PM Daylights - 3

Daily view through the eyes of a project manager

LOOKING AHEAD: 2 Organizations do it, an Indian Public sector and a Multi National Organization.
One public sector company in India that seems to have looked ahead on the energy demand in the country is BHEL. It has expanded its own power plant equipment manufacturing capacity ready to face challenges from competitors for a target of around 15000 MW of plant equipment annually.
What is it doing differently?
1. They have promoted vendor development, focussing on adding 700 vendors across various products over the last year. This ensures adequate vendor support for manufacturing.
2. They have focussed on reducing import dependence by upgraded casting and forgings plants.
What are the challenges faced and possible solutions to them?
1. Presence of multiple partners on projects means that project responsibilities have to be synchronized well. BHEL focuses on main plant equipment but there are host of other partners involved in engineering, procurement, construction.
Solution: Increasing visibility on the responsibilities of individual partners
2. Mobilising people for projects is a challenge for the contractors.
Solution: Adding about 4000 people a year on own initiative, to reduce constraints
3. Moving into new areas in the power sector like Nuclear energy without having own expertise
Solution:A possible tripartite joint venture with an overseas partner and Nuclear Power Corporation.

A pharma MNC, Merck, with global revenues of over $25 billion and a global R&D budget of around 21% of revenue, is looking ahead to grow in India. This can possibly contribute in reducing the R&D budget spend.
Why India is suited to the overall plans of Merck?
1. Indian market is part of the top5 markets of the company. Growth for Merck is likely to come from cost conscious or price sensitive markets.
2. Indian companies are good at process innovation, with reverse engineering and continuous cost reduction expertise. Indian IT expertise is available close at hand for further support to research. This model can help pharma companies in other countries too, provided the model is spread through partnerships.
3. Make medicines accessible is a goal that Merck is pursuing that can benefit emerging market societies. This is likely to be a differentiator provided the doctors stick to a strong code of ethics and prescribe what is best for the patient. Merck has a stand of not offering incentives to doctors to prescribe medicines.

(Source: Economic Times 28/03/2010)