting to protect their interests with export taxes and trade restrictions.

• Scarcity of resources is also likely to be a central issue at the Rio+20 UN Conference on Sustainable Development in June 2012.

resourCes take Centre stage


cover story

1Have you developed a set of risk indicators that is forward-looking, and is based on

continuous monitoring and analysis of critical resources?

2Are you recognising different types of risks that could affect your supply chain and prod-

uct portfolio, including factors such as physical risks (just not there), economic risks (volatile pric-ing) and geopolitical risks (political barriers)?

3Are risks matched with appropriate reme-dial measures such as inventory cushions,

strategic stockpiling, dual sourcing, dialogue with suppliers, and R&D on substitution?

4Do you have effective systems in your supply chain to identify and act on early-warning

signs? In the case of a sudden scarcity risk do you have a way to get real-time supply information and fast implementation of preventive measures?

5Are you consulting suppliers and customers to investigate new business models to reduce

resource scarcity risks?

6Are there opportunities in your sector to take an integrated, sustainable approach to your

supply chain?

7Are you identifying and promoting the en-vironmental, economic and social value of

your products, and feeding this back into product development?

8Do you have modern process-control systems in place to manage production in ways that

reduce or eliminate waste?

9Have you evaluated the potential of initiatives such as extending product life, take-back

programmes, extended product responsibility and closing the loop in your product design to rein-force customer relationships and sustain revenue streams?

10Do you have effective lifecycle assessment and ‘cradle-to-cradle’ strategies to design

out or minimise harmful impact and maximise benefits for any give production process?

Managing risk equally prone to risk, the chemical industry is likely to face heightened risks over the the next five years.

The renewable energy, automotive and high-tech industries have a high level of cooperation with their first-tier suppliers and customers to reduce the impact arising from supply-side bottlenecks. The survey results indicate that a majority of them feel that they are sufficiently prepared.

Companies in Europe believe that they are well prepared in terms of policies and programmes to mitigate the potential impact of scarce minerals and metals, though all respondents felt that NGOs, custom-ers and employees are less prepared to tackle the issue. The various measures suggested by industry participants to overcome the problem include investment in R&D activities, searching for substitutes and redesigning products, sharing market forecasts, trends, cost projec-tions and price controls, long-term forward contracts and upgrading technology. Joint development with suppliers of certain product lines that require scarce minerals and metals was also suggested.

6. A large majority of the companies participating in the study feel that efficiency and collaboration throughout the supply chain are es-sential to responding to the risk.

Resource efficiency is seen as the single most effective response to address resource scarcity, followed by strategic alliances with suppli-ers, supplier diversification, more reuse and active geodiplomacy.

In Europe, end-users are seen as a relevant party because of the possibility of reusing minerals and metals, while respondents in the Americas and Asia-Pacific are more focussed on resource efficiency. Respondents in the infrastructure sector also indicated the importance of regulations as a means of mitigating minerals and metals scarcity.

Coping With sCarCityResource scarcity is likely to be a central issue for business leaders and for policymakers in coming decades. While mineral stock deple-tion is a factor behind resource scarcity for some commodities, for oth-ers it is badly functioning markets and wrong policies. Manufacturers need to realise that even when global deposits are sufficient to meet growing demand over the coming decades, these supplies will not be equally distributed over the world. This will lead to increasing depen-dency on imports, and feed concerns about commodity prices, the new world order and security of supply.

Policymakers are also starting to take action on the issue of re-source supply. The European Union is pursuing a number of initiatives to mitigate the risks of minerals and metals scarcity by using scarce minerals and metals more efficiently in applications, through recycling mandates, and by developing substitutes. It is also pushing for trade policies that favour international open markets for scarce minerals and metals.

While the risk of scarcity is expected to rise significantly, leading to supply instability and potential disruptions in the next five years, PwC believes that this situation will also create opportunities for competi-tive advantage. Collaboration within the supply chain and new busi-ness models will be fundamental to the ability to respond appropriately to the risks and opportunities posed by the scarcity of minerals and metals. Data information, recycling technology, substitution technol-ogy and regulation will all be required elements of any response to the issue of minerals and metals scarcity.


used product and process innova-tion to exploit its core capability in fermentation technology.• Titan’s turnover has shot up to the one billion dollar mark in the last few years riding on the back of accelerated growth in the jewellery business. While its purity plank attracted customers, they also liked the designs the company has created to address the mass market.• Pantaloon (Kishore Biyani’s Future Group) is one of the country’s foremost multiformat retailers with a national footprint. The company has constantly experimented with new formats, based on a culturally-embedded and intuitive understanding of the Indian consumer.

What’s common among these five companies is that they have attained leadership positions thanks to their well-developed and executed innovation strategies. While the importance of innova-tion in global markets remains clearly visible — Toyota’s success with the Prius and Apple’s cash balances of more than $75 bn based on the success of the iPod, iPhone and iPad underline this once again — the emergence of innovation as a differentiator in the Indian market is of relatively recent origin.

Innovation will be even more important for Indian companies and multinationals targeting In-dian and other emerging markets in the years to come. While there may be a fortune at the bottom of the pyramid, to quote CK Pra-

the motorcycle industry and still largely dependent on scooters and autorickshaws. Today, it is the sec-ond largest motorcycle company in the country and a strong leader in more powerful and stylish sports bikes. The root of Bajaj’s success was the development of the Pul-sar, a bike that combined power, style and fuel economy based on its DTSi technology.• Biocon entered the biopharma-ceutical business in 1998. Today it is regarded as India’s leading biotech company. It is well ahead of other Indian companies in the production of biosimilars, and may launch India’s first locally-developed novel biotech-based drug in the next few years. It has

Successful Indian companies across verticals have evolved great innovation strategies. This is extremely relevant to today’s CIOs

by rishikesha t krishnan

DeliveringInnovation

India is an increasingly innova-tion-driven market.

What’s common between Tata Motors, Bajaj Auto,

Biocon, Titan and Pantaloon? Of course, they are all large and successful Indian companies. But, consider the following:• Tata Motors wasn’t even in the car business 20 years ago. Yet, today it is India’s third largest car manufacturer and well ahead of top brands like Toyota, Honda and Ford in terms of volumes. It has created robust product platforms around the Indica, Indigo, and Nano brands, specifically designed for the Indian market.• Until 10 years ago, Bajaj Auto was an insignificant player in


opinion

IT-backed innovation is

driving the In-dian market and

will continue to so in the years

to come. Are CIOs ready?

C Y

M

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C Y

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C Y M K

C Y M K

H A N D L I N G I N D I A’ S M O S TIMPORTANT AUTO COMPONENTSH A N D L I N G I N D I A’ S M O S TIMPORTANT AUTO COMPONENTS

halad’s evocative idea, getting to that treasure will need an ability to understand emerging customer needs well, design products and services to meet these needs, and to find processes and business models to deliver these products and services at an affordable cost.

What does this mean for IT Infrastructure? Information Technology (IT) plays a role in today’s innovation scenario in multiple ways:• Ideas are the basic and most critical raw material for innova-tion. Employees across levels and functions can be great sources of new ideas. IT systems that capture, process, catalogue and archive ideas make the innovation process more robust.

• Innovation is all about process-ing information in creative ways. Understanding customer purchase and usage patterns depends on the generation and communica-tion of timely and accurate data from the point of sale. • Capturing data on the failure of past products or shortcomings in service delivery help iden-tify areas for improvement, new product and service ideas as well as prevent the repetition of past mistakes. Mining service records can be a great source of inputs. • Successful innovation is all about mixing and matching differ-ent ideas. Databases containing ideas generated in the past can of-ten be reused. So can components and parts from earlier products. • Product development is a complex exercise. A car or even a

motorcycle has hundreds of parts. Changing the design of just one of these can have consequential implications for the design and functioning of other parts. Product Life Cycle Management (PLM) so-lutions have emerged as important tools to manage this complexity over the life cycle of a product.• Very few innovation efforts are today undertaken by companies on their own. Tata Motors has worked with a large network of vendors to redesign components to bring down the cost of Nano. Biocon’s innovation efforts involve collabo-rations with large pharmaceutical companies, Many companies are keen to embrace a culture of open innovation, and IT provides the collaborative platforms for people

within the company and outside the company to contribute to the company’s innovation activities. IBM has held web-based global innovation jams where it invites users from all over the world to share their ideas.• Capturing the value of innova-tion depends on execution excel-lence. Without management of the supply chain — both at the front end and back end — innovation will result in piled up inventories, stockouts, or the wrong product at the wrong place at the wrong time. IT support for logistics, supply chain management and inventory management become critical in an innovation-driven business strat-egy. For example, Titan creates hundreds of new watch models every year and has hundreds of retail outlets across the country.

These are just some of the ways in which IT is involved in the innovation process. In addition, IT is increasingly involved in the core functionality itself. What does this mean for CIOs? For CIOs, the past was about ERP, CRM, e-commerce, supply chain manage-ment, and security. The future is about providing the IT support to support innovation.

As we explained above, IT plays an important role in facilitating in-novation. Clearly, the information needs of innovation-driven compa-nies are challenging due to their scope and complexity. But the bigger challenge comes from the need to be flexible and adaptable. Innovation is all about change, agility and responsiveness. It is

difficult to foresee how innovation will unfold in the future.

While the implications for technology point to flexible ar-chitectures based on an array of customisable plug-and-play tools, I see the biggest challenge not in the technology but in the ability of the CIO to understand the in-novation strategy of the company and be proactive in providing the best technology support that the innovation programme needs. In-novation efforts in companies will flourish or flounder depending on how innovative their CIOs are!

Rishikesha T Krishnan is a Professor of Cor-

porate Strategy and Policy and the Jamuna

Raghavan Chair Professor of Entrepreneur-

ship at the Indian Institute of Management,

Bangalore. He is the author of the book

‘From Jugaad to Systemic Innovation. The

Challenge for India.’

“For CIOs the past was about ERP, CRM, e-commerce, supply chain management and security. The future is about providing IT support to support innovation” —RIshIkesha T kRIshnan

Prof, CorPorate Strategy & PoliCy, iiM Bangalore

www.industry20.com

opinion

28B december 2011 | industry 2.0 - technology management for decision-makers

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fully expensive, time-consuming and fraught with risks of failure and rejection. Therefore, large multinational firms with deep pockets and worldwide reach de-velop the molecule and market it. After some time, when the original manufacturer’s patent expires, the formulation’s API is open to manu-facturing elsewhere as a generic formulation, albeit under strict government scrutiny, control and regulation. The API can then be sold to the original manufacturer itself, or to any other company that has obtained the licence to make the drug and market it under another name. Driven by lower costs, API manufacturing has been shifting from the West to newer firms in India and China.

For Dr Reddy’s, it made very good business sense to enter the API business as it saw little prudence in competing with global drug giants in designing, making and launching its own drugs. The first of these formulations was Methyldopa, a drug for lowering blood pressure. Originally made by pharmaceuticals giant Merck of USA, Methyldopa was becoming popular in the early to mid-80s.

Four years after being set up, Dr Reddy’s sent a sample of its Methyldopa API to Merck, USA,

Pradesh in southern India. At this facility, the company manufactured active pharmaceutical ingredients (APIs), the core chemical formula-tion of any medicine.

Since there is an active ingredi-ent at the heart of every drug or medicine, a manufacturer first converts raw materials into APIs. Then it creates final formulations through many chemical stages, and turns them into tablets, capsules or any other kind of medicine ready for the market. Making a brand new drug or molecule from scratch is fright-

Innovative thinking and smart decisions make Dr Reddy’s Laboratories India’s second largest pharmaceuticals company

by ruchira mittal

Alchemyof Success

If you have ever fallen ill, chances are that you have reached out for a pill manufactured in one of the 16

world-class facilities of Dr Reddy’s Laboratories (DRL). India’s second largest pharmaceuticals company, after Ranbaxy Laboratories, DRL manufactures nine billion pills and capsules every year, among other speciality products.

Entrepreneur-scientist Dr Anji Reddy founded DRL in 1984 and set up his first manufacturing facility at Bollaram, a suburb of Hyderabad, the capital of Andhra


facilities & operations

DRL cur-rently employs

more than 12,000 people worldwide and manufactures

nine billion pills and capsules

every year

for approval. Merck refused to even consider a product made in India, adding that it was impos-sible for an Indian company to meet its stringent requirements. Undettered, the team at DRL rolled up its sleeves and went back with yet another sample of Methyldopa. Not only was the sample accepted, but after that, Merck bought all its Methyldopa from Dr Reddy’s. Dr Anji Reddy says the Methyldopa success was part hard work and part luck: “There was an explosion in the Puerto Rico plant of Merck Sharp, which caused a sudden shortage of Methyldopa. By then, Merck had already examined and liked the quality of our Methyldopa API. No other company in the world met our standards. Merck will always remember us, obviously.”

Since then, there has been no looking back for Dr Reddy’s Laboratories. It has expanded rapidly, entering the finished dos-ages business and extending its reach across key global markets. Now, the company’s product range is vast. Dr Reddy’s ambition to make a mark and provide quality medicines at affordable prices across the world has propelled his company forward and up-ward. DRL is the first Asia-Pacific pharmaceuticals company outside Japan to be listed on the New York Stock Exchange (NYSE).

Now at DRL, they tell you proudly that they are the young-est pharmaceuticals company to cross the billion dollar mark. That was in 2006. This year’s revenue

has touched INR 8,681 crore (US$ 1.7 bn). DRL employs more than 12,000 people worldwide, including 1,200 scientists. Of this workforce, 2,000 are employed outside India.

DRL has six FDA-approved plants in India, one each in Mexico and Mirfield, UK, and three technology development centres — two in Hyderabad and one in Cambridge, UK. DRL has focussed its energies on developing solu-tions in areas such as gastro-intestinal and cardiovascular diseases, diabetes, cancer, pain management, infection control and medicines for children. Its major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S Africa, Romania, and New Zealand. The company manufactures tablets, capsules, vials, creams, solutions, pres-surised inhalers and other kinds of medicines and formulations. It functions out of 16 world class manufacturing units. It has a dedicated technology develop-ment centre in Hyderabad for its custom pharmaceutical ser-vices (CPS), another CPS plant in Mexico, a technology centre in Cambridge, the UK, and two huge API manufacturing and research facilities in Hyderabad.

It has come a long way from the days when Dr Anji Reddy himself sweated it out over the manufac-ture of drugs like Ibuprofen at the company’s plant at Jeedimetla in Secunderabad, near Hyderabad. Many times, he stayed on call night after night either to motivate his

scientists after what seemed a fail-ure, or to applaud their hard work and success. Reddy worked hard to build a team which was dedicated and enthusiastic about its work.

There are many studies that have gone into the cost of intro-ducing a single new drug mol-ecule in today’s market — from research, development, trials, approvals, follow-up, to manufac-turing, launch and distribution. Experts disagree vastly over the

cost, but a study published in the Health Economics journal in 2010 said it could be as high as INR 6,150 crore (US$ 1.2 bn). Wiki-pedia quoted Dr Marcia Angell, a former editor of the pestigious New England Journal of Medicine, as saying the cost could be close to INR 512 crore (US$ 100 mn). Still, such costs are too high for medium sized companies like DRL. At DRL, this cost is down to less than INR 13 crore (US$ 2.5 mn), since it does not include many of

“... Merck had already examined and liked the quality of our Methyldopa. No other company met our standards. Merck will always remember us...” —Dr Anji reDDy

Founder-chairman, dr reddy’s Laboratories


the time consuming and cost-intensive stages of phased clinical and pre-clinical trials, US food and drug administration’s stringent screenings, open market launches, promotion and distribution.

Investing heavily in research and development is a need of pharmaceuticals companies and DRL has done exactly that. The company has prudently chosen the molecules to be researched. As a result, it has many firsts to its credit. It hit the headlines more than 10 years ago when it became the first Indian company to sell the licence of a molecule it had developed entirely on its own. Named DRF 4158, the molecule is a novel insulin sensitiser, and it was sold to pharmaceuticals giant Novartis Pharma AG of USA for a whopping INR 282 crore (US$ 55 mn) in 2001.

DRL began a drug discovery programme in 1993, and was the first private pharmaceutical company in India to begin new chemical entity research (NCE). In the simplest of terms, an NCE is a molecule developed by an in-novator company in the early drug discovery stage. After undergo-

ing extensive clinical trials, this molecule can translate into a drug that could cure diseases.

Dr Reddy also understood fairly early that tomorrow’s medicines will be developed in the special space of biologics — engineered proteins drawn from living forms. These constitute the fastest grow-ing class of pharmaceuticals. The firm is also working aggressively on the development of biosimilars. These are the equivalent of generic drugs in the arena of biological medicines. DRL also has R&D facilities in China and Russia.

One of DRL’s drugs, Grafeel, is a drug that helps stimulate the bone marrow to replace white blood cells lost during chemother-apy. Developed entirely in-house using the hi-tech recombinant DNA technology, Grafeel contains Filgrastim. It is a generic drug that helps alleviate Neutropenia, a condition that lowers white blood cell count among cancer patients undergoing chemotherapy.

Reditux, another of DRL’s products is the world’s first in its class. It combats non-Hodgkin lymphoma, an entire group of blood cancers prevalent across

the world. In the general drug category, DRL’s easily identifiable generic drugs are Amlodipine for hypertension, Cetrizine, a popular antihisthamine and Iboprofen, the widely used and effective non-steroidal anti-inflammatory drug (NSAID) that helps fight fever, pain and inflammation.

In 2011 alone, DRL launched 135 generic products and has filed 107 new product patents all over the world.

Headquartered in New Jersey, USA, DRL’s wholly owned subsid-iary TM Promius Pharma devel-ops differentiated formulations for skin related problems. The company entered the branded dermatological products market of the US with the launch of EpiCe-ram Skin Barrier, used for the the treatment of chronic psoriasis, an auto-immune condition that attacks the skin and joints.

DRL has taken a leadership position in the growing business of custom pharmaceutical services (CPS). In this area, it serves sever-al innovators and a large number of emerging pharmaceutical com-panies. DRL is now the largest in this sphere in India, offering tailor-made pharmaceutical solutions to companies around the world. Niche technology-led acquisitions have also made DRL a one-stop shop for many customers.

Its acquisition of Roche’s API manufacturing unit in Mexico added the capability to manu-facture APIs for steroids, a vast global market. DRL also acquired the small molecule business of Dow Pharma at its Mirfield and Cambridge sites in the UK.

Since 1984, it has taken constant and aggressive research and development for Dr Reddy’s Laboratories to reach where it has now become firmly established, far ahead of the competition. Sharp thinking and research will propel the company forward in the years to come.

DRL’s Grafeel stimulates the

bone marrow to replace the white

blood cells lost during chemo-

therapy



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Sometimes more than the good Bard would have you believe

by meenakshi kumar

Pict

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cour

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: ww

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If we believe the Bard of Avon, a name by itself doesn’t mean much. So how about a job title? Not

much either, some people might say. After all, whether you call a leader the chief executive officer or its fancier counterpart, the ‘chief dreamer’, he’s pretty much going to battle a similar set of challenges and experience similar highs, they might argue. But some firms disagree — add a dash of innovation to a job title and you might just add a new dimension to a worker’s profile, they say.

There are recent examples of Indian companies thinking out-of-the-box to come up with ‘fun’ designations. Jayaram Rajaram, who co-founded ELSA Learning, is the company’s Managing Direc-tor. But he prefers to be known as its ‘chief dreamer’. “Mine is a strategic thinking role. I need to be uncluttered and think of where the company is headed. In that sense, I am a dreamer,” explains Rajaram. It was his choice to give himself a second job title, in-sync with his work profile. It seems that Rajaram and his team are sold out on creative designa-tions. The Bengaluru-based ELSA has several other interesting examples. Its co-founder, who spearheads the delivery of goods, is both the company’s direc-tor and its ‘happiness coach’. The head of sales is called “the relationship guy”, while the per-son responsible for content and curriculum is ‘the details guy’.

What’s in a Name?



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Rajaram’s philosophy is clear. “When you go to work, you need to have fun,” he says.

At the newly set-up CoCubes in Gurgaon, Anand Subramanian is an ‘evangelist’. No, he doesn’t really preach or pray for people’s happiness. He is a marketing evangelist whose job is to talk about CoCubes, a company that connects colleges and firms online for campus recruitment. Essentially, Subramanian is a marketing and communications professional, who brings with him positive news and connects people. His unique designation just defines his mantra better, he thinks. “It’s about how one wants to project oneself,” he says. There can’t be a better example than Steve Jobs to prove his point, who called himself a technology evangelist.

Similarly, Vijay K Thadani, who co-founded NIIT with Rajendra Pawar, is the CFO: its chief fun officer. He reminisces about how this happened. “My colleague one day called me and said I’d been a CEO for too long. They wanted to promote me to a CFO, the chief fun officer. That’s moving up from E to F,” he laughs. As a chief fun officer, he has appointed several ‘fun managers’. “Work should be an expression of freedom and fun. We make sure we are serious about fun,” says Thadani.

In western firms, especially those involved in technology, such experimental designations have been around for a while. Technology giant Dell has a ‘chief ethic officer’ and the honcho of America Online’s matchmaking site is the ‘CEO of Love’.

What purpose do these designations fulfil? HR observ-ers believe they make sense at a time when traditional roles and responsibilities are undergoing major changes. A designation helps display the imperative focus. More often than not, a

human resources officer is not only responsible for recruitments; he fulfils several other responsi-bilities — general HR activities, industrial relations etc. So when somebody is called a ‘talent ac-quisition officer’, it conveys that the person is absolutely focussed on that one goal.

Thadani says a well-crafted designation can also give employ-ees a sense of worth. “At NIIT, designations are created to align with responsibilities. We try to make it simple, and also add a bit of intrigue.”

In this age of corporate talent war, any tool to motivate employ-ees and have them buy into the organisation is a powerful idea. “It creates an excitement beyond the salary,” says V Suresh, Execu-tive Vice President and Head of Sales at Naukri.com. As Indians, we are very designation-focussed, adds Suresh. “They are status symbols. People love to flaunt them and love the attention they get from these.”

Many of these designations have typically been seen in IT companies or young start-ups, both of which don’t have to subscribe to traditional hierar-chies. They don’t upset the apple cart, so to speak. Often, these designations are people-specific, something that can only work in smaller organisations. For example, at ELSA, employees are encouraged to come up with their job titles. Sometimes, designa-tions are as aligned to the job role as they are to the occupant’s personality. Rajaram recalls a former team member who chose to call herself ‘mother hen’. She actually fulfilled that role — of-fering advice and solving her colleagues’ problems.

In other cases, companies innovate in order to showcase their values. The Future Group, for instance, wanted to draw attention to their belief in their

business. They hired Devdutt Pattanaik, the Indian mythology expert, who chose to call himself the ‘chief belief officer’. His job primarily, as he’s often said in his blogs and articles, is to make people believe in the religion of retail. Belief, Pattnaik asserts, shapes behaviour which in turn shapes business.

As long as the designations don’t become ridiculous, fun is fine, believes Ronesh Puri, CEO of Executive Access, an execu-tive search firm. “If designations become too crazy, they can be counter-productive. Also, the cul-ture of the organisation has to be in sync with such creative titles,” he says.

Not that those with perfect-fit, fancy titles won’t leave their companies for other pastures. When people want to move on, they’ll do so irrespective of their designation. From an employee’s perspective, there are chances of not being taken seriously at client meetings, job interviews or other platforms with such designer designations. ELSA’s Rajaram has a solution. In his organisation, every employee has two titles — the traditional and the quirky. The traditional is used to solicit a meeting or get access to people. Once these conversations begin, people are drawn to the fun title. It becomes a point of conversa-tion, Rajaram says.

CoCube’s Subramanian agrees. As he is today, he’ll continue to be a ‘marketing’ person. There’s nothing to be disadvantaged with a title like evangelist, he adds.

Sometimes, seemingly quirky designations become industry norms like the oft-used chief people officer. So, the next time you hire an operations control-ler, consider calling them a ‘cost kill analyst’. It won’t cost you anything extra and perhaps you’ll maximise on fun and loyalty of your employees.

Designs on DesignationsSome interesting monikers used by companies the world over to give designations that extra zing

01 Venture Catalyst02 Mobile

Community Creator

03 Entrepreneur Mentor

04 Social Media Evangelist

05 Chief Hacking Officer

06 Chief Privacy Officer

07 Chief Competitive Officer

08 Chief Demonstration Officer

09 Vice President for Environmental Innovation

10 Diversity Marketing Manager




management & strategy

rest on a shaky understanding of how corporate responsibil-ity creates value, both for their companies and for society. Some investments, of course, produce immediate and quantifiable gains, such as those from recycling or from manufacturing processes that save energy. But often, social investments are expected to yield longer-term benefits as engaged consumers step up their pur-chases, a broader investor base develops, or new talent flocks to a company’s recruiters.

In these more ambiguous cases, how is a manager to know whether stakeholders will indeed respond positively? Our research, described in greater detail in our recent book, Leveraging Corporate Responsibility: The Stakeholder Route to Maximising Business and Social Value, suggests that while stakeholders’ interpretations of corporate responsibility are multi-faceted and far from uniform, it is vital that managers avoid creating an impression that such activities are crowding out core business priorities. In fact, some well-meaning corporate-responsibility activities can actually harm a company’s competitiveness.

Consider an experiment. We had consumers rate their own purchase intentions for computer accessories after learning about a company’s product quality and corporate-responsibility activi-ties. Descriptions of the company as having high product quality

companies re-engineering supply chains to make them ‘greener’, supporting social causes through volunteer programmes for employ-ees, or lobbying for human rights in far-flung corners of the globe.

As this tide swells, many executives are left with the nag-ging sense that such investments

Now that stakeholders — including consum-ers, investors, and employees — pay

increasing attention to the social and environmental footprints of business, corporate-responsibility efforts have moved into uncharted management territory. We see

Few companies are clear about how investing in social initiatives will change stakeholder behaviour or the harm a bad strategy can cause

by cb bhattacharya, daniel korschun, and sankar sen

corporate responsibility?What Really Drives Value in


had a modest positive effect, but for a company with low product quality, the consumer’s willing-ness to make a purchase actually decreased when it engaged in otherwise positive corporate-responsibility activities (exhibit). In this second case, consumers were wary of these activities, thinking that the company ought to give precedence to product quality. Related research shows a similar dynamic at work with investors: highly innovative Fortune 1000 companies derive greater financial returns from their corporate-responsibility activities than their less innovative counterparts do.

By following a few basic prin-ciples, leaders can increase the likelihood that stakeholders will interpret corporate-responsibility initiatives more accurately and thus more positively.

Don’t hide market motives. Stakeholders are remarkably open to the business case for corporate

responsibility, as long as initia-tives are appropriate given what stakeholders know about the business, and as long as compa-nies genuinely pursue and achieve the accompanying social value. Companies should understand that they can pursue profitable core business and corporate-re-sponsibility objectives in tandem, without trade-offs.

Serve stakeholders’ true needs. Consumers are drawn to products that satisfy their needs. Likewise, stakeholders are drawn to com-panies whose corporate-respon-sibility activities produce solid benefits, which can be tangible (such as improved health in local communities) or psychological (for instance, volunteer programmes that help employees better inte-grate their work and home lives). Before investing in corporate responsibility, however, managers need to set clear objectives that companies can meet and then, ide-

ally, create programmes together with key stakeholder groups.

Test your progress. Corporate responsibility acts as a conduit through which companies can demonstrate that they care about their stakeholders. A company should assess its initiatives regu-larly to ensure that they foster the desired unity between its own goals and those of stakeholders. Calibrating strategy frequently improves the odds that corporate responsibility will create value for all parties.

CB Bhattacharya is the E.ON Chair in Corporate Responsibility and Dean of inter-national Relations at the European School of Management and Technology (ESMT), in Berlin; Daniel Korschun is an assistant professor at Drexel University’s LeBow College of Business; and Sankar Sen is a professor of marketing at Baruch College’s Zicklin School of Business. This article was originally published in McKinsey Quarterly, www.mckinseyquar-terly.com. Copyright (c) 2011 McKinsey & Company. All rights reserved. Reprinted by permission.

Example of computer accessories purchase desicion; on a scale of 1 to 7, where 1 = not at all likely to buy and 7 = very likely to buy

Consumer purchaseintentions

Company with highproduct quality

Company with lowproduct quality

Record of corporate-responsibility activities

Low

High 6

5

4

3

2Negative

Source: CB Bhattacharya and Sankar Sen

Positive

Low-performing companies may reap negative returns from their corporate-responsibility activities

Manoj Kumar Upad-hyay blazed on to the business scene in 2003 with a Power

Interface Unit (PIU). This was an innovative energy manage-ment system for cell towers that dramatically altered the opera-tional costs for telecom compa-nies. It helped players like Bharti Airtel cut fuel bills for gensets, and contributed significantly in helping them execute their grand infrastructure expansion plans. It also ensured that Upadhyay’s company, Acme Tele Power, grew over 6,500 times in a span of six years, swelling from a `30-lakh turnover in 2003 to roughly `2,000 crore in 2009. With telecom, Upadhyay defined what smart thinking and being in the right place at the right time could do for a company. Today, that exponential growth is a tough legacy to live up to. The market

has completely changed — there’s little, if any new demand for telecom infrastructure in India. Over the last three years, Upadhyay has diversified his busi-ness. He knows it’s the only way to grow even half as fast as he’s been used to. Today, Acme Tele Power is dabbling in solar energy, rural electrification and energy management to come up with radically new technology solu-tions. But is Upadhyay anywhere close to his ‘next-big-thing’?

Upadhyay befriended out-landish ideas as a child. When he was just seven, he tried his hand at inventing a new family of medicines — combining allopa-thy and homeopathy. “I used to wonder why we couldn’t mix the two, and make a medicine which had the benefits of both,” he recalls. So he put his ingenious ideas to test. Alas, the formula-tion was a disaster. But young

Upadhyay had spent his month’s pocket money on it. So, to cut his losses, he tried to sell the concoction to cattle farmers in Basti, his hometown, pitching to them the benefits of ‘refined’ hu-man medicine. Unfortunately, the sales efforts came to a naught. Yet, the setback did nothing to dampen Updadhyay’s curiosity. At 12, he dismantled a bicycle because he believed the pull mechanism wasn’t perfect. He tried, but couldn’t reinvent a bet-ter system. Instead, he was left with a heap of parts he couldn’t put back together.

Most of his family and friends thought he was crazy, says 41-year-old Upadhyay. But they are easily forgiven now. After all, nobody could have forecast how far this precociousness would take Upadhyay. Today, as Founder, Chairman and MD of Acme Telepower, he has to his

Acme Tele Power’s business saga is unique. Unlike most start-ups, it grew like lightning thanks to a slew of blockbuster product innovations. Then it hit a wall — growth and revenues slowed dramatically. Can Manoj Kumar Upadhyay put the mojo back into the company?

by shreyasi singh

Phoenix?Rise

of the



credit several patents in energy management and passive tele-com infrastructure. In less than eight years since he founded the company, its products have been installed at more than 1,50,000 telecom sites across India, Sri Lanka, Bangladesh, and a clutch of African nations. Acme is also a keenly-watched solar power player in India with 30 MW either commissioned or in the works. Its green energy solutions help generate carbon emission savings of nearly 2.2 million tonnes a year.

The Blockbuster InnovationIn 2003, telecom in India was beginning to enter its turbo-charged phase. The government was allotting what in industry parlance is called ‘circles’ — es-sentially licences for particular geographic regions to telecom companies. Bharti Airtel was a key player at the time. It had huge growth plans but was beset by anxieties on how it would ramp up its network of cell sites. Most of the infra-structure was imported from European manufacturers. But

this equipment wasn’t able to withstand Indian conditions like erratic power supply and near-bipolar fluctuations. “Power generator sets in Bharti’s cell towers in Delhi were fraught with problems. When Delhi was like this, there were huge worries about what the situa-tion would be in other places,” remembers Upadhyay, who Bharti Airtel had brought on as a consultant to figure out what to do about the problem.

Upadhyay had just sold his entire stake in his first business

Manoj Kumar Upadhyay


venture, a lightning protec-tion systems company, to his cofounder for `20 lakh. Bharti Airtel thought his experience with lightning and power protec-tion systems could help them. Upadhyay put together a project report, and they approached GE for a solution. “What they suggested was not doable, or implementable. It’s then that I started thinking — can I do this? The customer is in trouble. Can I create something that has never been made before?” remi-nisces Upadhyay.

It took him 17 days, 12 of which were spent without a wink of sleep, as he tried to come up with his innovation — the Power Interface Unit, a power manage-ment system that minimised diesel usage and maximised utili-sations of mains power. Bharti lapped up the product because it upped cell tower uptime from an 80 to 90 per cent to close to 97 per cent. It also resulted in huge

energy savings. “We did nearly 80 per cent of Bharti Airtel’s total roll-out from 2003-2009,” says Upadhyay. How important a role that was is evident from Bharti Airtel’s growth trajectory in those days. “We grew from 12,000 sites in 2005 to 1,50,000 in just six years,” adds S Asokan, Executive Director, Supply Chain, Bharti Airtel.

Asokan credits Acme for quickly identifying a ‘sweet spot’. “They saw the opportunity and used it. Basically, they combined many power conditioning equip-ments available back then to cre-ate the PIU,” elaborates Asokan. “I’m very good at putting things together to create new things. It’s not about being the smartest engineer. To create, you need to know what will make a useful product,” adds Upadhyay.

The PIU, which was later patented, became a ‘household name’, says Upadhyay. It also brought him right to the centre of the kind of business he wanted to run — massive and scalable. “I had a huge vision. I’d left Adhunik Power Systems, my lightning company, because I knew it couldn’t scale up to `2,000 crore. That was my filter for a business-worth-doing,” Upadhyay says.

Incredibly, he actually got there. Acme started with `20 lakh as seed capital, and by 2009, it was a `2,000-crore com-pany. The early successes also helped Upadhyay secure a place in history. “I’ve played a critical role in the telecom revolution,” he says with pride. “By bring-ing down fuel costs, we brought down operational costs. We all know the benefits of the telecom revolution in India. It feels great that we’ve played a role in this, and left a social impact by the amount of diesel we helped cut down,” says Upadhyay.

The TwistAcme followed up the PIU with a range of successful prod-ucts such as the Green Shelter (a pre-fabricated, integrated energy management solution which houses the electronics and energy-efficient components at telecom sites), Phase Change Material (a solution for stor-ing thermal energy in off-peak hours that reduces fuel con-sumption by more than 6,500 litres per annum per site) and Free Cooling Units (reduces AC running hours on telecom sites). “They didn’t stop at their first product. Every year, they kept widening the gap between

A Range of Solutions

(from top left) Green Shelter, their prefabri-

cated units for cell sites; solar

thermal plant in Bikaner, Rajasthan;

photovoltaic solar panels

at the plant in Gujarat



them and their nearest competi-tor,” adds Asokan. Even now, roughly 70 per cent of all Bharti Airtel cell sites use one, or more of these products.

Imitation is the best form of flattery, it’s often said. Acme got heaps of compliments in the guise of the many patent wars they had to fight as other tele-com vendors copied their prod-ucts. Within its first five years, Acme had become a compre-hensive wireless telecom energy management company. Thanks to Upadhyay’s itch to constantly experiment, they had also begun to dabble in alternative energy solutions like solar power. In November 2007, the company filed a red herring prospectus to

go public. CRISIL gave Acme’s keenly-anticipated IPO a 5/5 rat-ing. Acme wanted to raise `1,000 crore from the market to invest in bolstering their manufactur-ing and research capacity. But that wasn’t going to be. With the global economic collapse in early 2008, Upadhyay had to abandon these plans. This unplanned turn of events was symbolic of the twists the company would have to begin negotiating.

Asokan says Upadhyay always seemed to him to be more of a technology leader than a driven businessman. There may be a kernel of truth in that. Surely a wiser entrepreneur, especially one who is so technologically sharp, wouldn’t hoard all his

eggs in one basket. In Acme’s case, this spelt double trouble. Not only did all the products cater to telecom, a lion’s share of the business was conducted with one client — Bharti Airtel. Once the frenzy of cell tower construc-tion was over, Acme’s main busi-ness was in trouble.

An R&D junkie by nature, it isn’t that Upadhyay wasn’t trying to come up with industry-transforming innovations even when things were going like a song with telecom. But the waste water treatment plant he conceptualised that could recycle a household’s waste water, and produce clean, usable water, ran into choppy currents. After spending `30-40 crore on

Failed Innovations: Great ideas, alright, but they didn’t go anywhere

Upadhyay knows coming up with brilliant solutions is a factor of constantly trying, and not succeed-ing. Failure isn’t a word that is part of his vocabu-lary, he asserts. Over the last few decades, first

as a student, and later as a professional and entrepreneur, Upadhyay has always allowed his imagination to fly. “You have to keep trying. If you try 20 things, one will work.” Here are some of his efforts that didn’t work out — some didn’t get out of the science lab at all, others cost him several crore rupees.

HydRoplAnT, SHAHjAHAnpUR polyTecHnIc, 1991:A bunch of us thought we could create a hydroplant that would collect the rain between the earth and the sky. The channelled water would then run the turbine. We identified the Khasi Garo Jayantia mountain range in Meghalaya for the project because it’s large and it gets a lot of rain. This idea travelled up the government departments. IIT Roorkee and IIT Kanpur were brought in to see what they thought of this ‘bizarre’ idea. Eventually, it was rejected because if

the channel broke, all of Assam and Meghalaya would get washed out. The risk was bigger than the idea.

FoldABle TelevISIonS, SHAHjAHAnpUR polyTecHnIc, 1991:I always wondered if there could be a foldable television — could one fold the TV like a newspaper? This was before LCD screens became popular.

WASTe WATeR TReATMenT, AcMe TelepoWeR, 2008: Because so many houses in India are not connected to sew-age, I thought every house should have their own waste water treatment plant. We developed through research a washing machine-like contraption that could be fitted in every house. It would treat all the waste water and give back fresh water. We spent `30-40 crore on this research. But, to install this machine, every house would need two different plumbing lines which most houses didn’t have. And nobody would break their houses to rework the plumbing. So we wound the idea up although we still manufacture this for use in defence.


A Backstory: Fit for BollywoodWith the benefit of hindsight, Manoj Kumar Upadhyay’s life makes perfect sense. Pieces of a larger puzzle were strewn across his early years — mirroring the pat-tern his life now follows. They also lend themselves to a dramatic achiever story

Son of a jute factory worker, he spent his early years in Kolkata. His family had to move to their hometown in Basti, Uttar Pradesh, after the CPM movement gained strength in West Bengal in

the late 70s, leading to the closure of all industrial units. Upadhyay stood apart from his family. As others aspired to become bankers, teachers and engineers, Upadhyay remembers wanting to be a businessman ever since he was eight years old.

“Nobody in my entire family was in business. I always wanted to do something different.” That contrarian streak prompted him to give up admission in an engineering col-lege, and join a technical polytechnic in Shahajahanpur, Uttar Pradesh. “Somebody had told me that in a poly-technic, you actually did something with your own hands. It wasn’t about getting theoretical knowledge. I wanted to be both — a scientist and a labourer.” At this institute, Upadhyay quickly acquired a gravitas beyond his position. He began taking classes to fill in for teachers that never showed up. Although he was studying electronics engi-neering, he took classes in mechanical and production engineering as well. “It was great learning. I had to do lots of research to be able to teach.” Through the three years there, Upadhyay pushed himself hard. For the examina-tions, students were asked to answer five out of the 10 questions on paper. “I used to challenge myself — could I answer all 10?” recalls Upadhyay. He also led some ‘bi-zarre’ research projects, none of which saw the light of day (see box). Yet, the overreaching wasn’t self-destructive. Upadhyay created academic history in the institute by be-coming the state topper. “Nobody has managed to match those marks till today,” he says. with pride.

Although his big-business dreams remained constant, Upadhyay took up a job in a German engineering firm after getting his polytechnic diploma. He moved to Germany and within two years, was made head of a department

despitebeing ‘totally wild’, he says. “I was full of ideas. I’d keep giving feedback, asking questions, sometimes not realising I could be fired because of the suggestions I was giving.” The German firm soon moved him to India to lead the indigenisation of their machines for the market here. He recounts a fun anecdote from those days. “When I moved back to India, I told them I’ll leave the company exactly three years later to start my own company. I gave them a three-year notice period. They probably didn’t take me seriously because they were all shocked the day I left,” laughs Upadhyay. And, thus began his entrepreneurial journey. 1999, first with Adhunik Power Systems, and then Acme Tele Power in 2003.

“I always wanted to do something different. I wanted to be both — a scientist and a labourer”—Manoj KuMar upadhyay



research, Acme wrapped up these plans. “To install these, every house would need two plumbing lines. Nobody was going to break their house to get that done,” explains Upadhyay.

Similarly, in 2007, Acme worked on a thermal cooling technology which could store and trans-port vegetables, ensuring they wouldn’t perish before reaching consumers. The lack of cold chain and refrigeration facility is responsible for a lot of produce going waste in India, says Upadhyay. So, they developed hawker carts that could keep the vegetables cool, and farmed a new company called Cold Chain. Although they managed to transport 210 tonnes of vegetables from many states, the company was eventually closed down. “We were too ahead in technology and time with this one. Also, we couldn’t manage the daily give and take of cash. We’d have to become an operational company from a technology company to do this,” explains Upadhyay. Again, they lost nearly `60 crore. Upadhyay philosophises, “No success comes without paying a price, especially when you try to work on disruptive technologies.” He continues, “For one thing to succeed, you have to try 20 other things. From the outside, people can only see the successes. They don’t know how many products we worked on that could never materialise. I was lucky that my first, second and third products were super successful. I had to work much harder for my fourth, and thereafter.”

The FutureNot surprisingly, Upadhyay is an impatient man today, as he waits for another innovation from his stable to storm the market. SS Kohli, Vice President of R&D at Acme uses a sports analogy to describe the performance pressure. “It’s like asking Sachin Tendulkar’s son to give us as many centuries,” he says jokingly.

“It isn’t that we are not growing. We’re still grow-ing 50 per cent year on year. But nobody wants to see a dip. Fifty per cent isn’t great compared to the triple digits we were used to,” confesses Sandeep Sethi, Acme’s CEO. Today, the company has a new set of priority areas — coming up with innova-tive energy management solutions for the telecom sector, targeting Africa as a big export market for their products (compared to India’s 55 per cent, the continent has a tele density of just 33 per cent, says Sethi), and becoming a leading player in solar power, and other alternative energy areas.

Going back to the drawing board has been great, adds Sandeep Kanwar, the company’s chief operating officer. “We have matured a lot in the last four years,” he says. “We’ve been able to take stock and zero in on long-haul, sustainable opportunities. The cornerstone

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of this evolution has been diver-sification,” he adds. Each of the opportunities they have laid out certainly has potential. “We see Africa as being seven years be-hind India in terms of telecom ma-turity. In three years, we’ve grown our business there from $16 to $80 mn a year,” adds Sethi. With about 4,00,000 existing telecom sites, and energy costs amounting to 60 per cent of the operating costs of a telecom operator, Sethi adds that energy management, operations and maintenance is about a `15,000-crore market, of which they currently have less than five per cent. Bharti Airtel’s Asokan agrees that there’s definite promise. “There can be efficien-cies in generation, utilisation and monitoring. In their next birth, companies like Acme can cater

to the very real need to manage these three fronts.” He cuts out the task for Acme, though. “What would make us happy is if they do this with speed. They have to come up with superior products quickly, and make sure they’re easily adaptable.

Upadhyay plays a key role in the company’s new R&D initia-tives. It’s part of his non-nego-tiable morning routine, in fact. “When I come into office, the first thing I do is spend an hour with the R&D team. That gives me the energy to work throughout the day.” He worries that because he “doesn’t actually work with his own hands” on the technology, things don’t get executed as well. “I need a model where the wheels run faster like they used to. Our product pipeline must be robust.”

Kohli, who heads the R&D function, deconstructs the morning meetings. “We’re slowly learning the culture of how he works. He fires away with a lot of ideas. We’re trying to build a cul-ture of technology. Manoj wants to make R&D a process — how do we as a company make sure we think like that?”

Even as Acme tries to do all of that, you get the feeling that it’s solar power which gets Upadhyay most excited these days. In April 2011, Acme commissioned a 2.5 MW plant — which is connected to the grid — in Bikaner, Raja-sthan. In Gujarat, their 15 MW plant is ready and is likely to be connected to the grid within a month. On the back of the Jawaharlal Nehru National Solar Mission — which has mandated

20,000 MW of solar power in India by 2022, pledging $19-bn government funding — the solar power sector is abuzz with new plants and activity. A host of companies have entered the fray to capitalise on the policy push by state governments like Rajasthan, Gujarat and Punjab. Still, Anindya Das, Industry Manager, Energy & Power Systems Practice for South Asia, Middle East and North Africa, Frost & Sullivan, believes Acme already stands out from the pack. Their Bikaner plant, which works on solar thermal power plant, is the first of its kind in Asia, and only the fourth in the world. “Concentrated solar power (CSP) plants become viable if they’re larger than 15 MW. The technology is tough to adapt to smaller projects. Acme has been

brave to do that,” says Das. Most solar projects in India work with photovoltaic (PV) modules — it’s an established technology, and therefore simpler to execute, adds Das. “Everybody is on to PV including large companies like Reliance and Tata. It’s too early to say how successful Acme will be, but with solar thermal, they’ve again shown their intention to be niche, pioneering players.”

Kanwar affirms these ambi-tions. “We want to be in the top three solar players wherever there’s any opportunity. We were the first movers in solar. When we started talking solar, at the end of 2008, the solar mission wasn’t formed. But solar at a MW-scale doesn’t happen overtime.” In March 2009, they signed an exclusive licensing agreement with eSolar, a leading US-based solar producer, to build 1,000 MW of solar thermal power plants over the next 10 years. In fact, Acme made a $30-mn equity investment in eSolar, a rare move by an Indian player, says Frost & Sullivan’s Das. “They haven’t just become eSolar’s distributors. It’s a strategic initiative — to be part of the R&D itself.”

COO Kanwar, who has been with the organisation through the last four years, says smart think-ing like this, shows how much distance Upadhyay has covered as an entrepreneur. “When he began, this was a telecom company. The approach was one-size-fits-all even for the other business verticals that came up. Today, he looks at each business differently.” With solar power, though, project financing and ac-cess to debt capital is likely to be a pain point. Right now, Upadhya says, Acme is largely debt free. Can the warmth of solar power help the company reclaim its scorching past?

Photograph by Subhojit Paul

It took him 17 days, 12 of which were spent without a wink of sleep as he

tried to come up with his innovation



Lower profit margins suggest a need for new business models

by vivian hunt, nigel manson and paul morgan

A wake-up call for

Pict

ure

cour

tesy

: ww

w.ph

otos

.com

BigPharma



The good old days of the pharmaceutical industry are gone forever. Even an improved global economic

climate is unlikely to halt efforts by the developed world’s govern-ments to contain spending on drugs. Emerging markets will fol-low their lead and pursue further spending control measures. Regu-latory requirements — particular-ly the linkage among the benefits, risks, and cost of products — will increase, while the industry pipe-line shows little sign of delivering sufficient innovation to compen-sate for such pressures.

These factors suggest that the industry is heading toward a world where its profit mar-gins will be substantially lower than they are today. This dra-matic situation requires Big Pharma executives to envision responses that go well beyond simply tinkering with the cost base or falling back on mergers and acquisitions. A bolder, more radical approach to Big Pharma’s operating model must become a

realistic planning scenario. While an immediate corrective response in the coming weeks and months may not be the answer, a pur-poseful strategy that provides for this change in the medium and longer-term is necessary.

The case for difficult times ahead is straightforward. McK-insey analysis shows that over the years, real price increases, rewarding past innovation and changes in pathways for treat-ing patients, have been the most significant driver of the pharma industry’s growth (Exhibit 1). Less attention has been paid to manag-ing the cost base. The industry may have recently begun to focus on that, but its heart doesn’t seem to be in the effort, and it has little to show for these efforts.

Years of expansion and profit-ability were in part enabled by regulatory regimes permitting new products to be introduced, benefit-ing patients and pharma compa-nies alike. More recently, and to varying degrees, regulators are introducing new measures raising

the bar for entry, particularly in parts of the developed world. They show little inclination to permit market access, price increases, and follow-on products without proof of substantial incremental clinical benefits. As health care spending relative to GDP con-tinues to rise in many countries, pharma costs will come under increasing scrutiny from govern-ments under pressure to balance their budgets.

The era now drawing to a close may have brought outstanding innovations to patients and profit-ability to Big Pharma, but the industry’s composition evolved considerably during this period, and not necessarily in favour of large companies (Exhibit 2). Conventional wisdom, perhaps fed by high-profile mergers, holds that the industry has consoli-dated. But on the contrary, our analysis shows that it has become more fragmented: the number of companies competing for the profit pool has more than doubled (Exhibit 3). As a result of that

Contributions to revenue growth for pharma, biotech, and generics players,1989–2010, $ bn1

1In real 2009 dollars; figures do not sum to totals, because of rounding. 2For originator products (ie, nongeneric) in developed markets.

Source: S&P Capital IQ Unit; McKinsey analysis

Exhibit 1: Historically, the biggest contributors to industry revenue growth have been innovation, real price increases, and changes in care pathways

Explained by innovation, real price increases, and changes in care pathways

1989 revenues 338

Growth in generics 72

Growth in emerging markets 99

Increased volumes2 52

Attributable growth 562

Residual growth2 158

2010 revenues 720


fragmentation, Big Pharma must compete for parts of the value chain with focussed players — for example, generics companies that excel at manufacturing; life-science service providers that offer flexible, specialised services (such as managing clinical trials) at scale; and biotechnology com-panies that generate innovative ideas and products.

Fragmentation is especially troubling for Big Pharma because it would be natural to expect that economic rents will accrue to an industry’s most innovative com-panies. Since some Big Pharma players can’t deliver innovations as quickly as biotech players can, only brand strength and a global commercial footprint would allow it to go on charging premium prices. A parallel might be drawn with the consumer goods indus-try, where companies operate on margins about half of those that big drugmakers enjoy. Continuing with this scenario, we would ex-pect Big Pharma’s current level of R&D spending to become a luxury that investors no longer tolerate.

We already see these signs today, as some investors and analysts believe that many of Big Pharma’s R&D investments destroy value.

A look at the evolution of the automotive industry may offer some lessons. For many years, it was vertically integrated and dominated by large, primarily Western corporations. But the value chain has been disaggre-gated into companies specialising in narrow parts of the process. Today, component manufacturers, design houses, and basic-materi-als companies share much of the industry’s revenues: the automak-ers are responsible primarily for the design of major components (such as engines), assembly, sales, and marketing.

Similar trends are already apparent in the pharmaceutical industry: Big Pharma increasingly focusses on sales and marketing, relies on in-licensing for innovative products, and outsources portions of activities such as research and manufacturing. This approach has helped pharma and medical-prod-uct service providers to grow at a

disproportionate pace. Of course, the analogy can be taken only so far — the functions that big companies retain in the two indus-tries will differ. The key message, though, is that the value chain has been disaggregated and that the role of incumbent, soup-to-nuts players is much diminished.

Big pharma’s situation can also be viewed through the lens of game theory. It potentially faces a ‘prisoners’ dilemma’ in which refusing to rock the boat helps preserve the existing, profitable model. Alternatively, a single big player, perhaps prodded by a cri-sis, could decide to act in its own interest and secure a first-mover advantage by radically restructur-ing and slimming its commercial and R&D infrastructure. But with markets and stakeholders focussed on the shorter-term, the pressure to sustain the current model is significant. In a hybrid scenario, pharma companies might aim to hedge their bets by sustaining the current model while preparing for the future. Under this option, companies could source a

Growth relative to industry,1 1989–2010, %

1Includes only companies with >$500 mn in revenues in real 2009 dollars. Midsize pharma companies defined as those with $500 mn to $5 bn in rev-enues; Big Pharma as those with >$5 bn.


Exhibit 2: The pharma industry’s composition has evolved considerably

Total industry averagegrowth rate = 4.3%

Generics 11.6

Biotech 4.9

Health care equipment 4.1

Life-sciences services 1.4

Midsize pharma companies –1.0

Big Pharma –1.9



Number of companies in pharma industry,1 1989–2010

1Includes only companies with >$500 mn in revenues in real 2009 dollars. Midsize pharma

companies defined as those with $500 mn to $5 bn in revenues; Big Pharma as those

with >$5 bn.


Exhibit 3: The number of companies competing for the profit pool has more than doubled

192

18

18

38

51

51

16

135

14

18

38

37

19

84

24

27

19

53

6

1989 2000 2010

Life-sciences services

Generics

Biotech

Health care equipment

Midsize pharma companies

Big Pharma

9

substantial part of their innovative compounds from outside firms, externalise activities such as clini-cal trials and manufacturing, and try to sustain an internal discovery capability at previous levels. But high costs are associated with the hybrid approach.

From the outside, it seems that companies are adopting the hybrid option anyway. While there is much discussion of cost control and investment discipline, the actions taken so far seem modest compared with the challenges the industry faces. But the bold first-mover approach isn’t necessarily the right one for all companies. What we advocate is a much greater recognition of the com-ing changes, so that the strategic response to them is explicit rather than accidental.

Unless players choose to make preemptive moves, change in the industry will be led by companies that are less encumbered (for example, privately held ones with a longer-term perspective) or more desperate (such as those facing decline as a result of weak pipelines or other structural defects). In this scenario, players would strive to remove fixed costs in response to more volatile and compressed revenues. ‘Owned’ commercial, manufacturing, and R&D infrastructure would be shed, and companies would rely much more on contracting for all but the core, most value-creating ac-tivities. The residual organisation would be much lighter — perhaps less than half of the starting point.

Executives should test their own level of readiness for such a

fundamental shift in the indus-try’s model. To what extent do their strategic plans accommo-date this scenario? How would they reconfigure the pipeline, manufacturing, and commercial infrastructure to adapt to the change? More fundamentally, how should companies adjust their portfolios of business units and therapy units?

At a more tactical level, Big Pharma companies will require new and improved capabilities in financial planning, capital alloca-tion, communication, the man-agement of external resources, and market access, to name but a few things. Executives must tighten their companies’ financial discipline, ruthlessly reallocating capital across businesses and, in particular, away from underper-forming R&D assets and mature markets that can no longer sus-tain big sales forces. Informing a more competitive R&D strategy with commercial understand-ing, rather than simply targeting regulatory approval, could help companies emerge as winners in the industry.

Our analysis and the conclu-sions we draw imply that execu-tives must approach this envi-ronment in a new manner. They should develop responses that focus on how quickly the change will take place rather than debate what seems inevitable. Strategy is firmly back on the agenda for Big Pharma. Companies that don’t have one or stumble into some-thing by accident will be picked apart, broken up, or taken out.

Vivian Hunt is a director in McKinsey’s Lon-don office, where Nigel Manson is a principal and Paul Morgan is an associate principal. The authors wish to acknowledge the contributions of Dmitry Podpolny and Mari Scheiffele to the development of this article. This article was originally published in McKinsey Quarterly, www.mckinseyquar-terly.com. Copyright (c) 2011 McKinsey & Company. All rights reserved. Reprinted by permission.



Every major organisa-tion has some form of customer call centre. You may have renamed

yours as a contact centre. They are manned by staff that are trained, tooled-up with technol-ogy and incentivised to support customers. The centre is critical as it drives long term sales and protects repeat revenue. It may be considered a ‘profit centre.’

But your customers are calling you less, and only when they really have to. I would suggest that CRM stands for ‘customer rejection management’ rather than customer relationship management; and this is by design. There are three strat-egies that companies are adopting that are driving customers away, giving you less insight into your customers and their needs, and, ultimately, alienating them.

These strategies are:● Outsourcing: lets a call centre

operator talk to your customers● Self service: lets them find their

own answers and● Search/social networking: lets

someone else help themAll three strategies are driven

by a cost-centre/cost-reduction mindset. But the one time you force your customers to contact you is when they don’t want to. This is called non-value demand. In other words, you are making your customers do something that has no real value for them.

Either you make them call a number and sit on hold after they have navigated through a labyrin-thine list of menu options; or you make them go to an unintelligible website, register by entering a huge list of personal informa-tion, wait for a validation email, and then make them try to navi-gate your website — all with little or no guidance or step by step instructions. Sound familiar?

Here are some examples of non-value demand:● Report a fault or error in a

product or service● Fix a problem in a product or

service● Confirm or acknowledge a

change of contract or other details

● Update personal details The opposite of non value de-

Customer Rejection Management?

The people who design operational processes must think from a customer perspective

by ian gotts

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information technology

mand is value-demand. This is something initiated by the cus-tomer that they want for their benefit. They may not want to talk to you but it is worth their time and effort. For example:

● Ask for an increase in credit limit

● Cancel a product or service● Order a product or service● Give feedback

What makes both non-value demand and value-demand non-functional is that companies often compound it with poorly thought through, inadequately tested and inconsistently applied business processes. I am not just talking about the screens in the CRM application but the end-to-end process: the customer journey.

This makes the experience even worse for everybody. The customer is confused and frustrated. The call centre operator is uncomfortable and frustrated; i.e., the customer leaves the call upset, no matter how good, positive or cheerful your call centre person is.

Good Process DesignThe explosive growth of social net-working means that there is now a wide range of ways that a custom-er may get his question answered. They can call you, search your website, email you, search for the answer on a forum, post the ques-tion on a social networking site like LinkedIn or Facebook, or on a micro-blogging site like Twitter.

This is the perfect opportunity for you to take a look at front office processes, and take a customer-centric perspective. Put the cus-tomer at the heart of the situation and think about their journey. The good news is that most of the back office processes can stay the same.

This is the opportunity to take a faster, more effective yet proven approach to process capture/discovery, CRM design, and the adoption of new working practices for your customer facing staff. This

can be done through interactive, collaborative process mapping ses-sions, rapid CRM system prototyp-ing or role-based guided process walk-throughs delivering links to systems, videos, on screen entry, documents and forms, in the con-text of an end-to-end process.

Gone are consultants inter-viewing the staff and producing complex flowcharts that cover the entire wall of the project office. The end to six to 12 month CRM/IT-centric projects.

Just Theory?Is this approach just theory? No. It can be seen on every street in the UK in Carphone Warehouse stores, with an initiative they call ‘How2’. (Full disclosure: Carphone Warehouse is a Nimbus client.)

If you can’t make it out of the office, Carphone Warehouse has documented its project in vid-eos from several perspectives including a retail store, back office, the project sponsor. The results speak for themselves. Just from the deployment to 815 stores the RoI was 1,100 per cent in year one, customer satisfaction (NPS) was up 25 per cent, an additional rev-enue of £5 mn in the first year and they’ve saved £50,000 per year on telephone support calls to stores. In fact, the company has just won a Gartner BPM Excellence Award in the Leveraging BPM Technology category. I’ll contrast this with the non-value demand experience of another UK retailer,

My family has just moved to the USA and before we left we rented out our house. We called the UK-based retailer, 30 days in advance to cancel our TV/phone/broadband service (value demand). The person at the call centre was very helpful. A letter arrived in the post confirming the cancellation of the TV. The letter read:

“Sorry to hear you decided to cancel your subscription. Your viewing will stop on dd/mm/

yyyy. (The date was wrong: non-val-ue demand contact required.) We are delighted that you want to continue your service etc., etc., etc. (Wrong again...).”

So we make a non-value demand call. A very helpful and friendly call centre representative said that we would be receiving separate letters from each depart-ment (telephone, broadband, TV) cancelling the services. Each, presumably, saying the other services would continue, confusing us or prompting more non-value demand calls. We were advised to simply ignore these letters when they arrived.

About a week ago we were sent a letter prompting another non-val-ue demand call. There is a credit on the account and they wanted me to call them to let them know if

we would like a cheque and where to send it. Far better would have been to credit our bank account or attach a cheque to the letter.

The people who design op-erational processes should think about how it feels from a customer perspective. Then how the effec-tive use of technology can en-hance the experience for everyone. The social media revolution taking place is the perfect catalyst.

Ahhh!! I feel better now. Who should I call to tell?

Ian Gotts is the Founder and CEO of Nim-bus. He is the author of six books including two “Thinking of …” books on cloud computing. He is a prolific blogger with a rare ability to make the complex seem simple and a sought after and entertaining conference speaker. This article has been reprinted with permission from CIO Update. To see more articles regarding IT management best practices, please visit www.cioupdate.com.

Put the customer at the heart of the situation; it is his journey

60%companies who use CRM system are satisfied or very satisfied with their system


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bookshelf

Supply Chain Excellenceby Peter Bolstorff & Robert Rosenbaum Price: $45.00Paperback: 284 pagesPublisher: AMACOM

To keep your sales, manufacturing, distribution, and inventory moving in perfect synchronisation, you need a flawless, repeatable sup-ply chain improvement approach that maximises process efficiency, eliminates dysfunction, and aligns disparate organisations.

Featuring examples and experi-ence from roughly 100 projects, the completely updated third edition of the book refines the use of the scorecard for better process analysis; it extends the approach to encompass implementation and strategy; and quantifies the financial value of supply chain improvement to demonstrate its importance in achieving lasting competitive advantage.

This edition breaks new ground with a highly com-pressed timeline for using the SCOR (Supply Chain Opera-tions Reference) framework to plan and execute supply chain improvement. In addition to the value chain process-es of DCOR and CCOR, the book is now adapted for use in a SAP environment.

Best Practice in Performance Coaching

by Carol WilsonPrice: $39.95Paperback: 256 pagesPublisher: Kogan Page

Performance coaching helps individuals and organisations achieve their maximum poten-tial, tackle challenges, and reach specific goals. It leads to personal and professional development and helps to create a work/life balance. This book is both an introduction for anyone thinking of becoming,

or hiring, a coach. As a practical guide to the ‘what’ and ‘how’ of performance coaching, it covers all topics from the personal and executive angle and explains the structure of a coaching relationship. There is extensive guidance on coaching techniques, models, and tools as well as advice on how to train as a coach, how to run a coaching practice and how to structure coaching sessions. Complete with worksheets, exercises, evaluations, and international case studies, this is a thorough guide to performance coaching.

Extra Virginityby Tom MuellerPrice: $25.95Hardcover: 256 pagesPublisher: W. W. Norton

For millennia, fresh olive oil has been one of life’s necessities — not just as food but also as medicine, a beauty aid, and a vital element of religious ritual. Today’s research-ers are continuing to confirm the remarkable, life-giving properties of true extra-virgin oil. But, what if

this symbol of purity has become deeply corrupt? Tom Muel-ler uncovers the fraud in olive oil — and recounts a story of globalisation, deception, and crime in the food industry.

Handbook of Corporate Performance Management

by Mike Bourne & Pippa BournePrice: $55.00Hardcover: 276 pagesPublisher: John Wiley

A thorough and comprehensive guide to measuring and managing the performance of businesses, understanding where you are, communicating where you want to be and managing towards your longer term strategic goals. Taking a practical approach, and includ-

ing details of processes and tools that can be adopted and customised by any organisation, the authors include guiding principles to help readers avoid the pitfalls of inap-propriate performance management. The book combines guidance on the practical use of frameworks such as the Balanced Scorecard, with the application of measures to manage performance.

Apple Designby Friedrich von Borries, Ina Grätz & Sabine SchulzePrice: $60.00Hardcover: 320 pagesPublisher: Hatje Cantz

Apple has made electronics design history with its innovative iMacs, iPhones, iPods and iPads. This book features more than 200 examples of outstanding design by Jonathan Ive, the company’s Senior


Vice President of Industrial Design, who has been responsi-ble for the design of all of Apple’s products. Examining each design in detail, the book compares various approaches to industrial design alongside Apple’s, and casts light on nu-merous aspects of its history, deepening our understanding of contemporary industrial design.

Following an analysis of the forms and functions of the featured Apple products, the book provides an explanation of the innovative production methods and materials applied. Last but not least, it examines Apple design’s overt refer-ences to the simplified forms of the products manufactured by the great German brand Braun.

Start with Whyby Simon SinekPrice: $15.00Hardcover: 256 pagesPublisher: Portfolio Trade

Why are some people and organi-sations more innovative, more in-fluential, and more profitable than others? Why do some command greater loyalty from customers and employees alike? Even among the successful, why are so few able to repeat their success over and over?

In studying leaders who’ve had the greatest influence in the world, Simon Sinek discovered that they all think, act, and communicate in the exact same way. Sinek calls this powerful idea The Golden Circle, and it provides a framework upon which organisations can be built, movements can be lead, and people can be inspired.

Any organisation can explain what it does; some can explain how they do it; but very few can clearly articulate why. Why is not money or profit — those are always results. Why does your organisation exist? Why does it do the things it does? Why do customers really buy from one company or another? Why are people loyal to some leaders, but not others? Drawing on a wide range of real-life stories, Sinek weaves together a clear vision of what it truly takes to lead and inspire.

The Master Switchby Tim WuPrice: $15.95Hardcover: 384 pagesPublisher: Vintage

In this age of an open internet, it is easy to forget that every American information industry, beginning with the

telephone, has eventually been taken captive by some ruthless monopoly or cartel. Could the internet come to be ruled by one corporate leviathan in possession of ‘the master switch’? That is the big question of Tim Wu’s path-breaking book.

Explaining how invention be-gets industry and industry begets empire, a progress often blessed by government, Wu identifies

a time-honoured pattern in the manoeuvers of today’s great information powers: Apple, Google, and an eerily resurgent AT&T. Part industrial exposé, part meditation on what freedom requires in the information age, The Master Switch is a stirring illumination of a drama that has played out over decades in the shadows of American national life and now culminates with terrifying implica-tions for the future.

Growby Jim StengelPrice: $27.50Hardcover: 336 pagesPublisher: Crown Business

Pulling from a unique 10-year growth study involving 50,000 brands, Jim Stengel shows how the world’s 50 best busi-nesses have a cause and effect relationship between financial performance. and their ability to connect with fundamental human emotions, hopes, values and greater purposes

Stengel designed a study to track the connection between financial performance and customer engage-ment, loyalty and advocacy. Then, in a further investiga-tion of what goes on in the “black box” of the consumer’s mind, Stengel and his team tapped into neuroscience research to look at customer engagement and measure subconscious attitudes to determine whether the top businesses were more associated with higher ideals than were others.

Grow thus deftly blends timeless truths about human behaviour and values into an action framework — how you discover, build, communicate, deliver and evaluate your ideal. Through colourful stories drawn from his fascinating personal experiences, Grow unlocks the code for 21st century business success.


Needle Valve

The Series Z3150 needle valve system from Hasco

enables balanced filling of cavities by simultaneous opening valve pins after a certain amount of pressure has built up. The product is suitable for processing polyolefins and styrene in the shot weight range of five to 25g.

The valve has a nozzle front sealing diameter of 10 mm, body diameter of 16.5 mm, and finely scaled nozzle lengths from 80 to 180 mm. The needle valve pin can be changed on machine, and adjusted from the rear without dismantling the hot runner. Optimum transmission of the holding pressure to avoid stringing and drooling of melt at the gates.

Hasco Hasenclever GmbH Tel: +49-2351-9570Website: www.hasco.com

Material Analyser

Oxford Instruments has unveiled a new handheld XRF analyser, X MET7000, which is equipped with 4.3-inch transmissive LCD touchscreen for outdoor

viewing. The device delivers professional materials analysis, verification, and screening. It can be equipped with a variety of analysis methods to meet strict compli-ance regulations, and the result screen can be user-customised. A history view enables browsing of older results and spectra. Avail-able in 13 languages, the analyser is suitable for PMI, metals and alloys, scrap sorting, and precious metals.

Oxford Instruments AnalyticalTel: +44-1494-442255Website: www.oxford-instruments.com

Rotary Sensor

The Vert-X 90E series of rotary angle sensors use a magnetic

pick up secured to the rotating ob-ject for detection. This ensures that there is no direct mechanical link between the shaft and the measur-ing system, and obviates wear. The height of the sensor is 0.59 inch, and it measures 3.54 inches in diameter. The measurement range is 0 to 360°, and repeatability is 0.1°. The units are designed for harsh environ-ments, and have environmental protection rating of IP68 or IP69 depending on model. The 14-bit sensors are available in 5V and 24V supply versions, with up to two switch outputs. Output options include voltage of 10 to 90 per cent of power supply, SPI, and PWM.

Novotechnik US Tel: +1-800-6677492Website: www.novotechnik.com

Interlock Switch

Kirk Key is offering a power panel switch (PPS) interlock that provides electrical isolation in a flexible design to fit

a variety of equipment configurations. The product can be employed in switchgear, electrical distribution, and machine guarding applications.

The PPS is available in six standard contact arrange-ments, as well as custom configurations. Suitable for switch ratings of 20, 25, 40, 63, or 100 amps, the rotary style PPS promotes safe work flows by isolating electrical power, or switching control circuitry. When the PPS key is turned and released, it can be used in the next sequence of operations such as gaining access to now isolated equipment through a hatch door.

Kirk Key Interlock Company Tel: +1-330-8338223 Website: www.kirkkey.com

product update

Drill Sharpener

Darex has developed a four-axis CNC drill sharpener, designated XPS-16, that is capable of restoring high-

performance drill bits. The machine is capable of sharpen-ing 400+ drills with angles ranging from 90° to 150°, in one day. It employs three independent electronic sensors to automatically detect drill length and diameter, locate cutting edges, and calculate the web thickness. The heavy-duty unit also hones carbide drill edges. Equipped with touchscreen LCD panel, the machine allows users to create and store user-specific drill sharpening programmes, in addition to using pre-installed ones. Bench-top sharpener processes a diverse variety of drill types.

1st Machine Tool Accessories LtdTel: +44-1725-512517Website: www.1mta.com

product update


Ball Valve

The Top-Flo 3-way ball valves feature a fully encapsulated PTFE cavity filler and a locking vinyl handle. They are

available in sizes from ½ to four inches, and have ISO-5211 direct mounting pads that eliminate the need for brackets and couplers. The valves are suitable for applications requir-ing tight shut off, and can regulate high-volume, high-pres-sure, and high-temperature flows.

Top Line Process Equipment CoTel:+1-814-3624626Website: www.toplineonline.com

Toolholder

Schunk has developed a hydraulic expanding toolholder that enables quick adjustments. TENDOzero is equipped with four lateral set-screws integrated

into precision mounting that directly controls the tool shank. With a Torx- plus key, the angular position of the clamped precision tool can be corrected and run-out adjusted. Compensation for spindle run-out errors can be done at the machine. The excellent vibra-tion damping provided by the toolholder enables an even cut, and minimises micro blow-outs at the cutting edge. The product also has an internal coolant supply, and the clamping diameter can be reduced by up to three mm using intermediate sleeves.

SchunkTel:+1-800-7724865Website: www.schunk-usa.com

Axial Impeller

The Elta axial impellers incorporate an advanced

airfoil blade design for higher efficiency and lower noise. Available in custom diameters ranging from 12 to 79 inches, the units employ pressure cast aluminium hubs and adjustable pitch blades of aluminium or GRP. Modular airfoil blade design provides quiet operation. The units are available in multiple hubs to blade ratios, and are suitable for OEM applications or as replacement parts.

Continental Fan Mfg IncTel: +1-800-7794021Website: www.continentalfan.com

Pipe Clamp

Sumner Manufacturing has developed a new clamp for securing pipe and fittings on standard vee head pipe

stands. The Hold-E is a steel frame clamp, and is equipped with a unique quick release button that allows the welder to open and close the gripping arms in seconds. The clamp is designed specifically for holding pipe during flange fit-up, short pipe lengths, or when fabricating pipe with branches.

Sumner Mfg CoTel:+1- 888-9996910Website: www.sumner.com.

Material Handling System

Engineered Lifting Systems & Equipment has announced a line of destuffing platforms to facilitate evacuation of transportation containers and trailers car-

rying un-palletised products (boxes, bags, totes, etc.). The system reduces worker back strain and fatigue, and increases efficiencies.

The destuffing systems integrate a host conveyor, and have an adjustable personnel platform for workers to stand on. Standard capacity is 150 lb per unit sequential loading on a pivoting conveyor belt. Anti-collision sensors in the system prevent impact damage against con-tainer sidewalls, and prevent personnel from getting injured.

Engineered Lifting Systems & Equipment Inc Tel:+1- 519-6695545Website: www.engliftsystems.com

High-voltage Amplifier

Trek is offering a new high-voltage linear amplifier that provides precise control of output voltages in range of 0 to ±50 kVdc, or up to 100 kVac peak-to-peak

with output current of 0 to ±12 mAdc or peak ac. The slew rate is greater than 350 V/µs and signal bandwidth (-3 dB) is dc to greater than 20 kHz. With less than 10 Vrms noise, the amplifier can be used for dielectric studies, electron beam ion traps and sources, electro spinning (nanofibers), electrostatic deflection (including ion beam steering), electrostatic flame control, electrostatic levitation, electrostatic precipitation, high-voltage cable testing, high-voltage component testing and plasma studies (including dielectric barrier discharge).

Trek, IncTel: +1-800-3678735Website: www.trekinc.com


Current Sensing Switch

NK Technologies has unveiled the AS1 Series compact case current sensing switch that is powered directly

from the monitored circuit. The switch reports electric motor load status, identifies open heater circuit connections, and verifies that the load is energised. The switch contacts can control AC or DC circuits to 120V, with max load capac-

ity of 150 mA. With solid-state output and no moving parts, the switch provides nearly unlimited operations.

NK TechnologiesTel: +1- 888-6960713Website: www.nktechnolo-gies.com

Vapour Filters

MV Products has developed a new line of vacuum

pump inlet and exhaust trap filter media that can adsorp and neutralise chemical vapour process byproducts. The filters are designed to protect vacuum pumps from specific process con-taminants, and include Resisorb (for mercury vapour), Sulfatreat (for hydrogen sulfide vapour), Am-moniasorb (for ammonia vapour), Sodasorb (for acid vapour), and Potassium Permanganate for neutralising hydrogen peroxide vapours. The filters are suitable for vacuum systems ranging from one to 5,000 CFM.

Mass-Vac, IncTel:+1-800-8686700Website: www.massvac.com

Pressure Blasting Unit

Guyson has developed a com-pact seven-axis direct pressure

blast machine for lean, cell-based component processing. Featuring a work envelope of 30x40x30 inches work envelope, the system employs a six-axis robot mounted on rigidly welded pedestal attached to rear of blasting cabinet. The 24-inch diameter turntable is servomo-tor driven, and is controlled as auxiliary axis of robotic motion.

To maintain negative pressure in blasting enclosure and balance the air flow for media reclamation, the system is equipped with a reverse pulsing cartridge-type dust collector with 1,000 cfm extraction capacity.

Guyson Corp Tel:+1-800-6336677Website: www.guyson.com

Voltmeter Kit

The DVM-80UVK Universal Voltmeter

kit is supplied in a soft-sided, multifunctional bag with built-in bucket hooks. The device is designed to perform voltmeter and phasing operations for virtually all overhead and un-derground applications. The kit includes dual stick phasing voltmeter with overhead hook probes for use up to 40 kV, as well as add-on resistor sticks for measurements up to 80 kV. The model also contains underground bushing probes, cable fault tester, and shotgun hotstick adapters.

HD Electric CoTel: +1-847-4734980Website: www.hdelectriccompany.com

Static-Free Hose

FlexStat CR hose for food and pharmaceuti-cal clean rooms reduces the potential for

explosions involved with pneumatic conveying and powder processing. Made of clear thermo-plastic polyurethane, the hose features a rigid white external ABS helix, smooth interiors, and an embedded copper grounding wire. Available in eleven sizes from one to eight inches ID with a 0.040-inch thick wall, the hose can be used in a temperature range of -40 to 200°F. The product is suited for pneumatic conveying and powder processing applications in clean rooms.

Flexaust Co, IncTel:+1-800-3430428website: www.flexaust.com

Spray Gun

DeVilbiss Automotive Re-finishing has unveiled the

Finishline 4 (FLG-4) spray gun, for enhanced atomisation. The gun is available with multiple fluid tips, and delivers soft uniform spray patterns. The precision-machined air caps and fluid nozzles provide a con-sistent finish. The FLG-4 gun is compatible with waterborne materials, features an easy to clean anodised finish, and has high-grade steel components.

DeVilbiss Automotive RefinishingTel:+1- 800-4453988Website: www.autorefinishdevilbiss.com

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industry 2.0 december 2011

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