JITENDRA DIVGI is Managing Director of Divgi TorqTransfer Systems Pvt Ltd
The speed with which engine technology, including electronics and software, for emission control, fuel economy, and sheer performance is being integrated in India is a pointer that the mystique of automatic transmission (AT) technology will not remain much longer. Companies that seek a product leadership role in the industry will proactively develop a flexible strategic approach that integrates (and the key operating word here is integration) product design with sourcing and manufacturing and is based on deep market, economic, and financial insights. The history of the last 25 years in India shows that such companies will challenge conventional wisdom, stretch the limits of possibilities and lead the revolution!
I want to take the liberty of proffering some unsolicited counsel and tips to my colleagues in industry that you might want to consider as you try and figure out solutions to this rather complex and intractable challenge of figuring out an economically viable solution of bringing advanced AT technology to India.
THE 10-POINT TEMPLATE
1. Transmission development must start from a deep understanding of functionality and the method of realising that functionality. The design rationale of products developed in the market contexts of the United States or Europe will not do. The overall environment, infrastructure, and ecosystem of a market like India demands rethinking of functionality, and the method of realising that functionality, anew. For example, in Europe there is a clear notion of a city car that people generally will not venture out with on the autobahns. In India, on the other hand, it is not uncommon to see our entry level cars on the expressways on long marathon driving vacations. So the way you design an automatic transmission for such applications based on functionality ought to take this aspect into consideration.
2. Transmission technology must focus on the broad architecture of the system, so that new features can be easily incorporated. Clearly, the number of speeds and compatibility for hybridisation are some of the features that you would want to design-protect. Given the popularity of compact SUVs, design-protection for AWD could also be an important requirement. So we dream big, start small, and move really fast up the technology migration path.
3. Manufacturing process innovations are just as critical as product innovations. Innovation must focus on manufacturing that is sensitive to the prevailing conditions without compromising the intent of functionality goals. Since operating costs are lower in India, manufacturing innovation for localisation, when combined with product innovation, can create a powerful pathway to profitability. We have to innovate manufacturing processes because the volumes are just not there to justify the conventional economic wisdom from Japan, Europe or the USA.
4. As emerging markets straddle the globe, solutions developed in India can be scalable and deployable across countries and cultures. This perspective can be the basis for zooming out and looking at not just India but at other similar markets generating powerful economies of scale. India, the ASEAN markets, Russia, Central Asia and Iran constitute one such cluster of contiguous markets that a development out of India can go after. Transfer case products that we developed in India were laterally applied in markets like China and ASEAN to generate competitive economies of scale. Similarly, we need to tap into the ecosystem of China for critical sub-technologies and components required for advanced transmission products. The capacities in China can be a great force multiplier in our innovation efforts.
5. All innovations must focus on conserving resources – eliminate, reduce, and recycle. Standardisation is the key. A multinational customer at BorgWarner in the 1990’s used five different designs to couple the transfer case to the driveline necessitating five different forgings or raw material input forms. In contrast, seven different applications across two customers in India used one standard forging design giving the supplier and the BorgWarner operation economies of scale through scope. Similarly existing aluminium casting designs are used across a wide variety of customers in India and China. By being able to recycle previously invested development work, we were able to eliminate additional work and cost of development, and reduce the variety and complexity in our portfolio of parts to be managed to achieve market expansion.
6. Focus on price-performance of products and services. Serving the Indian market is not just about lower prices. It is about creating a new price-performance envelope that can drive reverse innovation in advanced markets. For example, we in India pioneered the application of hard super finishing of gears in the planetary reduction set of BorgWarner transfer cases and helped upgrade the microprocessor technology to 32-bit architecture more than 10 years ago. I have no doubt that we can help drive similar innovative advances into the state-of-the art of basic technology transferred from Europe or Japan. Initiatives like this enabled us to become India’s first company to design, develop and launch 4WD transfer cases for markets overseas against competition from Japan, Korea, and China.
7. Innovate with advanced technology assimilated into the local infrastructure and ecosystem. A market like India needs advanced technology that is creatively blended with existing and rapidly evolving infrastructure and ecosystem. Dual clutch AT technology enables us to marry technology out of Europe with manual transmission technology in India to take shift performance and reliability to the next level and give what one advertising tag line claimed, “More car per car” with no compromises in performance and reliability. Current investments in manufacturing and in the supplier ecosystem can be leveraged to minimise risk and the pain of dislocation that technology shifts can entail.
8. Products need to be designed to work in hostile environments. India presents a challenge not only in terms of a bewildering diversity of climatic conditions, but also varying skill levels of service, infrastructure in rural areas, and difficulty of access to service in remote areas. Technology and engineering decisions need to be taken in the light of this overall environment that the product applications will be working in. Our driving cycles can get pretty abusive with overloading, intense stop-start patterns compounded by steep gradients. Vehicle calibration must be done carefully taking these conditions into consideration.
9. Appropriately upgrade skill and competence levels of the workforce in sales and service distribution. The service or customer care organisation needs to be involved upfront in the development of the product that is the first application of the new technology, whether it is DCT or a new hybrid powertrain. Tier 1 and Tier 2 suppliers need to be highly proactive as the occasion arises and need to be highly aligned with the OEM in the service and customer care initiatives. A carefully designed and implemented service distribution strategy needs to be implemented well in advance along with the programme APQP. A key aspect would be the approach to train and locate product-expertise and key spare parts and tools for diagnostics and service across the length and breadth of the country. The learning from this would be invaluable in approaching other emerging markets in the world.
10. Education of customers and consumers on product usage and maintenance. This process must begin with key decision makers spending more time observing and learning at various customer touch points at dealerships and service stations. The sheer heterogeneity of customers in the value distribution chain in terms of language, culture, and knowledge level can be a formidable challenge to the technology development team. And therefore the Japanese philosophy of Gemba can be a powerful concept to gain first hand insight on the needs of how training needs to be designed and communicated. The magnitude of this task must not be underestimated.
The principles and lessons learnt from our experience may not apply to a particular situation at hand. We will have to pick and choose and prioritise. The Indian market deserves more attention in terms of making advances in transmission technology that is assimilated in the ecosystem of the country and manufactured locally. Because India will challenge the established way of thinking and the received wisdom of the industry, it has the potential to become the source of innovation for developed markets as well.
(Excerpts from the Keynote address delivered at ATR’s Transmission.tech 2017 conference)