Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Monday, 22 June 2020

Autobiography of an Appliance



Some 60 years ago, teachers who set questions for “ English Language “ exam paper for 10th standard , were fond of selecting following type of question for writing an Essay :


“ Write an autobiography of a Pencil  ( or a Shirt or a Table …… ) 



Predictably that essay ( answer by students ) would  start with :


“ I was born as a teak-wood sapling in the jungles of Burma….. “ (  before they renamed Burma )



Students just loved this kind of a question since they had mugged up the answer (  affectionately called “ LBH = Learn By Heart “ in  “ Solved Question Papers “,   published by Kutmutia )



I am not aware of the present-day preferences by exam question paper setters and the students



But for some time now, product manufacturers in India are being asked to write :


  Autobiography of an Appliance



Let me explain


There is a demand from all and sundry, that Indian product manufacturers should place a sticker / label, “ COUNTRY  of  ORIGIN “ on each piece manufactured / sold



Hear this voice :




Extract :

Trader's body CAIT has urged Commerce and Industry Minister Piyush Goyal to make it mandatory for every e-commerce portal to mention 'country of origin' on each product sold at their platforms, so that buyers can make an informed decision.

Most e-commerce portals are selling Chinese goods, about which the consumer remains unaware, said the Confederation of All India Traders (CAIT), which has launched a campaign for boycott of Chinese goods

=========================================================

To me, this concept of “ Country of Origin “ seems like a very nebulous matter ( not unlike CRAB nebula )


Now , even in these days of “ Global Supply Chain “, it is quite possible that the humble pencil’s “ Country of Origin “ remains Burma – all the way from that piece of wood encasing a slender piece of black lead, to its printing / packing / dispatching


But it gets very complicated to determine the “ Country of Origin “ of ( say ) a domestic appliance such as a Fridge / Microwave Oven / Dish Washer etc., which has many processes ( stages of Value Addition through inputting of local manpower )


Question :

How much “ Value Addition “ ( as a percentage of total cost of production or selling price ) should take place in India, to qualify an appliance for “ Made in India “ tag ?


I am unaware of any official / authentic definition

To get a clear picture of how “ Value Additions “ take place in a chain of countries , before an appliance gets delivered to your home, consider the following ( over-simplification ) :

=======================================================

   Value-Addition is a Many Splendored Thing – in today’s Global Supply Chain

========================================================
    

PROCESS STAGE
OUTPUT
( at each stage of Process )
Country supplying Inputs to Processing Country
PROCESSING COUNTRY
( where value addition takes place using local manpower )
INPUTS at each Stage

( Value Addition )
MANPOWER COST as % of final total cost

( Value Added )






1
Iron Ore

India
Manpower
5 %
2
Ingots
India
Australia
Manpower
10 %
3
Bars
Australia
China
Manpower
10 %
4
Components
China
Indonesia
Manpower
10 %
5
Sub-Assy
Indonesia
Singapore
Manpower
25 %
6
Assembly
Singapore
South Korea
Manpower
30 %
7
Packaging and Dispatch
South Korea
India
Manpower
10 %










TOTAL
100 %


Obviously the scenario described above is an “ Over Simplification “ considering that , at each “ Stage of Processing “ ( in a given country ) , “ Inputs “ may come from many other countries ( not just one country )


Since I was confused about the exact “ Methodology “ employed by our Government to declare :

Ø  This product is “ Made in India “ ( ie; “ Country of Origin “ is India ) , and

Ø  This product is “ Made in China “,


-      some  2 years ago , I sent following blog / email to our Policy Makers :

E Commerce Definition : a Space Ship ? …………………………………[ 05 July 2018 ]


Extract :

And , as far as defining what is “ Made in India “ is concerned , I believe , government goes by “ Percentage of Value Addition “ locally

But, this is a very difficult and time-consuming exercise

Even when possible, its result holds good for a very short period in a dynamic situation

A manufactured “ local product “ could have hundreds of components ( both, local and imported )

And those “ local components “ could have “ imported “ raw materials or intermediates

These days , a product could be,

*  patented in one country ( concept )

*  designed in another country

*  developed ( detail manufacturing drawings  ) in another country

*  components made all over the World

*  Sub-Assemblies ( of those components ) carried out in another country

*  Final Assembly done in another country

*  Packaging done in another country

*  Offered for sale on ONLINE e-commerce portals in another country

*  Marketed by agencies located all over the World

*  Delivered using manpower / drones / supply chains of several countries

*  Financed by funds from all over the world ( Interest Costs )

At which “ Level  “ of Value Addition , does a product become “ local “ ?


And if I download a " Product Drawings / Design " over the internet and then " 3D Print " it in my garage ( using " imported " resins ) , then is that a " local " product ?

=========================================================


And 4 years ago, I sent following blog / email to Cabinet Ministers  :

Missing the Woods for the Tree ?   …………………………………………[ 12 Aug 2016 ]




Extract :

Entire cycle of Designing / Manufacturing / Marketing / Selling / Order-taking / Delivering / After-sales Servicing  / Logistics / Collecting Payments / etc , will get spread so thinly across Countries / Continents / Companies / Individuals, that it will become next to impossible to,

Ø  keep track of " WHO "

Ø  is adding " WHAT " value to the process 

Ø  and " WHEN " 

Ø  and from " WHERE "   

No one will be able to unravel this GORDIAN KNOT !


 ========================================================

Dear Shri,


B C Bhartiaji ………………………[ President – CAIT  /  president@cait.in  ]


Praveen Khandelwalji ……….[ Secretary General – CAIT  / sec-gen@cait.in  ]


There are news reports that this “ Country of Origin / Made in India “ draft policy will soon be put in public domain for comments

I hope my comments above, helps you in framing CAIT comments


With regards,

Hemen  Parekh

hcp@RecruitGuru.com   /   23  June  2020 
    


No comments:

Post a Comment