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Management of Technology and Textile Industry* Professor Shekhar Chaudhuri Director, IIM Calcutta *Talk given at International Conference on Steering Mature.

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Presentation on theme: "Management of Technology and Textile Industry* Professor Shekhar Chaudhuri Director, IIM Calcutta *Talk given at International Conference on Steering Mature."— Presentation transcript:

1 Management of Technology and Textile Industry* Professor Shekhar Chaudhuri Director, IIM Calcutta *Talk given at International Conference on Steering Mature Business: A leadership challenge to the Textile Industry, organized by Ahmedabad Management Association in collaboration with fibre2fashion at Ahmedabad Management Association, Ahmedabad during October 3-4, 2009.

2 Role of Technology in the Dynamics of Competition  For decades after World War II, America reigned as the world’s technological super power. However, all that changed with Japan and Europe making inroads into once US strongholds.  Initially the US faced a stiff challenge in capital intensive, heavy manufacturing industries such as steel, authomobiles and consumer electronics. Gradually Japan and Europe broadened their attack to include all aspects of electronics, including semi-conductors and aero- space and tele-communications.  These developments point to the critical role of technology in relatively high-tech industries that are characterized by large expenditures on R&D, rapid technological change and considerable technological uncertainty.

3 What is Management of Technology ? Modern technology plays a significant role in the development and the competitive positioning of firms in a variety of industries including engineering, financial services, logistics, publishing and others, where technology has become the decisive competitive edge. Technological innovation is becoming increasingly crucial for sustained economic growth, value creation and employment generation. Hence the need for managers and organization leaders to understand, manage and steer the complex processes that lead to the introduction of new products and services. MoT is concerned with exploring and understanding technology as a corporate resource that determines both the strategic and operational capabilities of the firm in designing and developing products and services for maximum customer satisfaction, corporate productivity, profitability and competitiveness.

4 Technology Management: A Strategic View.  Technological strategy is an important but often ignored link in the corporate strategy formulation process. It deals with choices in technology, product design and development, sources of technology and R&D management and funding.  Fundamental strategic questions that need to be answered by corporate strategists are : 1) Which technologies should be the basis of our business? 2) In which technologies should we aim to acquire leadership? What distinctive technological competencies does our business require? 3) What criteria or guidelines should we use to design our products in the light of technological changes taking place in industry? 4) From where should we obtain the required technology? 5) What should be our R&D strategy? 6) Which technologies should we purchase? 7) How should we organise and manage technology and innovation? 8) Where and when should the technology be introduced to the market?

5 Is Management of Technology Relevant in the Textile Industry?  Management of technology is a critical function of top management in high-tech firms but it is also an important function in firms in a mature industry like Textiles.  Let us consider a few technological developments and trends in the textile industry : a) Technical textiles are used in (i) medicine (sutures and implants), (ii) aerospace (constructing light weight yet strong fuselages) and (iii) defence (bullet proof and camouflages). Technical textiles are also used by all of us, daily, hidden in our car tyres and baby diapers. Today India has a small share in the world market which can be expanded. Growth in this market would require firms to grapple with technology related issues in a strategic manner. b) Technical change is taking place in traditional areas also. The following examples illustrate this :

6 Is Management of Technology Relevant in the Textile Industry? (contd.) Latest models of combers are able to run at higher speeds than before due to better manipulation of comber technology, kinematics and air control. Rieter has developed computer programmes for optimising the combing process resulting in higher efficiency and productivity of the machines and increasing average time between two unscheduled stoppages. (Mean Time Between Assists). Trutzscler has redesigned the comber frame and optimised the kinematics leading to lower energy consumption and use of magnesium- aluminium alloys for making nippers has reduced vibrations and noise level. c) Non-technology has the potential to revolutionize the industry. Nano technology is the technology of manipulating particles at the molecular level that can enhance the performance of a fabric without compromising its original properties – durability, softness, flexibility, etc. It can result in a fabric that repels dirt, stain or water and even fabric that are self-cleaning, that resist radiation and chemical damage, or that kill germs and prevent spread of diseases. Incorporating such a technology into a company’s products would require its strategist to explore and understand its implications on its business strategy and organization. These three illustrations of technological changes point to the need for strategists to manage technology as a strategic resource for achieving competitive advantage.

7 Examples of Firms in the Textile Industry that consider Technology as a Competitive Weapon. Raymond Group It is one of the world’s largest producers of worsted suiting fabrics. It also converts these fabrics into clothing that is exported to more than 50 countries including European Union, Japan and Australia among others. It has a R&D department that has contributed to its efforts to be a trend setter in the Indian textile market. Arvind Limited Arvind is one of the leading firms in the Indian textile industry with a history of commitment to excellence, innovation and attention to customer needs. It produces a variety of products for the domestic market as well as international customers. One of its very important products is denim. Arvind, with an annual capacity of 110 million meters it is currently the third largest producer in the world. It exports denim to 70 countries. It has a strong R&D department with a focus on process improvement, cost reduction and new product development. The company continuously modifies its production process to enhance flexibility on the use of various types and quality of cotton. It has also introduced a new dyeing and processing method for denims.

8 Examples of Firms in the Textile Industry that consider Technology as a Competitive Weapon. (contd.) Vardhman Group The Group is today a leading textile conglomerate in India that had a small beginning in Its mission statement says it aims to be a world class textile organization producing a diverse range of products for the global textile market with the objective of achieving customer delight through excellence in manufacturing and customer service based on creative combination of state-of-the art technology and human resources. The Group produces a variety of yarn for leading customers in India and international markets. It is one of India’s largest exporters of cotton yarn to the quality conscious markets like EU and USA. Vardhman is also one of the few fully integrated fabric suppliers in the country and a leading player in the Indian sewing thread market.

9 Some Concluding Remarks  The examples of the three leading firms in the industry have illustrated the benefits of managing technology as a source of competitive advantage.  Even though the industry is old and mature there is considerable scope for technological change. Those firms which understand the nature of these changes better and are able to incorporate them in their business strategies keeping in mind the needs of customers are like to achieve superior performance.  Firms need to develop their technological strategies consistent with their vision and mission while making use of all internal as well as external resources in a creative way.  The Indian textile industry is characterized by the presence of a large number of firms, mostly small and technologically backward and some fairly large and technologically dynamic. Most firms spend negligible amounts on R&D and technical training.

10 Some Concluding Remarks (contd.) Cooperative research associations in the country are dominantly used for testing; operational problem solving/trouble shooting, and education/training. Little product development and process development work is done by these institutions for companies. To improve the technological status of the industry strengthening of the relationship between the firms and the technology institutions would be necessary. The relationship must move to a higher level to encompass new product and process development.  The technology institutions serving the industry may be encouraged to provide training in Management of Technology to improve the perspective and skills of senior managers of textile firms.

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