India's unique path lies in IT and manufacturing: Shoji Shiba

Shoji Shiba, renowned Japanese management guru and a recipient of the Padma Shri, released his new book 7 Dreams to Reality: Transforming Indian Manufacturing in Delhi on Tuesday (November 26). He spoke about the book and Indian manufacturing to Taslima Khan.

Q.What interests you in India and Indian manufacturing?

A.My first visit to India was in 1965. I am still young but I was much younger then. I was doing comparative research on manufacturing in India , Pakistan, Malaysia, the US and Canada. It focused more on the productivity of manufacturing companies.  I came again in 2000 at the invitation of the Confederation of Indian Industries to introduce a new concept in manufacturing. A good manager should have three eyes - an eye for control, an eye for continuous incremental improvements and also an eye for breakthrough - the ability to see and grab new growth opportunities.  

Q. What is the new book all about?

A. Japan was defeated completely after World War II. But we recovered quickly. Why? Because we dreamed of reaching the same level as the US. We dreamed of being even more productive. Everyone has the same dream. In the same way, manufacturing is a dream in India. The book talks about seven dreams. One of them is: Print to Build, don't Build to Print. Usually in India, someone builds the technology, and then you build the product around it. Creating and building your own products is a dream.

Again, on the operations side, efficiency and productivity is not enough. Happiness of the workers is also important. Manufacturing needs transformation. How to do it is explained in the book through stories of seven different organisations such as Godrej, Sona and Paragon which transformed manufacturing in their own organisations. It's more of a human documentary and explained in an emotional way.

Q. How do you compare manufacturing in India with that in other Asian countries?

Here in India, very few companies at the top of the pyramid have some R&D and build their own products. The widest base of companies at the bottom of the pyramid is those that have no technology. They only get the standards and make the products. But things are definitely better than they were five years ago. That was the assignment I got from Dr. A.P.J. Abdul Kalam on how to improve this base of the pyramid. Compare it to US where there is no hierarchy in terms of companies using technology and those that don't. Everyone is innovative, whether it's big or small companies. Even Japanese companies are far more innovative. However, Indian companies are moving in the right direction now. Quality is becoming a commodity for at least some sectors like auto components.

Q. How would you compare Indian manufacturing with China's?

A. No, China is not a competitor. It operates on a different structure. It is not a democratic country. One political party controls everything. So it can develop infrastructure very quickly. Democratic countries like India and Japan need time. Consensus is required on all matters, even on things like infrastructure . In China, it is big power coming from the top downwards. So many people are crushed. There is no freedom. In India, you have a lot of freedom to say anything you like. In China, there are restrictions.

Q. China has great competence in producing cheap products?

A. Yes, and it is cost competitive.

Q. Do you think China can be equally competitive in terms of quality?

A. Chinese manufacturing is at a certain stage. It was the same for Japan once. Before the 1940s and 1950s, we produced low quality and low-priced products. Then by 1970s and 1980s, we changed to high quality and high-priced products. All countries start from low-quality, low price. China has passed this stage to slightly middle quality, low-price stage.

Q. So is it becoming even more of a competitor for Indian products?
 
A. Each country has a unique path. India's unique path is IT (Information Technology) plus manufacturing. Chinese uniqueness is in manufacturing process which is more pragmatic. The Chinese can go any way. The Indian way is scientific. You are more disciplined. It will take time, but you will slowly be there. Because you have more respect for knowledge and science than imitation.

Q.Indian SMEs (small and medium businesses) are the worst hit by Chinese imports.

A. Yes, they need to transform. Indian small and medium businesses are slightly behind their Chinese counterparts. A lot of that is due to infrastructure issues like road, electricity and ports. Factories have basically the same level of products, but transportation, communications and exports are not effective.

Q. What do you think of government support policies in both countries- China versus India?

A. It is much better in China, because it is very controlled, top to down. But India is democratic. India is more open.              

Q.Do you think auto components is India's best manufacturing sector?

A. I am not so sure if it is the best, but I can say that it is getting better. The 1000 Visionary SME programme of the CII basically aims to bring about a mindset change, called as a big M perspective. The concept says that companies should not only focus on improving all parts of the manufacturing process within their company but also look at the larger system the company works in.

That includes developing sound relationships with customers and suppliers. Chapter five in the book talks about that. The company's goal should be growth and profit both for customers and suppliers.