Industry face challenge to innovate as lifespan of a product in market gets reduced

Chennai:

The life of a product is getting shorter forcing manufacturing firms to put greater thrust on innovation, according to executive vice president of Ashok Leyland and former president of Confederation of Indian Industry R Seshasayee.

Delivering the keynote address during the 11^th edition of Cost Congress 2012 ‘Changing Business Model in Turbulent Times – Leveraging TCM’, Seshasayee said that earlier the life cycle of a product was 15-20 years but now it is six to seven years and is bound to decrease further.

He said as industry is putting greater thrust on innovation, one should ensure that creativity is not left outside the cost domain.

He said the challenge is to make the cost on engineering more productive. He said currently the industry is focusing on cost management not only inside the factory but also outside the factory to the customer.

He said industry while designing a product has to keep the interest of the customer in mind. “They should learn the language of the customer and understand the value proposition,” said Seshasayee.

He also cited the availability of land as the biggest challenge for industry and said they have to minimize the use of land for more production while citing the example of Ashok Leyland’s Pant Nagar facility. “We put up the facility on half the length we wanted 10 years ago,” he said.

Seshasayee said that there is also not innovation in construction of building and industry has not invested in it to cut the costs.

Koushik Chatterjee, chairman Cost Congress 2012 and executive director and group chief financial officer Tata Steel said that to attain gains, innovation at business model design is most essential. “Developing a successful business model is insufficient to assure competitive advantage as imitation is often easy. But a differentiated and hard ti imitate yet effective and efficient business model is more likely to yield profits,” he said.  

Charles Tilley, CEO Chartered Institute of Management Accountants said that industry should focus on investing in technology, developing new products besides investing in market for growth in the next 18 to 24 months. He said the greatest value for the industry now comes from non financial sources which includes customer relationship, knowledge and human capital, technology and strategic vision.

S Mahalingam, executive director and chief financial officer of TCS also spoke on the occasion.

Tata Motors and Wheels India were also honoured with CII-TCM Maturity Model awards to certified companies during the occasion.