Home Tech | Little Wonders | Home Base | In Focus | Reminder 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

My name :

Hoshang
Nariman Khumbatta

 

Khumbatta
 


My qualifications: B.E. Mechanical (Honours), University of Mumbai; MBA (Honours), University of Mumbai.

I head: The Material Handling Equipment Division.

I deal with (products): Forklift Trucks (Diesel, Electric and LPG) from 1.0 tonne to 16.0 tonne capacity, Warehousing Equipment and Access Equipment.

We are also all-India distributors for Crown, the world’s number one in Warehousing Equipment, and Genie of USA, who make Access Equipment. We have recently taken up the dealership of Manitou (France), the world’s largest maker of Rough Terrain Handling Equipment. This is a relatively new field in India and has good potential as the construction and infrastructure industry enjoys good growth.

Our Service business has always been a good revenue generator and we have expanded our offerings here too by offering Refurbished Used Equipment and trade-in schemes besides a variety of Maintenance Contracts.

My Division’s marketing techniques: We have excellent reach in the domestic market with a big basket of product offerings to satisfy a variety of customer material handling needs. We are aggressive and agile in the field, and are focused and goal-oriented.

We use a combination of direct sales engineers at the Branches and dealers for Warehousing Equipment and Service Providers.

Its sales turnover: Rs. 7,400 lakhs in 2003-2004.

The export turnover: In the year 2003-2004, we reached an export turnover of Rs. 900 lakhs, which was 12.16 per cent of our total sales turnover. For 2004-2005, we have projected an export turnover of Rs. 1,200 lakhs which is 14 per cent of our total sales turnover.

We export our products to: Our main market is the Middle East region, which includes Dubai, Saudi Arabia, Oman, Bahrain, Iran, Iraq, Kuwait, Qatar, Syria, etc.

Africa has begun yielding business, and we have a presence in Egypt, Kenya, Sudan, Nigeria, the Democratic Republic of Congo (Kinshasa). Several more African markets are being opened up. Sri Lanka is also an important market for us.

Our competitors: Voltas, Tractors India Limited, Punjab Tractors Limited and Macneill. However, in India, we lead the pack with a 57 per cent market share and a 2:1 lead over the next competitor. The rest make up about 15 to 20 per cent of the market.

In the international market, we fight world-renowned makes like Caterpillar and Hyster from the USA, Linde, Yale, Boss, Stil and Jungheinrich from Europe, Toyota, Mitsubishi, TCM and Komatsu from Japan, and Daewoo from Korea.

My Division’s goals for 2004-2005:

Net Business Volume
Profit Before Tax
Average Net Working Capital Blockage
Working Capital Turns

:
:
:
:

Rs. 8,700 lakhs
Rs. 154 lakhs
Rs. 1,450 lakhs
6 Turns

My personal goals for 2004-2005: To make the MHE Division a viable and vibrant Division in the Company, and ensure a dominant market share of 57 per cent in the domestic market and 5 per cent market share in chosen foreign markets.

My strengths and weaknesses:

STRENGTHS: Good team player, delegation and empowerment, communication, empathy, integrity and perseverance.

WEAKNESSES: Impatient, hard taskmaster.

My family background: I come from a priestly family. Wife Meher was working earlier. She retired eight years ago. Daughter Khushnuma completed her MBA, and is working as Assistant Manager in the Furniture and Interiors Group of Godrej & Boyce Mfg. Co. Ltd.

My first crush: My wife Meher.

My hobbies: Music and interest in antiques.

My pets: I love to keep pets and had a Cocker Spaniel as a pet.

My favourite books: “Critical Chain?by Eliyahu M. Goldratt, “Management By Values?by S. K. Chakraborty, “It’s Not Luck?by Eliyahu M. Goldratt, “Principle-Centered Leadership?by Stephen R. Covey, and “Workplace Management?by Taiichi Ohno.

My most embarrassing moment: At the end of a late-night show, to be woken by the usher and informed that the movie is over and I should now go home.

I am content with: How life has turned out for me and my family, and I thank God Almighty for that.

I am jealous of: Nobody.

I get upset when: Commitments are not adhered to and my trust is belied.

I fear: Causing hurt to people.

I am proud of: My parents for my upbringing and the value systems instilled in me. I am also proud of my wife and daughter for their unsolicited support and love, always.

My retirement plans: To try and give back to the community and society, which has supported me throughout, by doing social and community work and to help the poor and less fortunate.

The future of Godrej: Godrej is an institution which has stood for a hundred years and will stand for the next hundred years with its high value systems, work culture and a highly committed workforce.

I love India because: I am proud to be an Indian. I am fortunate to be born in a country that has a very rich cultural background from which many lessons can be drawn to live a good and a righteous life.



 

It was his first day as Vice President and Business Head of the Material Handling Equipment (MHE) Division in May 2001. The new range of GX Series Forklift Trucks had been newly introduced and there were a lot of teething problems to be attended to. The Design Head was in hospital and had
not attended the office for over three months. The Design team felt fatherless?
The situation was precarious, sales were down and employee morale was low. The relationship with workers was tense and strained. The product was difficult to sell in a stagnant domestic market. But the man who had faced major challenges as Vice President and Business Head of the Storwel Division was not going to be deterred. The challenge facing the Division was to create a well-knit team
and to get the business on an even keel.
Every day, at 9 a.m. sharp, the heads of the Design, Marketing, Sales, Materials, Production and Service Departments of the MHE would meet to thrash out issues with complete freedom to speak their minds and lighten their hearts. A quick 45-minute review to plan a perfect day.
By the end of the first year the bottom line had risen from a negative Rs. 10 crores to a negative Rs. 3 crores. Morale boosted, no stone was left unturned. The next year MHE’s top line grew by 35 per cent and the Division increased the domestic market share to 49 per cent. The year 2003-2004 saw consolidation of the work done in the previous two years. A business line that barely produced 30-odd Forklifts a month, despatched 106 Forklifts in February 2004. In India, the MHE has increased its market share to more than 55 per cent,
thus maintaining its dominant position.
Meet the man behind these achievements: Hoshang Nariman Khumbatta,
 the Head of the Material Handling Equipment Division.

 

 

 

The Turnaround Man:
Building Bridges Between Customers and Suppliers


Interviewed by Rashna Ardesher

 
Ch. Has there been any change in your professional life from the Storwel days to the MHE days? Which did you prefer?

HNK. It was challenging all the way. When I was young, I had to travel a lot. Selling gave me exposure and insight into building relationships with customers. At the Plant level, I’ve had good experience in dealing with the workforce, building a team. The guidance of a superior like our Director, P.D. Lam, has been an added advantage. He has given me complete operative freedom. Each assignment helped me hone my skills to meet the challenges of the time.

Ch. What has been your style of functioning in dealing with employees at various levels?

HNK. With the workers I am firm and exacting. I also empathise with them, understand their problems and try to mitigate them; generally, take on a mentor’s role. But my expectations on the work front are never diluted come what may, else it can have a snowballing effect.

I delegate work to my staff and managers. I meet them daily to keep a check on the production and the despatch plans. Being a hands-on person, I spend time on the shop floor every day to see the progress of the plans being implemented and support the team to meet the business objectives. I know exactly who is handling which project.

We have kept ourselves focused and have increased our business volume to over three times what it used to be. Consultant Marc Fourcard’s philosophy of Partnership 2000 has been of tremendous help to align all our energies. Everybody’s key result areas and goals are dovetailed to the business goal.

Ch. Godrej is a pioneer in manufacturing Indian Forklift Trucks. The aim of Naval Godrej at that time was to fulfil our own needs, a matter of convenience for workers who could not lift heavy loads in the process of building Pirojshanagar. What is the aim now behind manufacturing them? Has that vision expanded?

HNK. Yes, but Seth Naoroji Godrej had soon realised that manufacturing Forklift Trucks could be made a commercial venture. There was no manufacturer of this equipment in India, customs duties were high at that time and imports were expensive. Knowing that India’s industries would grow and need Material Handling Equipment, he entered into a technical collaboration with Clark of USA, then the world’s number one Forklift Trucks.

Our strategic goal for the business is to be a dominant player in the domestic market. Our market share has moved up from 34 per cent to 57 per cent in just three years?time. We want to carve out a 5 per cent market share in the chosen international markets.

Ch. Have you made any additions to the product range since becoming Business Head of the MHE? Have you further improved the quality of our products?

HNK. Let me put the MHE business in a time perspective for better clarity and understanding of the situation.

With the launch of the new GX Series Diesel and Electric Forklift Trucks in the year 2001-2002, coupled with our reach in Service set-up, we quickly wrested the market share from our competitors.

In the next financial year, in order to grow in a stagnant domestic market, we developed the Fluid Coupling to attack Voltas’s stronghold and, with our superior product offering in the Electric range (from 1.0 to 3.0 tonne), we focused our attention on Macneill’s market to grab the market share.

During this time we also developed special-purpose Forklift Trucks (the Tyre Handler Range), which enabled us to do business in a new market niche.

With a stabilised new range of Diesel Forklift Trucks, we also moved into new international markets and started establishing ourselves in the export markets.

In 2003-2004, the market offered a new opportunity for growth to the MHE Division and we quickly shifted gears and moved into the Warehousing Equipment Market.

Till 2002-2003, we were only trading in Warehousing Equipment and dealing with Crown as our principal, and marketed their range in the domestic market. To address the changing market scenario, we evolved our strategy and started to manufacture the Middle Range of Warehousing Equipment that is Powered Pallet Trucks, Semi Electric and Fully Electric Stackers at our Plant, whilst continuing to trade in Hand Pallet Trucks (Lower Range) and also in Reach Trucks/Order Pickers, etc. (High Range) of Warehousing Equipment with Crown Products.

It is fortunate that the Warehousing domestic market is also growing rapidly and we believe that the Warehousing business will be the engine for growth in the year 2004-2005 for our business in the domestic market.

To answer the second part of your question regarding quality, we have very stringent quality control norms. Over 90 per cent of our products are despatched only after they are inspected by the customer’s inspecting agencies. This is especially true for exports. We ensure the quality of the Forklift Trucks despatched. Our Designers also continuously address the feedback from the field and work towards improving quality and reliability.

Our customers also contribute to product improvement. The Times of India group is one of our largest customers for Forklifts with a hydraulic clamp attachment for handling heavy paper rolls. They recently asked us if we could increase the speed of clamp operation. Using a larger hydraulic pump and making allied changes, the speed was increased by 65 per cent. This advance, developed for one customer, now benefits many others too.

Ch. You have improved the Marketing of MHE products considerably. Is this the only plus point that has made a loss-making Division into a profit-making one?

HNK. My first goal was to increase our reach in the marketplace. To sell this product, team support is very essential. After developing a strong team, we became aggressive in the marketplace. I saw to it that my soldiers (Sales Engineers) in the field are not let down in terms of quality, delivery and new product offerings to enable them to fight the competition. We didn’t allow a single order to slip out of our hands. In a near stagnant market, we snatched orders out of our competitors?hands!

New product offerings like the Fluid Coupling Transmission and High-end Electric Forklifts have helped us eat into the market share of our main competitor, Voltas, and another manufacturer, Macneill.

From selling barely 30 Forklifts per month three years ago, today we sell 75 Forklifts per month.

Coming to what has turned the business around, it is teamwork, energy and enthusiasm for our work. The very fact that orders flow in every month at the volumes we want, raises everyone’s energy level. Everyone comes together as a team to work towards one goal - profitable growth.

Ch. Godrej is the only Forklift manufacturer in India to manufacture its own Automatic Transmissions. What are Automatic Transmissions? What is so special about our Automatic Transmissions that other Indian manufacturers cannot manufacture themselves?

HNK. A Forklift’s Automatic Transmission is similar to that used in luxury cars. It allows you to change the speed or direction of travel without having to press a clutch pedal. This relieves the physical effort required from the Forklift driver and allows him to focus on safely handling the load being carried. Automatic Transmission thus increases the productivity of man and machine.

The late Naoroji Godrej’s foresight that Automatic Transmissions would be the norm in the future, and his ideology of bringing the best technology for India, made Godrej opt for the advanced system. The manufacturing of Automatic Transmissions also involves a higher level of investment and the system itself is more complex and expensive to manufacture.

Khumbatta bw
 

The late Naoroji Godrej’s foresight that Automatic Transmissions would be the norm in the future, and his ideology of bringing the best technology for India, made Godrej opt for the advanced system. The manufacturing of Automatic Transmissions also involves a higher level of investment and the system itself is more complex and expensive to manufacture.

 Ch. What about deliveries and the pricing of MHE products?

HNK. I believe very strongly in the “Throughput Concept? Every production order has to be completed in the shortest possible time and the product made available for despatch at the earliest. This philosophy has been ingrained down the hierarchy at all levels.

During one of the Business Reviews, the “Quick Ship Concept?was mooted by our Chairman and Managing Director Jamshyd Godrej, which would enable the business to grab the initiative in the marketplace. This has paid handsome dividends. We’re able to respond rapidly to the market’s needs. Earlier, we produced Forklifts in batches. There would be either Diesel Forklifts on the line or Electric models. Today, we make all the models the market wants in parallel - with reduced manpower and space, thus meeting the higher customer expectations.

As far as product prices are concerned, they are determined by market forces. Every unavoidable rise in input cost is met with an energetic effort to curtail costs elsewhere so that overall competitiveness is maintained. Input costs remaining similar for all competitors, winning depends on cost-effective design, agile sourcing, smart working capital management and high productivity. Thanks to our consultant Takaosan Kasahara, we have made very good progress in improving productivity and, to a large extent, reducing the bottlenecks in our manufacturing operations.

We have tight working capital norms. The Forklift Truck business runs on thin margins and has to remain extremely alert and agile to survive and grow.

Ch. Supposing a customer asks for a particular engine, say, of TELCO, what do you do if you don’t have it?

HNK. We always plan in advance and are in close touch with all our suppliers. Our relationships with them are strong. We can count on them. We ask them to carry inventories on our behalf and assure them of a certain amount of business. On their part, if they anticipate any shortfalls in deliveries, they intimate us well in advance so that we can alert our Sales force and take suitable correctives to avoid any unpleasant surprises.

We do a lot of global sourcing on a regular basis in our line of business as nearly 40 per cent of the components of Forklift Trucks are outsourced. For instance, in December 2003, when steel prices shot up in the domestic market, we imported steel sections from Germany. It was more cost effective than locally rolled steel. International sourcing has to be done on a continuous basis. We were buying steel from Germany a few years ago. Then we developed indigenous sources in India. Again, when prices skyrocketed here, we went back to Germany. You have to keep a good mix of suppliers here and abroad. We cannot burn our bridges either with our customers or with our suppliers.

Ch. Generally, how do Godrej MHE products compare with foreign ones?

HNK. There is a difference between our products and the foreign ones in terms of technology, features, aesthetics and functionality. International manufacturers such as Toyota and Linde each manufacture approximately 45,000 units annually. They have the reach and the expertise that we lack. Since they use advanced manufacturing techniques such as laser cutting of steel plates and robotic welding, their throughput is very high. They also have a vast, worldwide network for sales and service.

However, their Forklifts are expensive, whereas our products, though they may not be comparable on a one-to-one basis, still have most of the features customers look for. With our competitive prices, we are a good value-for-money proposition.

Khumbatta

Ch. Who are MHE’s clients?

HNK. Our clients come from almost all sectors of industry. Our customers include the Indian Railways, the Indian Armed Forces, companies from the newspaper, steel, airline, automotive, white goods, bottling, transport and logistics services, chemicals, oil and petroleum, and heavy engineering industries.

Ch. Please tell us about MHE’s scheme for training Engineers and Mechanics, and providing other services to clients.

HNK. Training is very crucial for this product. The equipment being mobile, and handling loads that are essentially unsecured to the machine, the safety of the equipment, operator, property and other people in the area of operations is paramount.

We have a Training Officer dedicated to the task of providing Operator and Maintenance training. Special in-house training programmes are conducted for Mechanics and Drivers of our customers as well as the new Sales and Service staff we recruit.

Coming to the other services we offer, we provide Overhauling and Refurbishing services and also sell Pre-owned Forklifts. We have a dedicated facility in our Plant, which refurbishes Forklifts, carries out upgrades like fitting new engines, masts and steering systems, etc.

We support Forklift fleet owners by covering their Forklifts under Annual or Comprehensive Maintenance Contracts. We ensure 90 per cent uptime of their Forklifts. These additional services have helped boost our Annual Service Revenue from Rs. 10 crores a few years ago to Rs. 18 crores targeted this year. It’s a profitable business.

Khumbatta
 

We will be solidly placed in the domestic market five years from now. In spite of import tariffs coming down, with a strong product offering supported by an excellent Sales and Service network, we will certainly make it difficult for large players to find the Indian market attractive.

Ch. Where do you see the MHE Division five years from now? What are your strategies for future growth?

HNK. We will be solidly placed in the domestic market five years from now. In spite of import tariffs coming down, with a strong product offering supported by an excellent Sales and Service network, we will certainly make it difficult for large players to find the Indian market attractive. Even today, some foreign makes find Godrej a strong competitor in India. We have an excellent brand, market reach and Service set-up. We regularly offer new options, designs and products. We are confident of maintaining our position of dominance in the domestic market.

Staying close to customers and continuously addressing their needs is important for future growth. In export markets we can’t fight a volume game with international players, but we can still create a niche for ourselves, especially in developing economies and markets closer to India.

Ch. What is the driving force that made you climb the corporate ladder from an engineer working on the shop floor to becoming Vice President and Business Head of the Material Handling Equipment Division?

HNK. I was a student of Don Bosco High School. The headmaster of the Junior School was an Italian Catholic priest, Father Gatti. He once told us, aim for “excelsior?(he meant, “excellence?; doesn’t matter even if you fall flat on your face. I remember him even today and have always given my best shot. Father Gatti has been my role model and my source of inspiration.

Ch. You say you are very content with how life has turned out for you and your family. Had it not been for Godrej, how do you think your life would have been?

HNK. I really don’t know! After completing my college studies, this was my first job. This has been my life for the last 37 years. I thank God Almighty for His blessings.