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Embedded System Development and Manufacture

Challenges and Opportunities –

Perspective from Large Corporate

By

Prabhakar Mandakolluthur,

Advisor A&D

26 – 27 Jul 2012

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Tata Group

India’s largest conglomerate

100 operating companies in 7 business sectors

Consumer

Products

Energy Engineering

Materials Information

Technology

&

Communication

Services Chemicals

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TATA Consultancy Services (TCS)

10.17 billion US$ in FY12 revenues

230,000+

110

1000+

55

clients in,

countries

98 % revenues from repeat customers

years in business

employees* representing,

nationalities

Aerospace

& Defense Automotive

Consumer

Products

Energy &

Resources Government Hi-Tech

Insurance Life

Sciences

& Healthcare

Manufacturing Media &

Information

Services

Retail Transportation Travel &

Hospitality Utilities

Banking &

Financial

Services Communications

Depth Of Industry Experience

Delivery Centers

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India Offshore - GDCs - Proximity Centers

Proximity Centers are geared

towards specific customer needs

and/or based on specific

regulatory/staging considerations

Global Delivery Centers

(GDCs) provide scale and

fuller range of services

Mexico

Argentina

Brazil

Hungary

Uruguay

China

Philippines

United

States

Chile

Cincinnati,

Midland

Guadalajara, Queretaro

India

Shanghai,

Shenzhen, Tianjin,

Hangzhou, Dalian

Manila

Buenos Aires

Sao Paulo

Santiago Montevideo

Budapest

Peterborough

Capellen

Quito

Medellin

Toronto

Singapore

Dusseldorf

Yokohama

Madrid

GDC Proximity

centre

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Global Network Delivery Model (GNDMTM) Optimally positioned teams for customer interaction - 15%-15%-70%

Customer Location

Architecture / Design

Specialized domain / consulting

Testing (partial)

UAT Support

System Testing

Level 1 helpdesk (12*7), Incident Management

Impact Analysis, prioritization

North America

Location

TCS Seven

Hills Park,

Cincinnati

15%

Client Site

Location

e.g. Dallas

15%

Transition & acceptance

Requirements Analysis

Enhancement Analysis

Approval and prioritization

Offshore

Location

Mumbai

70%

Construction

Testing

Documentation

Level 1 helpdesk (12*7)

Level 2, 3

Problem Management

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OEM

Integrator

Tier 1 – engage in

large portion of

program

Tier 2 & 3 – engage in

small portion of program

Component Manufacturers

Global A&D Tiered structure Chain Traditional Indian Value Chain

DPSU

PSU

DPSU, PSU,

Ordnance factories

DPSU, PSU,

Ordnance factories

Ordnance factories,

Component manufacturers

Evolving Indian Value Chain

• Historically DPSU, PSU and OFB participate in the entire value chain – from integrator to component

manufacturers (Other than probably Tata trucks used by the army). But semiconductors Electronic

components were invariably imported which is mostly true even today.

• However the last decade has witnessed many changes

– having very dispersed presence, PSUs are not able to address all parts of value chain

- increasing cost in technology intensive product development

- Larger work share to private sector

• The entire process is supported by creation of offset as well as Make policy and Defence production

policy

Global A&D Structure Vs Indian Value Chain

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OEM

Integrator

Tier 1 – engage in large

portion of program

Tier 2 & 3 – engage in small

portion of program

Component Manufacturers

Gaps to be filled – Indian Strategic Electronics

Value Chain

No indigenous Semiconductor

Weak Project Management and

System Engineering Practices

No indigenous core Software

and IDE - OS, BSP etc

No Indian Standards and

Certification Framework

No Indian CAD / CAM Tools

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Nature of Our Global Business (TCS)

Global Market

Large Volumes

Constant Workflow – Very few on bench

Mostly Low to Medium Skill set. (High Skills placed where needed)

Low Investment

Higher Margins

Higher Wages for employees when converted (Deputed from India)

Low Transaction Time & Cost

– Quick in placing order

– Quick Go / No Go Decisions

– Quick Stage gate Reviews

– Quick Acceptance

– Quick Payment

– Quick repeat order based on performance and previous rates resulting in

low talent leakage and low idle resources between projects

Conditions which a business loves

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Trends in the Market

Avionics and

Defence

Trends

(Global/ Indian

Market).

Trend A

Trend B

Trend C

Trend D

Global OEMs setting up shop in India to

leverage local talent for new aircraft

programs

Indian companies partnering with

Global OEMs with risk and reward

models

Indian Defence Offset obligations driving

next wave of growth after A380/ 787

programs, primarily in manufacturing

A&D Labs opening up to outsource

work packages due to many new

Indian programs being launched

(NCA, LCA, MTA, AMCA, UAV,

FGFA, LUH, LCH etc),

Increased focus of DRDO Labs/

MoD on modernisation of Airports/

Command and Control Centres,

NCO, TCS etc

Trend E

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Stars are leaders in

high growth markets.

Cash Cows are highly

profitable, and require low

investment

Question Marks are the real

cash traps and gambles.

Dogs generate very little cash

Dogs are net cash users

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Some Points to Ponder by the industry

Engineering Vs Business oriented Decision

Physical Vs Virtual

Local Demand Fragmented in Time & Volumes

Market Limited to India Needs /Small market size / Exports not

an option as of now - How to justify large investments

Dependence on Foreign Certification Frame work

Technical Standards & Format Wars ,

Multiplicity of Tools and infrastructure to invest in

Product vs Service company

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Technology

1. Plan and establish a Dominant Design Trend for adoption by the industry and

the labs. This means selecting fewer components, materials, design tools,

standards, core software modules OS etc) and ensuring their dominant use.

Shortlist foreign sources initially and replace them with locally developed

substitutes.

2. Set targets and timeframe to achieve desired technology readiness levels for

emerging technologies.

3. Enable wide re use of proven components, modules and sub systems by all by

stipulating their use, at the same time protecting IP. Plan for their periodical life

extension / upgrades.

4. Evolve ways of encouraging and rewarding individuals and small timers who

come out with innovative and brilliant ideas.

5. Co opt and synergize R&D efforts of private sector.

6. Evolve Indian Design Standards.

Some Suggestions by the Speaker

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Some Suggestions by the Speaker (Contd)

Talent Database

1. Create a database of highly skilled / super specialized individuals who are

likely to be available and be co opted for a project of national importance.

Device ways of hiring them at market rates.

2. Think of virtual teams spread across geographies .Adopt concurrent

engineering practices.

Consolidating Infrastructure & Resources

3. Form consortiums where weakness in capability and capacity are overcome by

the strengths of the other

4. Not everything can be done by everyone. Recognize the spaces that

companies operate in

Demand Consolidation

5. Low volumes do not justify large investment. Can we create an export market

? If not possible can we consolidate demand by clubbing demand of varied

users ? Alternate civilian variant can be developed to increase demand.

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THANK YOU

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