Indigenising parts that were being imported from China

The Challenge

Our Client wanted a domestic substitute in order to avoid import of parts from China. They did not have a prior domestic supplier when they approached us.

While solving challenges such as long lead times of almost 3 months and high import costs, we had to deliver quality products. And at the same time, we had to avoid inventory pile up that happens due to high lead times and uncertain, seasonal demand based on air conditioner sales.

The client was also levied with substantial landed costs, accrued in US dollars. The demand was high, so even a slight increase in costs resulted in an immense difference. To illustrate, the demand was around 30,000 pieces per month in 2011-2012. Today, it has risen up to 2.5 lakh pieces per month.

To add to our worries, the supplier just shared part drawings, and the processes involved in the production of those were not available anymore.

Moreover, part is a functionally critical one because even a minute deviation in dimension can lead to heavy noise and vibration in the indoor unit on a split air conditioner. So, the onus was on us to develop a precisely manufactured part while saving time and money for the client.

Our Process

• We carried out a tear-down analysis of the part. Along with this, we prepared drawings of the individual parts as well as the final component.
• Next, we defined the specifications for the raw materials and the finished component. Accordingly, we determined the manufacturing process.
• In the development stage, we laid special focus on precise aluminium machining and metal rubber bonding through moulding.
• Keeping the criticality of application in mind, we defined the important characteristics. As per these, we carried out failure modes and effects analysis (FMEA) of the design and the process.
• Additionally, we prepared a control plan and a quality plan for all the respective parts.
• After conducting a successful machining moulding trial, the manufacturing process was established.
• Subsequently, manufactured a pilot lot and got the parts approved by an OEM based in Japan.
• Finally, the production capacity was ramped up to meet the demand.

In a nutshell, we reduced the landed costs in US dollars which would have been almost 63% more than what the client ended up bearing in INR as a result of collaborating with us.

Primary Results

• The lead time usually faced after placing an order was reduced from 3 months to 5 days.
• Even though timely delivery was ensured, the existing inventory pile-up was reduced by 90%.
• A year-on-year process improvement further led to 20% reduction in cost.