Shriram Pistons & Rings MD & CEO Ashok Taneja shares top 5 learning from slowdown
The past two-years have been tough for the entire automotive industry. Component makers faced an uneven demand. Commercial Vehicle segment demand shrank to the lowest while two-wheelers demand remained steady.
In such a time, how agile and flexible the manufacturing set up is, really gives an edge to the manufacturer. Many a time recession comes as an opportunity to stop and introspect to fix the loopholes in the system. It is also right time to work on the skill development of the manpower.
Country’s leading component manufacturer, Shriram Pistons & Rings, MD & CEO, Ashok Kumar Taneja share his top five learning from the current slowdown.
1. Volatility and uncertainty are part of Indian economy and auto Industry. We will have growth but with hiccups.
It’s important to factor this in our business plans and be prepared how to deal with slowdown that may be prolonged, yet may be followed by period of fast growth.
2. Cash is king. For uninterrupted operations, cash flow has to be given priority.
This means more focus on current assets, only essential Capex and ensuring a debit- equity ratio that does not become stressful in a period of slowdown.
3. Slowdown is the time when team members, both blue collar and white collar are most willing to change. Its the best time to do rightsizing, waste reduction and other improvement projects which somehow get ignored in times of growth.
4. Even in the period of slowdown, there are some sweet spots of growth. For example, while the market for commercial vehicles was in free fall in the last two years, the Tractor market was growing. Similarly devaluation of the Indian rupee, and concurrently increase in cost in China, have made exports from India more competitive, offering a new opportunity for growth in new markets.
5. Not withstanding the slowdown, don’t reduce focus on R&D and up-skilling of employees, at all levels. These are long term bets for survival and growth and the DNA of winners.