—
Soeb Fatehi, President, Control Panel & Switchgear
Manufacturers' Association (COSMA)
The control panel and switchgear industry, though an important
constituent of the power chain, is often a victim of marginalization.
Small and medium enterprises engaged in this business have to
work in challenging conditions, many arising out of systemic flaws,
says
Soeb Fatehi in conversation with
Electrical Monitor. Despite all
odds, Fatehi notes with confidence that the industry is beginning to
turn around with most of the first-generation entrepreneurs
realizing that growth is not an option, it is an imperative.
What are the most common challenges faced by small and
medium industry members of your trade? Why does the industry
tend to get marginalized?
The challenges are many but I will not name the most important.
The biggest reasons why SMBs are stressed in working are
systemic in nature. There is a pattern that transcends business
sectors and regions. If one studies and analyzes the insides of
one's business, one will see the pattern clearly. Seeing the
pattern is only the first step toward a solution though.
Can you name some systemic deficiencies?
Absence of a business plan and a market development plan,
inadequate market intelligence, unclear definition of processes,
insufficient management acumen, unplanned human resources
management, failure to source and use professional expert advice,
shifting focus, lack of understanding of inventory and materials
management, poor attention to debt and credit management and
insufficiency of financial management to hedge against technology
and scale changes. Then there are the location-based challenges
stemming from a variety of typical reasons.
You mention human resource-related challenges. Tell us more.
The business (even when relatively mechanized and automated)
is essentially manpower intensive. Sourcing the right skills and
qualifications required becomes a nightmare when the choice of
location for the business has not sufficient considered this.
Remote or less accessible locations do not allow control panel
and switchgear manufacturing businesses to succeed because
the businesses require a very large number of discrete inputs
from multiple sources. The input materials, components and
sub-assemblies have large variance in sizes, quantities, costs,
frequency of need and sources. The logistics of managing the
supply chain becomes extremely cumbersome and expensive
for remote locations.
Further, location accessibility becomes important because
the business has a large element of customization with no two
products being identical. Even after the best of standardization
is made for the products, every project of every customer has a
different configuration of needs! This requires frequent
interaction between sales, design, materials, production and
quality functions thus rendering remote working very difficult.
There must be some seasonal or market condition connected
challenges too, we feel. What is your view on competition
arising from within the industry?
Yes. Some watchers of the industry do list "competition" as one
of the challenges; however I believe that any business is bound
to be fraught with competition issues. It is natural for an
increasing number of players to be attracted to any business
with potential for growth. Supply and demand will always rock
the market and the most effective learn to survive.
One market specific challenge of importance is the speculative
volatility of metal and plastics prices making raw material
prediction and planning go haywire on a recurring basis. Sadly
this is a factor that we can neither control nor influence; hence
we cannot address it as a constraint. However what we can do is build our processes to plan materials better and
partially hedge against market volatility by
allowing sufficient lead time and controlling
quantities of ordering effectively. This requires
mature operations skills deployment and
precise control on design and consumption. A
hint is due here-businesses will do well to
remember that they are consumers and not
speculators—therefore they may forget their
core business at their own peril!
What is the scene on availability of switchgear for panel
manufacturers?
Erratic availability of switchgear from large makers is indeed
another serious constraint faced by our manufacturers. This
results in disruptions in manufacturing lines and supply time
failures to end customers. One reason for this is poor forecasting
and market planning at the end of the large makers. Another is
that large sector switchgear makers depend on imports from
different sourcing points for their products and component parts.
Instability on global markets, currency fluctuations, shifting
demands in other global regions and operational logistics are
major contributors to the erratic supplies.
This constraint in the supply chain gets accentuated by
paucity of operational planning at the control panel
manufacturer's end. There also exists a tendency to be
adventurous enough in filling up the order book
by making unrealistic delivery commitments.
To end with, do you think this cloud of
challenges has a silver lining?
Of course! Every cloud has a silver lining!
Most of the first generation entrepreneurs,
constituting a majority of business leaders in
our trade, are brave and bold. They take the
bull by the horns and rise to every challenge. The common
thread running in all of them is that they are people with
exceptional multitasking capabilities. They are all business
persons willing to learn what it takes in every commercial,
technical and operational aspect of their businesses. They are
also exceptional risk takers with a strong gut. In many
companies a highly qualified second line has emerged from
amongst the heirs of the original starters.
Now many of the businesses are realizing that growth is no
longer an option and that it is an imperative. Family owned and
family-managed businesses are slowly getting transformed into
professionally-managed businesses. Business owners are
seriously setting their succession plans.
Soon we shall see a churned market scenario where those
who embrace change shall emerge through the filters as
survivors. There's light at the end of the tunnel for those who are
willing to fight at the end of the tunnel!