India's global manufacturing

India’s offering of a low cost and highly skilled technical workforce is encouraging the world’s manufacturers to set up or outsource some of their product development capabilities there.

by Financial Times, 17 May
Last Updated: 23 Jul 2013

Interestingly, it is not only the Anglo-Saxon companies doing so, who would be expected to take advantage of the prevalence of the English language in India.

The Japanese control systems maker Yokagawa, for instance, has employed 350 development engineers in India, all of whom have since been trained in the Japanese language as well as the Japanese way of doing things. A typical piece of work might be to design a complex piece of engineering equipment to automate a chemical plant in Japan.

One such team of 60 Indian engineers (soon to grow to 100) is termed the J-team and works under the headship of engineer H. B. Jayanthi. She is convinced that learning Japanese has also given her a distinct advantage in understanding how to work for Japanese companies. She says, "Learning the language has helped teach me a more systematic way of working."

India, which has some 30 local languages, has shaped a workforce more able than most to learn new languages. For instance, Johnson Controls, the US vehicle parts maker, sent some of its Indian engineers to Bratislava in Slovakia to work and within no time half of them had learnt to speak Slovak. India’s product development service industry raises some $500m a year and is growing at 25% annually.

As well as the skills – both in technical and language capabilities – there is of course the considerable cost saving. Anil Chitkara, a VP at a US software company says that engineers in a high-wage country will cost between $40-60 per hour as opposed to a cost of $10-25 per hour in countries such as India.

At a minimum, that makes a saving of $15 per hour. For a team of 100 engineers that comes to $1500 per hour, which based on an eight hour day adds up to $12,000 a day. So the World Business back of an envelope calculation is that a company employing 100 engineers in India as opposed to the US, Europe or Japan could save as much as $3m in a given year.

Source: Feast of a Moveable Workforce – India’s Industrial Revolution Part II
Peter Marsh
FT, 17 May 2006
Review by Morice Mendoza

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