India continues to be one of the most dynamic markets for the global construction machinery industry. By 2016, about 80,000 units are expected to be sold in the country. The long-term prospects of the market look sharp, despite the current slowdown the industry is experiencing. By the time this issue goes to press, India would have started casting votes to elect its representatives to the nation´s Parliament amid rising expectations for rapid economic growth and a return of opportunities. There are hopes that a strong government will quickly implement policies for a rapid economic upturn. Until then, the current situation will prevail, continuing to pose newer challenges and shrink opportunities.
Shrinking opportunities is a challenge that the manufacturing sector, of which the construction equipment segment is a part, continues to battle. This is compounded by the fact that windows of opportunities are even less predictable, and tend to shift faster than the industry would like them to. Dismayingly, these challenges are continuing to exert pressure on equipment manufacturers as well as their suppliers like never before. In an environment where the opportunity to sell every machine or every batch of components marks an achievement, it is not surprising to find OEMs and suppliers avail of every opportunity they are presented with, every window of opportunity they get, however small, or however short lived it is. OEMs and suppliers are thus channelling their efforts and resources towards devising new ways of turning out products they specialise in, products that present them with an opportunity to keep growing.
OEMs and suppliers are increasingly shifting to modular ways of working, designing and developing products. OEMs and suppliers are investing in modular architecture; this may not be new at OEM levels but the manner in which the suppliers and component manufacturers are exploiting them is new.
It is also an indication of how the components industry is transforming, consolidating as well as evolving, getting lean to stay fit, ensuring that it truly understands the meaning of ´just-in-time´. This was a term that until now used to define the ability of a supplier to address the need of his client in the shortest possible time stipulated but has now extended to the development of products in the shortest possible time, so that the shrinking windows of opportunities are never lost.
Apart from increasing the ability to tap opportunities, modular product platforms also ensure substantial cost savings. They are ensuring that suppliers continue to maintain a healthy operating environment where pressure on margins does not have much effect. The opportunity to de-risk is not far ahead.