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April 04, 2002
Manufacturing in India Can Be Globally Competitive, According to Accenture Study

MUMBAI, India; April 4, 2002 India’s manufacturing industry could substantially impact the country’s economic well-being by increasing its growth rate from the current 6 percent to 11 percent by 2006 according to an Accenture study released today, “Making Manufacturing in India Globally Competitive.”

According to the study, while there clearly are actions that the Government needs to take, the private sector and individual organizations can vastly improve efficiencies by realigning internal operations to drive business value.

“The manufacturing industry in India - a major contributor to the overall GDP of the country - in the past few years has missed an opportunity to help drive the country’s overall economic development. Our study is an effort to turn this around through specific suggestions that could contribute to the growth of the manufacturing sector in India,” said Sanjay Jain, Accenture Country Managing Director, during an event organized in Mumbai.

Added Sudarshan Sampathkumar, an Accenture Partner: “India has a working population of approximately 600 million, of which 75 per cent are educated only to middle school or below. For this labor pool, a focus on labor intensive manufacturing sectors can potentially generate employment in adequate numbers, and thus help alleviate poverty.”

In a departure from earlier studies done on the manufacturing sector, Accenture’s report focuses on similar economies in South Asia, particularly China. If the recommendations outlined in the study and targeted for 2006 are implemented, it could potentially increase employment opportunities by 30 per cent or 13 million jobs, trigger an FDI inflow of USD 75 billion (foreign direct investment) and result in an increase in value added from manufacturing by Rs 150,000 crores.

Some of the key recommendations at an organizational level include:

  • Actively adopting a more performance oriented, responsive style of management to retain and leverage talent and knowledge base within the organization
  • Enhancing management accountability and transparency
  • Reengineering core processes to improve efficiency and drive business value
  • Enhancing marketing processes and capabilities
  • Focusing on quality and the consumer

Some of the key imperatives for the Government as listed in the report include:

  • Undertake labor sector reforms - revamp the Industrial Disputes and Trade Union Acts and create a mechanism to protect employees against exploitation and unemployment by establishing labor exchanges
  • Remove distortions between the manufacturing sector and other economic activities
  • Reduce tariffs and core sector privatization
  • Attract FDI into manufacturing
  • Simplify the process of business start-ups and enable easier business exit

The study was conducted over the course of several months and consisted of in-depth interviews and discussions with corporate leaders representing over 30 percent of India’s organized manufacturing, industry associations and members of the political fraternity. The study also included field visits to China and a detailed review of the manufacturing best practices in South East Asian countries.

Accenture analyzed sources of competitive challenges and opportunities, identified recommendations for government and industry leaders and outlined the potential economic benefits of creating a globally competitive manufacturing industry in India.

About Accenture
Accenture is the world’s leading management consulting and technology services organization. Through its network of businesses approach — in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities — Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.

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