The Hindu Business Line : `Fast-eating-the-slow is the order of the day'

First, in an environment where the small industries are finding it difficult to survive, the company has been growing by about 100 per cent each year in the last three years.

Last year, its turnover was a little over Rs 9 crore, and given the performance in the first four months of this fiscal and the order-book position today, it is confident of reaching Rs 20 crore this year.

Second, although it is an SSI, it is a Tier-I supplier to Ashok Leyland. While there is nothing against an SSI being a Tier-I supplier, it is indeed rare.

Prabha Engineers' CEO, Mr C. Siva Kumar, spoke to Business Line about how the company achieved success. What came across very clearly in the interview, was the huge emphasis on HR development. Excerpts:

You have been growing by about 100 per cent in the last three years, despite the slowdown in the economy. How did you achieve that?

It is mainly in times of recession that the best in the industry survive. We grew during the period because our principal customer, Ashok Leyland, found us to be the most competitive supplier of FES.

We upgraded our technology, invested in infrastructure and through constant training, kept the morale of the employees high. We took over a sick company (in 2000) whose unused land (in the Sipcot industrial area of Hosur) lies adjacent to our unit. That gave us more space to expand.

We brought in spot welding machines and upgraded the fixtures, so that the wearing out of tools were uniform and did not affect the product.

But what all this resulted in was, the workmen became extremely committed. The investment in infrastructure, adopting appropriate technology, cost-cutting exercises with committed workmen helped as deliver products of consistent quality at low and reasonable cost and on-time

delivery.

This ensured that the satisfied customers were willing to buy products which increased our market share, which, in turn, resulted in growth.

You are an SSI which is a Tier-I supplier. What are the challenges you face and how do you overcome them?

We strongly believe that an SSI can be more competitive than a large or medium industry. In a competitive environment, the large-eating-the-small is a myth. The order of the day is fast-eating-the-slow.

Today, we deal with over 80 Leyland suppliers directly, who send their products to us. We put them onto the front-end structures that we make, so that we supply them as front-end systems to Ashok Leyland. The main challenge is in managing the inventory and logistics. For both, we

have good IT base and that enables us to be a Tier-I supplier, notwithstanding the fact that we are a small company.

If you ask me, the main challenge for a SSI like us is not so much as dealing with either the suppliers or customers, but to attract and retain talent. This issue has been addressed by creating a work culture which allows them to be a creative and instil a purpose in their work.

Identifying individual talents - competence mapping - and allocation of work based on individual talents ensure that the employees are satisfied with their job.

We have been trying to create a fun atmosphere at work. Apart from regular skill-trainings, the 130-odd workers we have frequently go on trekking trips, in the course of which they receive motivational and management-related training.

The other challenge faced by us is cost of borrowing. The volume of business of large company will ensure that the cost of borrowing would just the PLR. This is mainly due to volume of transaction and the credibility that they earn over the years.

Being an SSI, we differentiated ourselves as a customer who will repay all our dues on time, every time. This

built the credibility which ultimately brought in borrowing at the lower interest rates.

Besides, use of Canara Bank's factoring services has helped us maintain a strict control over working capital.

You have been consistently rated among the best vendors of Ashok Leyland. What are the distinguishing features in your management style that helped you do this ?

The main distinguishing feature is our emphasis on HR management, which is not common in the small-scale sector. Without the commitment of workers, whatever else you do, will fall flat on its face. While the material, system, machine and technology are available for cost, it is extremely important that the human relations with the workmen is extremely strong and meaningful.

The management has introduced welfare measures and training programmes, both for skill and attitude, which have helped build a strong bond.

We have realised that there are a lot of little things that develop commitment in an employee to the company. For example, we send Rs 25 to the parents of every employee, every month, with a word of appreciation about their son. We have schemes for providing educational support for the children of the workers.

Hence, when you respect their parents, appreciate their

work and take care of their children, they naturally develop an affinity for the company.

We have also taken a group gratuity insurance for our employees, which comforts them with the feeling that even if something happens to the company, they would get their money. Above all, we have a wage structure that is better than the industry average.

These measures, coupled with the `fun atmosphere' I was talking about, have given us a tremendous HR resource, which has stood us in a good stead during the recessionary times. That is also the main reason why we have been able to be among the best suppliers to Ashok Leyland.

Today, you are a one - customer company. Are you comfortable with this situation?

We are a one-customer company more by choice and not by default. Ashok Leyland, our principle, is a technologically-strong, market-driven, system-oriented, professionally-managed company. The organisation has a rich culture and their supplier relationship is

extremely strong. We, therefore, feel extremely comfortable with this situation.

What are your long-term plans?

We would like to work on our core strength and maintain the consistent growth and be a major supplier for auto industry. The above objective can be met by increasing our present market share of components as well as developing new components.

In addition, the company is working on new projects which could be with collaboration.

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