India ABO Supplier Conference - Cummins · PDF fileCement Cement Chemicals Agro and Pharma ......

Anant J. Talaulicar

June 29, 2016

India ABO Supplier

Conference

Public

Championing Manufacturing in India23 June 2016

2

Presentation by Mr Anant Talaulicar, Chairman, CII Manufacturing Council and Chairman and Managing Director, Cummins Group India

© Confederation of Indian Industry

Vision of Make in India

3

To generate 100 Million jobs and increase sectoral contribution to GDP to 25% by 2022

2015: GDP ~ 1.8 Trillion USD

2022:GDP ~ 2.7 Trillion USD

Assuming 6% yoy

GDP growth

Manufacturing sector will need to grow at

least 14% yoy to reach 25% of total GDP by

2022

Current:

Manufacturing contribution to GDP

17% = ~ USD 300 Billion

Aspiration:

Manufacturing contribution to GDP

25% = ~ USD 675 Billion


Initiatives of the CII Manufacturing Council

4

To drive double digit growth in Manufacturing sector

Make in India Dashboard Prioritized dashboard

Recipe for Excellence

tool

FTAs Climate Change Market Access

Opportunities

To help actualize vision of Make in India –To generate 100 Million jobs and increase sectoral

contribution to GDP to 25% by 2022

Building Manufacturing Competitiveness

Domestic EcosystemFirm Level

CompetitivenessGlobal Eco-system

Champion Manufacturing Industries 2025

• Identify Champion Industriesthat will drive double digit manufacturing growth keeping in mind Industries of Tomorrow

• Creation of policy and regulatory roadmaps for these industries

Task force on Advanced Manufacturing

Model policies that are championing manufacturing in states


Study on Champion Manufacturing Industries – Approach

5

Identification of top manufacturing

sectors

Identification of universe of sub-

sectors

Identification of top sub-sectors based on

CA and SA

1. Aerospace and Defense

2. Auto and Auto Components

3. Cement4. Chemicals5. Engineering6. ICTE7. Pharmaceuticals8. Steel9. Textiles, Made-ups

& Apparel10. Footwear

~156 sub-sectors identified across 8

sectors

~56 sub-sectors identified as leading

1 Commercial Attractiveness (CA) ; Strategic Attractiveness (SA)


Champion Segments identified

6

Sector Sub-Sector

Aerospace & Defence Aircraft Components

Auto and Auto Components

Auto-Electricals & Electronics

Automotive batteries

HCV

Passenger Cars

Two and Three wheelers

Cement Cement

Chemicals

Agro and Pharma Intermediates

Agrochemicals

Basic Polymers and Elastomers

Construction Chemicals

Other Performance Chemicals

Sector Sub-Sector

Engineering

Construction Machinery

Industrial Valves and Pumps

Machine Tools

Pressure Vessels

Solar energy components (PV)

ESDM

Conventional Lighting and LED lighting fixtures and controls

Mobile phones and accessories

Printed Circuit Boards and sub-assemblies

Pharma

Bulk drugs

Generic Pharmaceuticals

Pharma APIs

Steel

Flats

Forgings and Castings

Longs


Study on Champion Manufacturing Industries – Way Forward

7

Connect with Sectoral Committee heads

Sensitization and buy-in from nodal

ministries

Sharing roadmap with PMO

Actioning of recommendations by sectoral committees

15 - 30 July 2016

10 – 30 June 2016

30 – 15 August 2016

On-going

Roadmap for sub-sectors

15 July 2016

Launch at 2nd

Anniversary of MII

September 2016


Background

• The CII Manufacturing Council undertook a detailed exercise to distill the ‘recipe of success’ of manufacturing companies in India over the long term.

• Performance of 32,000 companies was analysed over a 10-year period using ROCE as a primary measure with follow-on conversations with CEOs of the top performing companies to gain deeper insights.

• Building on these insights, CII’s Centers of Excellence and specialized services teams were brought on board to help build a framework that would help gauge a company’s competitiveness and identify their weaker links.

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… creating a unique ‘Recipe for Excellence’ tool . . .

• Easy to use • Available 24 x 7, across all internet enabled platforms• Geography agnostic

Log onto www.ciimissionmfg.com


… that assesses firm- level competitiveness ...

across 6 functional parameters that are core to an organization…

Environment,

Sustainability

and Governance

Human Resources and

LeadershipMarketingOperations

Research and

Development

Supply Chain

Management


…by completing an objective, easy to fill questionnaire…


…to identify a company’s overall competitiveness

…and in relation to its industry peers…

All manufacturing


…at a functional level…

O is median


…or across key functions …

Environment, Sustainability and Governance

Operations

Marketing

Supply Chain Management

Research & Development

Human Resources and

leadership


… Revealing some valuable insights …

1. Your unit’s weakest operational link

2. Where your unit stands w.r.t. your industry peers and from companies of similar size, scale and employee strength

3. How far your unit is from ‘perfection’

and guide you on the path to achieving manufacturing excellence


… CII Centres of Excellence / specialised teams just a click away ..

CII Technology / R&D team


Fostering a national manufacturing competitiveness movement …

17

Value

Phase 1

Phase 2

Scale and reach

Creating value and scale

Levels of sophistication to be added

Future product extensions for scale and

impact1. Sectoral index –

Targeting through

sectoral committees /

clusters / Associations

Council (ASCON)

2. Geographical index

3. Creation of in-depth

surveys for each

function

4. Addition / Integration

of current offerings of

CoEs such as Water /

Food processing

5. Leverage for

international business

development of CoEs

Phase 3


& helping you scale the peak of manufacturing competitiveness

18

Companies

journey

towards

excellence

Base Camp 1

Base Camp 2

The Peak of Manufacturing Excellence

The Toolkit

• Advisory services to guide companies on their onward path to excellence

• Capacity building through Trainingand Sharing of best practicesthrough case studies and publications

• “Recipe for Excellence” diagnosis

19© Confederation of Indian Industry 19

Join the movement!

www.ciimissionmfg.com

http://www.ciimissionmfg.com/

Power Systems Business

Engine Business

Cummins

Business

Services

Making people’s lives better by

unleashing the Power of Cummins

Components Business

Distribution Business

Cummins Inc.

1919 - Commenced in

Columbus, Indiana

54,600 employees

Capex and R&D: $1.5B

Operations in 190 Countries

90 manufacturing locations

600 distributor locations

7,200 dealer locations

Key Organization Changes

• HMLD is now the Engine Business (on and off-highway engines upto

the ISX) – Srikanth Padmanabhan

• Power Systems is a combination of the old HHP Engine business (K19

and above) as well as the Power Generation business – Dave

Crompton

• New & ReCon Parts which was a part of the old Engine Business is now

a part of Corporate Supply Chain, but the selling portion & P&L is within

each business – Lisa Yoder

• Marketing Communications and Market Strategy functions have been

centralized in Corporate – Marya Rose

• No change to Components or Distribution

Why We Are Here – Guiding Principles

Vision:“Making people’s lives better by unleashing the Power of Cummins”

Personality: Decisive

Driven To Win

Agile

Passionate

Caring

Core Values: Integrity

Innovation

Delivering Superior Results

Diversity

Global Involvement

Corporate Responsibility

Mission: Motivating people to act like owners working

together

Exceeding customer expectations by always

being first to market with the best products

Partnering with our customers to make sure

they succeed

Demanding that everything we do leads to a

cleaner, healthier, safer environment

Creating wealth for all stakeholders

No Longer Merely the Right Things to Do

Corporate Responsibility Diversity

Corporate ResponsibilityTechnical Education for Communities (TEC)

ITI in Phaltan

ITI in Kolhapur

Diversity

Diversity at Workplace Diversity Procurement

External Environment

& CMI Performance

External Environment – Continues to be

Challenging

-4%

-2%

0%

2%

4%

6%

8%

10%

USA EU Brazil Russia China India

GDP Growth Rates – Key Economies

Source: IHS projections, May 2016

India: on Fiscal year basis

2015 Financial Summary 2015 2014

Revenue $19.1B $19.2B

Gross Margin 25.9% 25.4%

EBIT $2.39B $2.50B

Net Earnings $1.40B $1.65B

EPS $7.84 $9.02

Cash Flow from Operations $2.1B $2.3B

ROE 19% 20%

ROANA 25% 26%

EBIT, ROE, and ROANA exclude asset impairment charges and restructuring actions

Cummins Inc. Revenues

$11,362

$13,048 $14,342

$10,800

$13,226

$18,048 $17,334 $17,301

$19,221 $19,110

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Milli

on

s

Manage effectively through periods of weak demand

Position the company to outperform

Build on key capabilities to add new growth

Strategies for Profitable Growth

India ABO

Performance &

Future Outlook

Strategic Leadership

Team

Ashish

Aggarwal

Government

Relations

Rajiv Batra

Finance &

Facilities

Sandeep Sinha

Chief Operating

Officer

Anant Talaulicar

Chairman and Managing Director – India ABO

Sudha Dhar

Chief

Information

Officer & GAC

Venkat

Ramana

Legal & Secretarial

Qureish

Shipchandler

Internal

Audit

Vikas Thapa

Human

Resources

Shveta Arya

Strategy &

Chief of Staff

Jayeeta

Lakhani

Director Product

Planning &

Mgmt.

Sandeep Sinha

Chief Operating Officer – India ABO

Niranjan

Kirloskar

FleetguardFilters

Sandeep

Kalia

Valvoline

Cummins

Babu

Nagarajan

Cummins

Business

Services

Paul

Sowerby

CTCI / CRTI /

Eng

Aditi

Sharma

Quality

Champion

Manoj

Solanki

Hardik ShahShamli

Chapalge

Corporate

Communications

& Branding

Bhavana

Bindra

Distribution

Business

Anjali Pandey

Components

Business

Milind

Madani

Operating

Leadership Team

Ashwath Ram

EBU India

Mandar Deo Amit Kumar

Power Systems

Corporate Supply Chain Organization

India ABO Revenue (INR ‘000 Cr)

4.1

4.9

5.95.4

7.7

9.29.6

8.69.3

10.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Revenue represents Conso + Unconso sales & excludes KPIT

Past & Future

2011-2013

5.6-6.6% GDP Growth

Flat industrial growth

Infrastructure

Bottlenecked

Drop in Consumer and

Business Confidence

2014-2015

7.2-7.3% GDP Growth*

Low

industry growth

Slow Infrastructure

Growth

Growth in Consumer &

Business Confidence

2016-2018 Outlook

7.5-7.7% GDP Growth*

Strengthening industry

growth

Stronger Infrastructure

Growth

Stronger Consumer &

Business Confidence

#Fiscal years

*GDP for 2015 onwards at Market price

Long Term Growth Intact

Macro Trends

Emissions Regulations

Globalization

Infrastructure Development

Growing Middle Class & and

Favorable Demographic Dividend

Energy – Price/Availability

Macro Trends and Our Capabilities Will Drive

Profitable Growth

Growing Middle Class & and

Favorable Demographic Dividend

Emissions Regulations

Infrastructure Development

Technology Leadership

Local Manufacturing

Scale

Strong Partnerships

Macro Trends Key Capabilities

Energy – Price/AvailabilityDiverse Talent &

Leadership

Strong Customer

Support NetworkGlobalization

Common Critical Initiatives

Achieve Zero Defect

First Choice

of Customers

Great Place

to Work

Domestic Market Share

Leadership

Exports

Low Cost Producer

Great Place to Work

Strategic PrinciplesObjectives

Five Philosophies

for our Facilities cleangreen diverseleansafe

Become Excellent in Customer Support

Meet Financial and Operational Targets

Develop a Growth Mindset

Achieve Low Cost Provider

Achieve Supply Chain Excellence

Move from Multinational to Global

Embed Corporate Responsibility into our Business

Invest in Leadership Development and High Performance

Teams

Become World Class in Health, Safety and Environmental

Sustainability

Increase the Strategic Impact and Effectiveness of IT

Achieve

Financial

Targets Over

the Cycle

Goal Tree 2016

Continued Investments in 2016

Cummins Technical Center India

Growing aftertreatment and fuel systems businesses

TCL exports – components and engines

QSK23, V28, K38 and K50 genset assembly lines

Connecting rods machining for KV’s, QSK60 & QSK78 for exports

Upgrade and expand CTT plant at Dewas and Pithampur

Expand the India Parts Distribution Center

Cummins Technical Center India

36new test cells

BU/Common Labs

1,700professionals

at launch

A “Global Integrated Technical

Organisation” that serves the needs of all

businesses, both in India and worldwide

“Cummins is committed to fostering a physically and psychologically

safe, integrity based, respectful, inclusive, high performance culture

that breaks down hierarchies and organizational boundaries, and

engaging the full talents of our diverse employees to delight all our

stakeholders (employees, customers, partners, shareholders,

suppliers, communities) consistently.”

Right Environment Statement - India

Realizing Our Vision

Great

Leadership

Performance

Ethic

Right

Environment

Best

Company

Making people’s lives

better by unleashing

the Power of Cummins

GreatResults

The Most Fundamental Leadership Requirement (Value)

“Leaders love to love people”

“Leaders love to love”

Role Model –

demonstrate skills on

a day-to-day basis

Champion –

drive your

organization toward

world-class

performance in the

skill areas

World-Class Leadership at Cummins

Two levels of

accountability:

Leadership

Values & Personality Performing Teams

Authentic Leadership

Experience

Core Values Personality

Integrity

Innovation

Corporate Responsibility

Diversity

Global Involvement

Delivering Superior Results

Decisive

Driven to Win

Passionate

Caring

Agile

Leadership


Skillsllsuthentic Leadership

Experience

First Five Leadership Skills

Coach and Develop

Foster Open Communication

Diversity Management

Think Strategically / Set The Aim

Talent Management

Second Five Leadership Skills

Creating Safety

Authenticity & Trust

Constructive Conflict

Individual & Collective Accountability

Alignment

Leadership


SkillsllsuthentiLeadershi

Practicexperienc

Leader’s Role in Employee Engagement

Good Boss

Work-Life

Balance

Learning &

Development

Senior

Leadership

Organizational

Culture

Recognition

& Rewards

Meaningful

Work

Career Opportunities

for Growth

In Conclusion

Building one of the World’s Best Company requires the Best Leadership

The Best Leadership creates the Right Environment & Great Results

The Right Environment & Great Results lead to Making the Most People’s

Lives Better

Leadership is YOUR Responsibility

It is a great OPPORTUNITY placed before you

Conditions to Support Outlook

Stable and progressive government to drive growth agenda

Infrastructure spend as per Government plans

Timely emissions regulations, moving to BS VI after BS IV

Government push for GST implementation

FDI limits relaxed to boost foreign investments

Well Positioned for Growth

Values based performance ethic

Market leadership

Long term partnerships

Global technology with localization capabilities

Customer support capabilities

Sustaining business strategy

Strong balance sheet

Significant infrastructure

Experienced leadership team bench

Distinctive culture and a diverse, talented workforce

Summary

Align with us on :

- Values, Leadership, Culture, Quality – Zero Defect, Capacity, Drive

for TCO minimization, Customer Service, Responsiveness, Risk

Sharing, Dependability

Continue to partner together closely to :

- Capture the future with disciplined investments, and

- Grow profitably

Thank you!

India ABO Supplier Conference - Cummins · PDF fileCement Cement Chemicals Agro and Pharma ......

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