Moving beyond software

Stanley Glancy / Mumbai

It’s a truth etched in stone that the software services sector has created job opportunities for a large section of the Indian tech community. Our highly skilled, highly talented software engineers are sought by multinationals the world over. But what about the not-so-skilled multitudes? The many who did an ITI or a diploma in hardware engineering thinking of benefiting from the technology boom? Or for that matter, the ones who didn’t even have the privilege of finishing college, leave alone a diploma in engineering or programming?

Various studies conducted by MAIT as well as other industry bodies and research agencies indicate that there are more job opportunities in the PC manufacturing space than the services sector. While the software sector holds the promise of a lucrative career for highly skilled software engineers, the manufacturing sector opens up wider avenues, not only for the highly skilled but also for India’s semi-skilled and relatively unskilled workforce.

Till a few years back the hardware sector didn’t attract many skilled professionals thanks to the huge remuneration packages offered by software service providers. But today there is a perceptible shift in this attitude. One reason could be that there has been a rationalisation of salaries in the software sector. But professionals have also realised that the hardware manufacturing sector offers fulfiling career prospects, be it in research and development or in designing.

And for the not-so-skilled, this sector opens up a whole new world. Unlike the services sector, where there are not many options available for the semi-skilled, the manufacturing sector promises to provide jobs to thousands of people every year. Not only will manufacturing units require people to work in their plants but this also opens up opportunities in the area of sales and marketing, after sales support, technical support, etc. Says Raj Saraf, chief managing director of Zenith Computers, “PC manufacturing will generate additional jobs not only in the area of basic manufacturing and servicing but also in the fields of sales and logistics. Apart from this, it will create job opportunities in the area of user training and user education.” Saraf estimates the industry to generate above 50,000 jobs per year.

Need for indigenous manufacturing

The Indian PC market is divided between multinationals, domestic players and local assemblers. According to studies conducted by MAIT, the unorganised sector still dominates this space with more than 50 percent market share. The rest of the market is divided between the MNCs and domestic vendors with the multinational vendors holding the upper hand. Though this segment has been growing at a rapid rate the PC penetration rate (six per thousand) is still dismal. Prices have been falling over the years, but the PC continues to remain beyond the reach of the common man.

What this means is that though a latent demand exists there is an urgent need to cut prices to make it affordable to the common man. And the best option available would be indigenous manufacturing of PCs. Not only will this drive down prices but will also be the key to

providing employment to a large section of India’s teeming millions. Both software and hardware production are labour intensive processes. But while software calls for skilled labour, hardware manufacturing comprises more of unskilled people. According to Saraf, skilled people accounts for 2-3 percent of the total workforce.

What opportunities exist?

Vendors like Hewlett Packard and IBM already have manufacturing plants or assembling facilities in Mumbai, Bangalore, Noida, Goa or Pondicherry. So do domestic players like HCL Infosystems, Zenith, Wipro and D-Link. D-link, in fact, has three manufacturing plants in Goa employing 400 odd people. Of this, around 125 people account for the skilled workforce.

Manufacturing comprises of various levels, including design, research and development and even sales and marketing. One might wonder what sales and marketing has to do with manufacturing. But truth be told, most domestic players who had ventured into this space initially didn’t survive thanks to the lack of a robust sales and marketing team. Both Zenith and D-Link attribute their success to aggressive marketing initiatives.

R&D and designing are the areas, which calls for highly skilled personnel. The R&D department makes the first prototype of the product. D-link itself has around 65 people working in this section. Though D-Link doesn’t manufacture complete PCs, designing the PC board represents a range of design challenges. The engineer has to design the board in such a manner that it meshes mechanically with the rest of the system it’s destined to be part of. Board design involves more than just integrating components onto the board and routing it. The system design expert will have to consider aspects like how the finished board will interface mechanically with the rest of the system. The design element also includes drawing accurate front panels, enclosures, and other mechanical pieces, ensuring that the board will mesh smoothly with the packaging it will ultimately reside in. This is one area that calls for highly skilled professionals, possibly the best brains in the industry.

The top-tier workers in all manufacturing plant are generally made up of engineers. The middle-tier can comprise either of engineers or diploma holders. Most are generally ITI certificate holders. Companies usually face a shortage of people in the top and middle levels. This leads to poaching workers from the competition, as whenever a new manufacturing unit is set up, there is a need for skilled people with similar skill sets.

The areas

Manufacturing basically involves assembling line and burning facilities. SMT lines form a key aspect of the plant. Managing the SMT lines is a very complex process and requires skilled people. All the personnel handling D-Link’s SMT lines at its plants in Goa are either engineers or diploma holders with considerable experience. At least one skilled person is required per shift to manage a single SMT line. Organisations generally have several such lines. D-link, for instance, boasts of seven SMT lines.

Another area in manufacturing is ‘precision components’. Each product boasts of more than 1,000 components. Consi-dering the number of units manufactured every hour, a plant might be dealing with anywhere between 25,000-100,000 components per hour.

Since manual placing of components on the board can lead to errors, most of the processes where precision is of utmost importance, have been automated. But considering the need for top-notch quality, after the precision components have been laid out they are subjected to a manual check.

There are also components that have to be placed manually. Generally one person is assigned for each type of component. The skills here are interchangeable, as a person working with one type of component can easily shift to another type. It is not difficult to retain people in this section, as long as the company provides them with a good work environment and other benefits.

Other than this, there is also a need for people with managerial skill and technical skill sets for monitoring quality, handling logistics and for handling shifts.

Benefits of indigenous manufacturing

Indigenous manufacturers operate on very low overheads and can offer international quality at highly competitive rates. It provides vendors various benefits compared to importing fully built PCs.

Even multinational firms have realised the benefits of indigenous manufacturing. Wh-ile most are contemplating setting up plants here, some have already set up assembling units. Countries like Taiwan are also slowly losing their price advantage. This has resulted in more and more multinationals looking at prospective cost effective destinations like China and India. While this would mean heightened competition for domestic players, for the job seeker this opens up a vast vista of opportunities.

Also, according to Anand Mehta, manager—HR and administration, D-link, world wide, it has been accepted that the quality of Indian manufacturing is much better than China’s. This could again result in more job opportunities coming India’s way.

Challenges

As far as skilled people are concerned, you need to give them due recognition. Also, skilled people look out for companies that are constantly growing, as they require something new and challenging to keep them motivated. According to Saraf, the churn rate, especially in the area of customer service and sales, is in the region of 20 percent.

There is also a tendency among employees in the skilled category to acquire further skills in software networking specialisation and migrate to that field, as there is a perception that it provides higher remuneration packages, and better growth opportunities.

Another key challenge would be convincing entrepreneurs to venture into this space. Most are unwilling to get into manufacturing as it is still a risky bet. Though the government has been encouraging the manufacturing sector, the policies are not uniform across the country leading to a host of issues.

In conclusion

Despite the seemingly insurmountable challenges, manufacturing is emerging as an attractive career option, which was not the case earlier. Most of the factors needed to encourage manufacturing are present in India. But manufacturing remains a capital intensive business. And it will require people with guts and huge pockets to take on these challenges head on. Few have already taken the step and succeeded and it’s a matter of time before others follow.

stanley@expresscomputeronline.com