The Government Wants to Capture More Value in Designing Rather than Manufacturing the Manufacturing equipment

Published  January 4, 2022   0
Amit Madan

Though some of India's industry has grown exponentially over the past couple of years, the electronics manufacturing industry (EMS) is still under immense challenges to become globally competitive. Several policies and incentives are being unleashed by the government of India, but somewhere experts opine a detailed framework is also needed. One such industry is Surface Mount Technology (SMT), whose growth in manufacturing in the country is yet to be discussed at a large scale. As the demand for electronics products has increased massively since the pandemic, the utilization of PCBAs has also increased. Now, to produce more PCBAs, the importance of manufacturing SMT machines has to be considered. Around 80 percent of raw materials and components are still outsourced from other countries. In this regard, Amit Madan, Country Manager - India at TransTechnology India Pvt Ltd spoke to CircuitDigest about the various challenges that the SMT manufacturing segment is facing in India, the importance and focus that should be given on making SMTs, and the growth and progress of this segment in the coming five years.

Q. As an entrepreneur, where do you see the current growth of global SMT manufacturing? What are some of the strategies that are required to boost the segment’s growth?

SMT does not exist in isolation. It is a part of the convergence being witnessed between software and hardware with virtually everything or device in life becoming smarter and intelligent. The success of any industry depends on the supply of key input and demand for its output. Clearly, demand is all-pervasive across the globe but unfortunately, the supply side is not yet fully democratized with some countries having an edge over the others. In the Indian context, our government is proactively ironing out supply-side issues with meaningful policy initiatives to foster ever greater growth for the industry as a whole and SMT remains an integral part of it.

Q. How much impact does the coronavirus pandemic have on the growth and manufacturing of SMT? Kindly explain the current situation and what Trans Technology as a global leader is doing to ease the hurdles?

The ongoing pandemic has taught each one of us to be self-reliant since covid-19 induced lock-down disrupted supply chains across the globe. Moreover, it is pertinent for most economies to attribute a fair share of their GDP to manufacturing activities including their requirement for electronic products. Although the pandemic seems endemic right now, the lessons learned are already bringing about a change in electronic manufacturing activities across the globe. Most electronic product manufacturers are running to their capacity to meet unprecedented demand, although challenges for the key input i.e. a semiconductor remain to be resolved. In the wake of this crisis, we attribute our subsistence to our global footprint with local support staff being present in most of the locations that matter. Till date, this remains our key asset where Trans Technology has invested heavily in its people.

Yamaha YSM20 Motor

Q. SMT is one of the essential electronic equipment that is mandatory for assembling any electronic items. How much importance and focus should be given to its innovation because many a time its importance of manufacturing is not recognized by the government?

I cannot emphasize enough the focus and importance of innovation in manufacturing SMT equipment. However, the market for key assembly equipment is oligopolistic in nature where a few global manufacturers compete in the marketplace and command a large market share while the rest is with the sundry. In the Indian context, I think the Government is wanting to capture more and more value in what it takes to design and manufacture the end products rather than manufacturing the manufacturing equipment per se. I would think that it might be difficult for Indian companies to manufacture electronics manufacturing assembly equipment itself without (a) skill sets, (b) technology transfer agreements, (c) supply chain for raw material. Perhaps this is still some time away while an essential thrust is being given to the ecosystem at the product level.

Q. In terms of the Indian perspective, what do you think about the growth and progress of this segment’s manufacturing in India?

We have in 2021 witnessed unprecedented sales in INDIA largely on the back of increased demand. Clearly, we would love to believe that this momentum will continue and grow. However, as a distributor of world-class manufacturing equipment, we will abstain from venturing into manufacturing of the same. This is not our forte` and we will continue to build on our strengths while working on our weaknesses as a distributor cum service provider. It is anybody's guess that China continues to be number one in terms of sales of SMT equipment. As TransTec our focus is on Thailand, Vietnam, and India. These are growing markets and we have a good footprint in them.

Q. What is the current business model of the Trans Technology SMT division? How far has it changed over the years?

Our business model is almost cast in stone where if equipment fails, an engineer is required to attend to it and there is no substitute for personal attention. However, the pandemic brought with it a shift in the way we worked. As a sales leader, I have not taken a flight since March 2020 - yet we have an unprecedented sales record in 2021. Although I very much miss living out of a suitcase, what I do recognize is that most clients are now open to meeting online. It brings about efficiency and economy for both sides and we are now much nimbler without having to travel around the region. This agility is newfound, and I believe it is here to stay.

Q. Can you please highlight some unique features of functionalities of some of your latest SMT machines, which you think is a game-changer in the segment?

Among many manufacturers, we primarily represent YAMAHA from JAPAN. I personally liken SMT equipment to a cab. This analogy between the mindset of a cab owner and that of a YAMAHA SMT equipment owner is quite apt. Both want longevity, up-time, resilience, along-with elasticity & scalability and YAMAHA SMT equipment resonates with all such requirements with precision. We have many customers who are using YAMAHA SMT equipment for well over 10~12 years and in some cases even as much as up to 15~17 years in a 24 x 7 set-up. It is not easy to replicate this performance in the face of constant up-gradation in technology at the product level.

Q. What has trans Technology been doing to stay ahead of the competition curve and what is your roadmap in the coming years?

Without mincing words, I will tell you that it is our dogged focus on our customers that alone has helped us stay afloat despite being a monopolistic market structure that we operate in. We like to stay focused on doing a few things best rather than trying to sell everything to every customer. We are in the business of tangibilizing the intangibles. Our customers keep coming back to us primarily due to our service both in the Sales & Post Sales context. Now, We will continue to invest in our people, their training needs and bring the latest in equipment technology to all of our regions. Transtechnology is already having training centers across our regions of interest including one in Bangalore. Our customers will always find some of the latest in SMT field in our centers and we will be happy to assist them with their needs.