A Sustainable Approach Of Client

Cluster Management-CCM

Dr. Prakash Divakaran

Polyrub Cooper Standard FTS Pvt. Ltd

ABSTRACT

• Recently, researchers identified five global mega trends that have

potential implications on business now and in the future. We’ve

expanded on these key trends for the automotive industry that are

interconnected in many ways. These forward-thinking themes are

shaping the future of the automotive industry. With this presentation

we identify and innovate more about these strategic issues

important for any automotive industry organizations worldwide. We

identified few key impact factors which can be considered to make

automobile industry more sustainable. These key factors are

depicted as next:

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Demographic Influence

Economic Power Up & Downs

Focusing Urbanization

Environmental Impact and Sustainability Ratio

Technological Shifts and Solutions

Key Impact Factors

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In combination with the migration of global spending power to

emerging economies, the coming decade will also see explosive

population growth in some countries and declines in others.

These diverging trends will have far-reaching impacts, ranging

from growing pressure on the supply of critical resources to

sweeping changes in people’s goals and aspirations at a

personal and social level.

Demographic Influence

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In the past few years, the global balance of economic power has

been shifting from developed to developing countries. As this

trend continues, it will have an increasing impact on where

growth opportunities arise for companies – and on where they

invest to capitalise on those opportunities.

Economic Power Up & Downs

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Today, almost half of the world’s population lives in cities. But

look back just 60 years to the largely rural world of the 1950s,

and only 30% of people were urban dwellers. However, the rapid

urbanization seen in recent decades is just the start of a

steepening growth curve. By 2030, the proportion of people living

in cities will have surged to 60%.

Focusing Urbanization

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Current estimates suggest that world carbon emissions from

burning fossil fuels – coal, oil and gas – will rise by 16% between

now and 2030. Over the same period, the average global

temperature will increase by between 0.5°C and 1.5°C – that’s

on top of a 0.5°C rise already seen over the past 20 years.

Environmental Impact and Sustainability Ratio

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Every hour of every day, breakthroughs in frontiers of research

and development ranging from nanotechnology to robotics are

opening up new opportunities for businesses and individuals.

Across these areas and more, a perpetual flow of ideas and

innovation is creating ever more powerful enabling technologies,

whose potential uses are limited only by the human imagination.

Technological Shifts

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Leading premium market OEMs – Sales

ranking 2011-2020 [Source: kpmg Survey]

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Purchasing choices not yet driven by

innovative concepts and online services

Importance of vehicle ownership

undisputed across all age groups

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Global OEMs seen as leading in the field of

connectivity and self-driving cars

Impact of Increased Connectivity

More than 4.3 million cars to be produced in Asia by

2015: India focused to be low-cost car production

hub

State of the Global Automotive

Industry

Intense Product & Price Competition

Stagnant Sales except in Asia

Industry Margins Under Pressure

Over Capacity in most Regions

Most of Industry EVA negative

Global Focus to Asia for growth

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Increasingly Stringent Emission & Safety Regulations

Technological capability Cost

Increase in input prices Ferrous & Non-Ferrous Metals Crude oil & derivatives Natural rubber

Rising Customer Expectations Product features Quality & reliability

Integration with Global Markets Lowering product life cycles Reducing time-to-market for new products Threat of new competition

Key Challenges facing the industry

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Increasing disposable incomes

Low operating cost

Higher fuel efficiency of New-generation motorcycles

Greater reliability resulting in low maintenance cost

Low interest rates translating to low financing and acquisition costs hence greater affordability.

Inadequate urban & rural public transportation infrastructure

Ease of use in congested city centres

Growth in Economic Activity

Key Market Drivers

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Road Network Development

Low interest rates. Availability of Financing options.

High sensitivity to Fuel prices

Linked to growth of OEM Industry

Highly sensitive to input cost escalation.

Competitiveness driven by

Manpower – Large pool of qualified engineers & skilled

technicians at lower cost

Lower investment cost – Through appropriate, low cost

automation

Cont…

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Market evolution from Mini cars to Hatchbacks

to Compact Sedans now evident

Increasing customer emphasis on aesthetics

and comfort.

Shrinking product life-cycles

Goods segment growing at faster clip.

Key Trends

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Ability of product to meet increasingly stringent

emission & safety regulations is doubtful.

Market push building up for product

upgradation.

Firms focus on operational excellence to

improve quality & reliability of products.

Increasing relevance of Global Tier 1 suppliers

Cont…

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Opportunities for the industry are emerging both in the areas of Automotive Manufacturing and

Engineering Services – Focus of Indian Automotive Industry

Manufacturing:

Emerging World hub:

Small Cars (Suzuki, Hyundai)

Castings & Forgings

Regional Sourcing base

Aggregates for Entire Vehicle Programs (e.g. Transmissions for Toyota IMV)

Globalisation opportunities for Indian Manufacturers

Increasing exports of “Made In India” vehicles

Establishing manufacturing facilities at foreign locations (e.g. TVS Indonesia)

Contract Manufacturing (e.g. Sub-150cc Bajaj motor cycles for Kawasaki)

Growth through Mergers & Acquisitions

(TATA Motors acquisition of Daewoo Commercial Veh, Korea & Hispano, Spain

Engineering Services:

Global Auto & Auto component majors putting up Development Centres in India, either on their own or in partnership with local players

(e.g. General Motors, Daimler Chyrsler, Johnson Controls, Delphi, Bosch)

Independent Indian OEMs focusing on upgrading their design & engineering capabilities.

(e.g. TATA Motors European Development Centre & Acquisition of INCAT plc, UK)

Technology Trends Survey & Key Findings

CEOs are in no doubt about the role information can play in

gaining insight about customers and how to engage with

them. The sheer ubiquity of mobile devices today has

revolutionized customers’ ability to obtain information – which

has, in turn, transformed how they perceive value and the type of

relationships they want to have with companies. So it’s

understandable why 81% of CEOs see mobile technologies for

customer engagement as most strategically important for their

organization. Data mining and analysis, meanwhile, allows

companies to create the type of relationships their customers

want – so it’s small wonder that 80% of CEOs cite this as

strategically important.

Cont…Key findings

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CEOs want to see a strong connection between digital

investments and business objectives. 86% say a clear vision

of how digital technologies can create competitive advantage is

key to the success of their investments. 83% say the same for

having a well thought-out plan for digital investments that

includes concrete measures of success. But CEOs also know it

can’t happen without them: 86% think it’s important that they

themselves champion the use of digital technologies.

Cont…Key findings

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The central role of information places cyber security

squarely on the CEO agenda. With vast quantities of their

information readily accessible around the clock, customers

expect a certain amount of privacy and confidentiality. But the

increasing frequency of high-profile security breaches has raised

concerns for customers and businesses alike. 61% of CEOs are

worried about cyber security compared with 48% a year ago. So

it’s no surprise that 78% see cyber security technologies as

strategically important for their business.

Cont…Key findings

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Partnering

Developing diverse and dynamic partnerships & Key findings

As companies increasingly focus on key strengths, they’re

looking to partnerships to enhance their capabilities. 51% of

CEOs plan to enter into new strategic alliances or joint ventures

over the next 12 months, up from 44% last year. And crucially,

CEOs aren’t partnering only to expand markets, cut costs or

share risks. Access to new and emerging technologies and

innovation capabilities are top reasons for partnering, cited by

47% and 40% of CEOs, respectively.

Cont…Key findings Cont…Key findings

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Who CEOs are partnering with might surprise you. While

many still work mainly with traditional stakeholders, more than

half of CEOs are also partnering or have considered partnering

with business networks, firms from other industries, academia

and even competitors. Then there are the new customer

relationships. Two-thirds of CEOs are teaming up with

customers, or considering doing so, to drive innovation and new

business ideas, often tapping into the collaborative potential of

social media platforms. Ultimately, the most effective

partnerships will likely bring together established firms, start-ups,

individuals and networks of individuals, and public, private and

third sector organisations.

Cont…Key findings

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Finding innovative ways to build relationships that are

beneficial for all parties is key to success. For example,

cooperation will need to take other forms than price as partners

within a network become more interdependent. Also, the ability

to effectively develop and manage much larger, more dynamic

and more diverse networks of partners will be a hallmark of

success in the new competitive environment. The ability to

harness the power of technology for collaboration will be key to

creating and managing effective partnerships. 77% of CEOs say

that digital technologies are creating value for internal and

external collaboration.

Cont…Key findings

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Competition & Key Findings

As customer needs change, so do the areas where companies compete

Customers today defy classic notions of what drives their

purchasing decisions. Competing within traditionally defined

demographic segments, channels, product/service offerings,

geographies or industries increasingly doesn’t work. Customer

relationships are now much more fluid: they’re moving from one-

off transactions toward broader and longer-term experiences that

can span different product and service offerings, channels,

countries and sectors.

Cont…Key findings

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That’s leading CEOs to take a more flexible view of what

business they’re really in. Companies are increasingly focused

on customer problems, and looking at how the organizational

capabilities that differentiate them can be used in cross-

disciplinary ways to solve those problems. That’s taking

businesses into adjacent – and sometimes completely new –

sectors. More than half (56%) of CEOs think it likely that

companies will increasingly compete in new industries over the

next three years. Three in ten have entered a new sector or sub-

sector in the past three years; and 21% have considered doing

so.

Cont…Key findings

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CEOs need to develop a few key capabilities to

succeed. Navigating their way through new competitive

landscapes will require a simple but committed concentration on

doing what they do best. Drawing on their differentiating

capabilities, they will then need to create new value in new ways

through digital transformation, developing diverse and dynamic

partnerships and finding different ways of thinking and working.

The companies that can effectively combine these highly

interdependent approaches around simple yet powerful value

propositions will be positioned as winners in the new competitive

landscape.

Cont…Key findings

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Diversity & key findings

Finding different ways of thinking and working

Talent diversity and inclusiveness are no

longer seen as ‘soft’ issues, but rather as

crucial competitive capabilities. Of the CEOs

whose companies have a formal diversity and

inclusiveness strategy, 85% think it’s improved

the bottom line. And they also see such strategies

as benefiting innovation, collaboration, customer

satisfaction, emerging customer needs and the

ability to benefit technology.

Cont…Key findings

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CEOs are looking for the right mix of talent. Having people

who can think and work in highly different ways is crucial in a

competitive environment where companies need to apply their

capabilities in more innovative ways, partner successfully and

harness technology effectively. 81% of CEOs say their

organizations are now looking for a much broader range of skills

than in the past. And to find the skills they need, companies are

searching in many more places - 78% of CEOs say their

business always uses multiple channels to recruit, while 71% say

they actively search for talent in different geographies, industries

and demographic segments. Nurturing adaptable talent is also

important: 81% of CEOs say that their business always looks to

equip employees with new skills.

Cont…Key findings

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There’s still a great deal of work to be done. Companies are going to require people who are different across dimensions like gender, age and race, as well as those who are in different situations in life, those with different experiences and perspectives. Three in ten CEOs say their organisations don’t have a strategy to promote diversity and inclusiveness, though 13% say there are plans to adopt one. Yet formal strategies can help to broaden the mix of talent; CEOs who do have such strategies in place are more likely than those who don’t to hire in different markets, industries and demographic segments, use different recruitment channels, search for a wider range of skills, and equip employees with new skills.

Cont…Key findings

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Growth & key findings

Just not in the areas you might imagine

Many CEOs this year are looking for the positives even as

they continue to be wary about the state of the global

economy. 61% say they see more opportunities for growth today

than there were three years ago. And just as many CEOs this

year as last year say they’re very confident about their business

growth prospects in the next 12 months. This, despite rising

concerns across a range of business risks, and recognition from

many that their industries face upheaval. Instead, CEOs are

exploring how they can create new value in a complex and

contradictory environment.

Cont…Key findings

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That’s a smart strategy when you take into account the

global uncertainty about where economic growth will come

from. CEOs are less hopeful than they were a year ago about

global economic growth prospects. 37% think the outlook will

improve over the next 12 months, compared with 44% last year.

17%—more than twice as many as last year—think the outlook

will worsen(1). The challenge CEOs face is anticipating which

markets offer the best opportunity for growth at a time when the

global business community is still looking to gets its swagger

back.

Cont…Key findings

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Regulation fears keep CEOs awake at night, but so do many

other concerns. 78% cite over-regulation as the top threat to

business growth prospects. That’s an increase of 6% from last

year. Rising taxes, as well as government response to national

deficits and debt burdens, also remain top threats. But concerns

are coming from a variety of other places – many, for example,

are anxious about geopolitical uncertainty and social instability.

Though CEOs are displaying increased concern about almost all

the threats we raised, cyber security, the speed of technological

change and the availability of key skills are getting special

attention. And business leaders see regulatory change,

increased competition and changes in customer behaviours as

the top-three disruptive forces in their industry over the next five

years.

Cont…Key findings

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New Business Sustainability Solution

– Umbrella Activity

Part – B is input to Part-A

Social Networking and/or Information Technology can collect market responses via Market Surveys which in turn clears market needs.

Market Strategies can be build upon market needs and can feed requirement to Part-A i.e. Manufacturing /Production.

Production manufactures “Product” as per needs and launches product in market.

Customer satisfaction /feedback can be utilized to stable/improve product for further market launch.

Customer feedback can prove as an opportunity or threat to industry.

Why to focus Part-B ?

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Customer feedback, Market needs as well as social market can prove as the best feed for Part-A

Core Customer feedbacks domains are: Design, Performance, Economic Factors, Business requirements and optimum utilization of facilities.

I.T. Department can use data mining to identify current technology trends based on customer expectation.

Administration can prove as a bridge between I.T. Infrastructure and management.

Management with consent of CEO can improve production plan, technological needs, change in design or performance upgradation brainstorms.

This Part-A we can say as a key deliverable portion of an industry.

What can be role of Part-A ?

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Demographic Influence

Economic Power Up & Downs

Focusing Urbanization

Environmental Impact and Sustainability Ratio

Technological Shifts and Solutions

What Is New Global Business Sustainable Strategy-

Client Cluster Management - DEFET?

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Client Cluster Management Requirem

ents

D E F E T

Automotive

Type

Low High High High High

Automotive

Production

Cost

Low High Low Low High

Automotive

End User

Cost

Low Low High High High

Profit Ratio Low Low High High High

Market

Cluster

High High Low Low Low

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From previous table data, we can say that many people focused over Automotive production, CRM, SCM but this study presented new elements with a different sustainable thought process.

Client cluster management (CCM) needs more focus over DEFET factors. As per explanation of Part-A & Part-B, we can say that, “Know our Client Cluster” and “Lets Manage it”. After all, customer is a key for business. It is always better to remark cluster considering “DEFET” and initiate “Production”.

Moreover, “Profit Ratio” can be directly proportional to “Client Cluster” but it is inversely proportional to “Production Cost”.

Low cost vehicle +good technical facilities=More customers

High production cost + low profit +low end user cost=More customers.

Conclusion

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Hence, it is ultimate optimum solution that keeping profit ratio

less and making client cluster huge definitely prove profitable to

Automotive industry.

Use of I.T. technology is base for Client Cluster Management.

This will enable Automotive industry to reach client hub easily.

Production will live till Customer segment is alive.

Customer expectations may drive industry in more sustainable

way. Ex: Now customers expecting electric vehicle with

moderate size. So, it’s challenge for automotive designers to

design green, economically sustaining and cost effective vehicle

for common person.

Cont…

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