United they stand
It’s often heard in industry circles that it matters little whether companies are big or small. What matters is whether they grow. Progress often tends to come from high-growth companies. Some of the best companies can take a good idea and use it to transform themselves. United Technologies Corporation (UTC) India is one such company that has used innovation as an opportunity to transform itself. And Zubin Irani, president, UTC Building & Industrial Systems (India), the man leading the company, says, “Innovation is in our DNA. Our founders were also inventors who set up their own companies. Although we are a global company we are taking a cue from this and innovating products that are unique to the India market.”
Irani with his core team comprising Sebi Joseph, managing director, Otis India, and Gaurang Pandya, managing director, UTC Climate, Controls & Security, India region, bring tremendous scale and know-how to the customer when it comes to building technologies. Last year, the company reorganised themselves to be UTC Building & Industrial Systems which is one business unit comprising Carrier air conditioning, Otis Elevators, Fire & Security, and Building Automation. UTC India has drawn up five major initiatives but its priority is to be closer to the customer. Here the national key accounts team, under Sanjeev Yadav, director, key accounts & strategy, will act as a single face to the customer, mainly the key customers, thus giving them the advantage of the best of businesses. What matters is listening to the customers and understanding their requirements.
Yadav says, “Key accounts as a concept is not new to India. We always focused on our large accounts since this office was created in India in 2010. Considering that most of our businesses end up approaching the same customer, it makes sense to approach the customer as a single entity.”
UTC Building & Industrial Systems then moved quickly. In order to make the synergy work, the company moved its sales persons within a geography to a single office in 13 locations. This enables sales personnel of (mainly) Carrier and Otis to share leads and there’s a cohabitant approach when meeting a customer. The high point of the restructuring was when the company won two major contracts last year: Hyderabad Metro Rail, and DMRC.
The company has also executed a large scale contract for the Mumbai International Airport (T2) through installing 2,500 cameras and 650 access control systems at the airport.
Joseph of Otis Elevators, says, “Seeing the customer from close quarters made us more nimble and quick-footed. Our decentralisation approach empowered our people in various regions to make quick decisions.”
Pandya of UTC Climate, Controls & Security, says, “From a leadership perspective it’s necessary to understand how each company functions. Our 25 years experience gives us the confidence to leverage each others’ strengths in terms of people and resources. When we conduct meetings and reviews, we do them together.”
The company realised the enormity of its decision when it began adding the numbers. “The overlap in certain segments could be up to 20%, but in certain areas like applications it could go as high as 80%. When we see the overlap is lower, it could be an opportunity for us to share leads and understand the new projects coming up,” says Pandya.
Internally, UTC Building & Industrial Systems has aggressively adopted a backbone process called ACE (Achieving Competitive Excellence), which looks at acquiring continuous customer feedback. It helps them keep track of progress in terms of maintaining lead time, quality, and ways to better the experience for the customer.
For any company to function superlatively in today’s bare-knuckle competition, lead times are crucial and any lapses could lead to serious tripwires in the system. Reducing lead time for a multinational behemoth can truly come when products and solutions are local. Irani firmly believes that localisation must be structured in such a way so as to satisfy all demands.
In the case of Otis Elevators, UTC India reorganised the business from being a business unit focused organisation to a geographic one. Installing dedicated leaders at the regional level and moving further down to the micro level, it gave them authority to respond to customer needs. Since recurring revenue in this sector are realised mainly from maintenance, Otis fortified its service capabilities and currently operates 80 service centres that reach out to more than 300 cities.
Citing an example, Irani says that the company has localised a number of products for elevators and the entire Gen2 range. “Now we manufacture up to 1.75 metres per second in our Bengaluru facility. And we are going for higher speeds.”
For Carrier, the company has incorporated as many local components in its air-cooled and water-cooled screw chillers and cassette product. In that respect, the company has made up its mind to add more local components in the near future. A company whose various components are segued to achieve such a high degree of performance needs to be supported by a flawless and flexible system. The belief to use local products has its own powerful advocates among customers and service personnel, alike. A major benefit is the reduction in costs that could be to the tune of 10-15%. “We can shrink the lead response time from three months to one. We can deliver products that are relevant to our customers and to India as requirements here are different. Products need to be designed for India keeping in mind our power conditions and logistics methods,” says Irani.
There are three things that UTC Building & Industrial Systems is looking at: Localise products, localise design and technology, and finally improve quality. Pandya says, “Customers demand quality and we don’t want to disappoint them.”
UTC Building & Industrial Systems operates two manufacturing and one R&D centre – one in Gurgaon where mechanical engineering for HVAC is carried out and the focus is on localising and developing products. The second centre, Otis Elevators in Bengaluru, which again has a strong focus on localisation. The company using its global Gen2 technology has begun customising the same for India. The third facility, which is its largest, is in Hyderabad where customising for fire and security and building automation is carried out. The Hyderabad facility is focused on software and also acts as a global global centre of excellence.
Realising the vagaries of demand in the market and its dynamic state, there is a third prime focus that the Building & Industrial Systems division has set its eyes on — the move from products to solutions. This is where AdvanTE3C steps in. Conceptualised six years ago, the AdvanTE3C solution centre is a natural evolution of Carrier’s approach to sustainability; it supports customers around the world in developing strategic, energy-efficient and custom-engineered building solutions.
“Traditionally, a customer’s way of buying and the way we served them was highly product-oriented. This is now passé. Our products offer a certain level of efficiency and the customer may buy it but if it’s not applied properly in the building within the given environment it will not give the desired results,” says Pandya.
The AdvanTE3C team provides solutions that are unique to each building application. Considering that no two buildings will have similar requirements, there is much to be looked at here and hone skills. Earlier AdvanTE3C was mainly confined to Carrier. But a meticulous focus on integration of technology meant carrying its implication across the Building & Industrial Systems division.
Technology and the swift development of infrastructure are expected to provide a plethora of opportunities for energy-efficient solutions. “We are strongly looking at conducting more energy audits in existing buildings and recommend improvements that can be made. So far, we have done close to 80 audits for different customers and in each case realised that we could help them with 20-40% energy savings with paybacks of one to three years.”
Urbanisation, supported by the development of smart cities, will see an increased need for housing and infrastructure, and here is where Otis hopes to capitalise. Industry reports say that the Indian segment for elevators is expected to grow to 70,000 units per year by 2017. Anticipating a surge in demand, UTC India has doubled the production capacity at its Bengaluru factory and installed the highest functioning test tower. Joseph says, “Otis’ Gen2, while geared toward efficiency, offers features designed to increase the elevator’s lifespan, efficiency, safety and reliability. Key components include the coated steel belt, ReGen drive, permanent magnet machine and PULSE system.”
One point that UTC India has always stressed on constantly is the lack of a national regulatory body that defines safety standards. Industry bodies like the Bureau of Indian Standards are trying to change this. Awareness of the masses is also crucial. For instance, Otis actively works with Elevator Escalator Safety Foundation (EESF) to conduct workshops on elevator safety in schools, housing societies and corporations.
What excites UTC India most now is the government’s announcement to set up 100 smart cities. The driving factor here is urbanisation. Reports say that there are approximately 10 million people moving from villages to cities each year which leaves the government with the dilemma of creating housing and developing infrastructure. “I think the right question to ask is how we are going to accomplish building these cities in terms of making them sustainable. Even if 50% of the 100 cities are rolled out, it would be a great achievement,” says Irani.
According to a study by The Energy and Resources Institute (TERI), a policy research organisation, buildings account for 35% of the overall energy consumption. Irani is well aware that a number of these smart cities are going to be retrofits. UTC recently signed an MoU with TERI to create a centre for ways to improve energy efficiency of existing buildings in India. This combined mission with funds from both sides is going to combine the technology that UTC brings with the strong delivery capability of TERI.
Dr Prem Jain, chairman, IGBC, says, “UTC has a large range of products and equipment from air-conditioning and elevators to BMS and security. Existing buildings lack this. UTC can help the customer save money by making these buildings green.”
However, the best-laid plans need manpower to execute it. By investing ahead of the cycle, UTC has upped the ante. At a time when the country was going through a downturn, the company invested in expanding its Gurgaon facility. The engineering division has doubled the head count across all three division.
The skillsets also extend to moving talent and in the last six months alone, the company has moved close to 20 senior talent around across businesses. “I think we can be successful if we
can make our people successful. Now we have three businesses under one roof. If you look at our focus then bringing in more energy efficient products is main.”
Irani says with pride, “My main role is to hire capable and cogent people. I have to further build on an already existing capable team. Operationally they run the business.” The market know-how that the team has gathered is mainly by spending ample time with key customers. Investments, product utilisation, venturing into new technologies, etc. are made based on feedback gathered.
Capitalising on the company’s inherent synergies, Irani and his core team then effectively use innovative methods to come up with products that offer integrated solutions to customers.
Result: United they stand; united they score.