After continuous slowdown over the past few years, Tata Hitachi Construction Machinery Company has achieved an amazing turnaround in its performance last year. Interacting with EQUIPMENT INDIA, Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery Company, shares more about the journey over the years and the way forward.
You took over as Managing Director of Tata Hitachi Construction Machinery when the industry was in a downturn. How do you perceive the turnaround of the company and the industry till now? What were the key challenges?
When I joined the company, I spent three months to understand the company, people, dealers, vendors, etc. I first identified the pain areas and major gaps and then prioritised the major actions we needed to take. The first thing we identified was that we had to make our people happy and motivate them to change the company. That was the biggest challenge but I could overcome that quickly because people were very supportive.
Second, we make machines with the support of vendors who are producing components; they need to produce quality components so we can make good machines. We had a lot of interactions with vendors in a professional manner. They had their own issues because the industry was going through a bad patch. The same was the case with dealers. Then, we needed to serve our customers. So, the alignment of various departments, from supply chain management and quality assurance to production planning and manufacturing, was important. We have plants in three locations: Jamshedpur, Kharagpur and Dharwad. Bringing synergy into all these plants was a huge task. Despite the bad patch the industry was going through, this company has a history of success and I could see that it could be revived.
It took us a year to put our systems and processes in time with very clear key performance indicators, result areas, accountability of people and support for our vendors and dealers to make sure everything falls in place. The industry began to revive and we started to see results quickly within a span of eight to 12 months. After that, there was no looking back. We took many actions. We put on hold the products that were not doing well, where we knew we would not be able to support our customers. So we cleared our inventory and receivable bills and focused on customer satisfaction. The safety of our people and quality of our machines are imperative. We offered very clear direction about the three pillars that would make our company stronger: 'the right machine at the right time'; 'fix it right the first time'; and 'quality is not only what we produce, quality is what we deliver'. The first means the supply of a good quality machine as per the requirement of the customer. The second means our skill levels should be good and we should have service and spare parts available to rectify the machine the first time. The third indicates that we should go beyond just the product to see how we conduct ourselves with customers, dealers and vendors, and how we serve them. So, we will continue to be driven by these three main pillars and we have received good support from vendors, dealers and employees. There will be challenges along the way but it has been a good journey so far.
How did you turn challenges into opportunities for your company?
We were very clear that we had to understand where we are, where we want to be, how long it will take for us to reach there, what steps we need to take to get there and how we go there. Once we made our plan clear, then it is time for continuous follow up and monitoring. That is how we have been working, taking our people along.
Please share the performance of the company in FY2017-18?
We are going to show good growth at about 16-17 per cent overall from April to March. We are looking at a growth of over 20 per cent in terms of revenue. This year, we will turn around and make a net profit. We made a small profit last year but we will make respectable profit this year. We made huge losses earlier because our net worth had eroded two years ago; so, we are building up our assets and net worth. Year on year, it is getting better. This is one of the oldest JVs between two groups, Tata Group and Hitachi. Tata Motors and Hitachi Construction Machinery, the two partners, are committed and supportive; this has given us the confidence to move ahead. We have a lot of positives to back us and a good brand, which we are working on building further. Our engagement with our employees, dealers, vendors and customers has increased and we are trying to infuse a huge amount of energy in our company to support our customers.
What kind of support are you getting from Hitachi?
The technology comes from Hitachi. It has worldwide experience in construction equipment and is a leader in hydraulic excavators and mining equipment. So, we get a lot of know-how, advanced technology and knowledge on how to support our customers, showcase the machine and sell its benefits to customers as well as quality support and support in spare parts. Tata Group supports in the localisation of the machine, manpower resources, and engagement with government departments and customersùTata has a huge amount
of goodwill in the market. So a combination of all these helps us a lot.
What was the motive behind the company's new initiative, 'Chalo Desh Banaye - Building the India of Tomorrow'?
The idea is to support the sentiments and drive of the Government, which is coming out with projects such as Make in India and Skill India. Government is spending a lot of money on infrastructure development and we contribute a lot to infrastructure development. In fact, we are the prime movers here as you need to excavate the earth for any infrastructure development. Excavators play a very important role. So we decided to make a commitment to the nation that we are contributing and let people know what we are doing. We are showing how our equipment is being used in development, whether we are constructing flyovers, airports and waterways or bringing water from canals to farms or mining coal for production of electricity and building roads and highways. Our equipment also plays a very important role in building commercial complexes and residential areas. Indeed, our commitment is to building the nation and that is how the slogan came up.
Tata Hitachi is the market leader in excavators. What are your plans for expanding other equipment ranges?
Yes, as of now, we are mainly in excavators. Hitachi as an organisation has a lot of advanced technologies including the technology for bullet trains. They have leveraged their expertise in construction equipment space by introducing conSite in excavators and similar technology in wheel loaders. Using the Hitachi technology, we have recently refurbished a 3-tonne wheel loader. We are also working with Tata Technologies to develop new backhoe loader with the support of Hitachi Construction Machinery. We have recently showcased SHINRAI, our new backhoe loader concept, at Excon. This new machine will be manufactured in India and launched in three to four months. The name SHINRAI means reliability, trust and confidence. And that is what our brand depicts, whether it is Tata or Hitachi. We want to commit ourselves to producing reliable machines and deliver customer service that inspire trust and confidence. It will take us a few years to develop that kind of confidence in the minds of customers and we are not in a great hurry, especially in the wheel-loader segment. We will take small steps to build ourselves, whether it takes two, three or four years. But whatever we sell, we will give good quality product and service. That is our objective.