For a Smarter Tomorrow

Embodying the elegance and pursuit of perfection inherent in Japanese design philosophy, Panasonic consumer durables in India has made this possible by its exceptionally state-of-the-art manufacturing facility at Jhajjar, Haryana, which has just been upping its game of manufacturing sophistication. The recent visit to this facility at Jhajjar Model Economic Township (MET), Haryana, unraveled many facets of its value chain be it manufacturing, logistics or the overall supply chain…

The progressive shift in the consumer demand for upgraded technologies, energy-efficiency and health & lifestyle value offerings have paved way for the stupendous growth of consumer durables products in the country. Coupled with this, the improvement in consumers’ discretionary income and rapid electrification have augured well for the massive growth figures of the industry and that’s what prompted Panasonic India to set up a state-of-the-art facility in Jhajjar, Haryana.

Started in 2012, Panasonic’s mega manufacturing factory produces air conditioners, refrigerators, welding machines and washing machines. The Japanese multinational electronics corporation has completed 100 years globally and in India offers consumer and B2B based products. Adopting the ‘Make in India’ vision, the company ensures that 80 – 100% of each product sold by it in the country, is produced in India.

Set up with an investment of Rs115 crore for Refrigerators, Rs300 crore for Air conditioners and 100 crore for Washing Machines, the factory is spread across 76 acres and has a capacity of manufacturing 10,00,000 sets of ACs, 4,00,000 sets of washing machines, 25,000 sets of welding and cutting machines and 5,00,000 sets of Refrigerators. The USP of the plant lies in the fact that it operates on the premise of 0% scrap, which means that the company does not produce any waste during manufacturing of various products. All kind of scrap is reused for producing some other component.

Throwing light on the same, Saurabh Rawat, Factory Head, Technopark, Panasonic, Jhajjar, said, “This is one of the biggest large appliances facility in India. We produce refrigerators, air conditioners and washing machines here. Our television manufacturing unit is situated in Noida, UP, then there are other plants which are located in the middle and south of India. We are producing top-load washing machines, split air conditioners (1 ton to 2 ton) and Refrigerators (270 to 345 litres),” he said.

The plant exports Panasonic products to countries like South Asia – Bangladesh, Sri Lanka, Maldives, Nepal; Middle East – UAE, Oman, Qatar, Bahrain, Kuwait, Iraq; Africa – Nigeria, Ghana and Ivory Coast. Rawat explained that the large appliances segment has massive scope in India and Panasonic is working on new technologies every year.

For Panasonic, India is the fastest growing market globally and the country is among its high priority markets. Besides, Panasonic Appliances is also pushing India to be a research & development (R&D) hub to serve its other global markets. R&D is the backbone of any manufacturing unit. Globally Panaosnic has many big R&D centres. For example, for air- conditioners, they have R&D centres in Malaysia, China and Japan. These R&D centres help in the areas like product customization based on the local market feedback, value engineering and innovation. The R&D centre in India has more than 50 people who work with the major centres, and together they keep on developing the products based on Indian requirement.

State-of-the-art innovation center

Panasonic India currently exports to 16 countries and is aggressively foraying into local manufacturing and development of appliances. Transforming its business model to offer disruptive technologies in the field of IoT, Mobility, Artificial Intelligence (AI) etc., Panasonic India developed its first India Innovation Centre (IIC) in Bengaluru. The platform brings the best minds from the country together to develop transformative solutions on Panasonic’s five key focus areas – Connected/Community, Mobility, Energy, Industrial and Finance Solutions. The CoE is focused on open Innovation in the Consumer Electronic space and leverages the technology already available and create geography centric USPs to develop innovative solutions.

Locational advantages

When asked about the strategic positioning of the factory, Rawat said, “From the logistics standpoint, we are strategically located in Jhajjar, Haryana, which connects the facility to the entire length and breadth of the country. As ours is a global organization, it gives us tremendous advantages in terms of sourcing components from our global suppliers. With the government’s emphasis on the development of supporting infrastructure such as highways and dry ports is further offering a fillip to the industry. With the positive changes taking shape, I am quite confident that sitting in the North, I will be able to cater to our target audience in the Southern part of the country at competitive price points. Post-GST, things have just worked in our favor by reducing significant lead times.

“From a manufacturer's point of view, GST has helped to bring-in efficiency for us. While from a products’ perspective, all the large consumer appliances were under 28% GST slab at the time when it was implemented. It has impacted the market for last two years, but last year Refrigerators and Washing Machines were brought under 18% GST slab, which helped get some pace in the overall demand in the H2FY19 and will likely to bring more pace in this FY. We recommend the authorities to bring large appliances under 12% slab, keeping in mind the need and energy efficiency the new technology brings-in,” Rawat said.

M. Ravindra, Head Logistics, Panasonic India Pvt Ltd, adds, “Jhajjar has immense locational advantage as it is very near to NH -48. It is characterized by its geographical confluence with economic corridors (DMIC, AKIC, Eastern peripheral corridor), the eastern and the western freight corridors and several industrial corridors pass through the state. It has a well-connected quality network and transport infrastructure which offers multi-modal logistics infrastructure. It also has many ICD in close proximity and hence offers multiple options for the import of raw material and for the export of our products.

Managing quality & supply chain

For Panasonic, quality is a strict no-compromise proposition. Rawat highlights, “We have a stringent supplier selection process which is done in due cognizance with the global support team. Our global team performs due diligence in terms of operational processes, parts quality, labor laws, financial muscle, etc., before finalizing a supplier. Once the supplier selection has happened, we make sure that they are equally involved in every decision making as far as supply chain in concerned so that they feel that they own the process rather than simply delegating the task. They are a true partner in our progress, so once they are on-boarded, we make sure they are imparted with the best of knowledge and technology from our global team to deliver the desired result. We ask them to visit our overseas factories to benchmark best practices. This not only helps us gain the best quality products, but also helps us improvise on the standard operating processes.”

Deliberating on the supply chain complexities, Ravindra says, “Logistical requirements for Panasonic are complex. Since there are different factories spread across multiple locations where we manufacture our products, it becomes extremely crucial that we ensure that products that are currently required for sales are available within the same month of purchase. The products are also imported from South East Asia, Japan and China, and are brought in and cleared at multiple ports. Here is where our logistics team ensures that the products are available for sale across different branches within a specified time limit.”

He adds, “Our products are sold all over the country, which also includes fragile items as well. So, it is important for us to utilize the best supply chain practices. It is not a choice; it is a requirement for us. Some of the practices we follow are:

• Warehousing Order Execution Metric – KPI
• Customer Order Delivery On time in full accuracy – KPI
• Operational Efficiency
• Inventory Turns
• Prompt Reverse logistics

Clear SOPs for partners

Panasonic has summarized its core thinking on procurement in a 3-item set of Procurement Policy. The company globally establishes partnerships with suppliers to respond to production activities on a global scale and works to create the functions and values our customers demand based on relationships of mutual trust and through diligent studies and cooperation.

Complying with laws and regulations, social norms, and corporate ethics, the Company promotes procurement activities together with suppliers that fulfill their social responsibilities, such as human rights, labor, safety and health, global environmental conservation, information security. In order to achieve product values expected by customers, the Company serves as the contact point for suppliers with respect to information, such as the market trends of materials and goods, new technologies, new materials, and new processes, and works to ensure and maintain the quality of purchased goods, realize competitive prices, and respond to market changes.

With respect to logistics, each dealer has specific requirements in terms of delivery turnaround time, which is adhered by the warehouse team. “We have an internal system in place to salespeople to manufacturing SCM, which is completely integrated into our value chain. We keep on meeting customers and take surveys on the changing consumer preferences and their behavior. Our strategy is based on our consumer and not on the competition,” explains Rawat.

Ravindra remarks, “As an organization, we believe that sending regular communication with business updates and questionnaires or surveys is the best way to maintain transparency and trust with the dealers. It is important to make sure that we are giving our dealers the most effective tools to help sell and support the products. The relationship between a manufacturer and their dealers goes beyond the contract. The manufacturer relies on the dealer to take responsibility for their products, and the dealer depends on the manufacturer to create quality products that help to keep the trust of the customers intact. The constant improvement in communication with the dealer network helps improve relationships across the stakeholder value chain.”

Ensuring critical products reach the last mile in the safest way

It is essentially all about the management of the flow of things between the place of origin and place of delivery. Talking about the infrastructure loopholes in the country, Rawat comments, “Indian road conditions are extremely poor. Added to that, the transportation staff doesn’t have the know-how of handling such high-quality expensive consumer electronic goods. We have developed in-house systems to ensure utmost safety until it reaches the end consumers. We design our product development cycle based on artificially generated scenarios that might hamper product safety while handling. Once the product passes the test, we work on the final standard of the packaging. We perform physical test such as sending our final product on rough terrains in rough handling conditions.”

“We have an excellent network of FC/DC spread across the length and breadth of the country. Through these, we can ensure that the delivery of fragile products to the last mile is done in the most efficient and safest conditions and without compromising on the service levels,” remarks Ravindra.

Omni-channel retailing and the company’s readiness

Omni-channel retailing is fundamentally a fully integrated approach to commerce that provides shoppers a unified experience across online and offline channels to extend a seamless shopping experience. “We are fully geared up to meeting the stringent service levels of the online retail sector. Logistics ensures that each order is executed at FC /DC and delivered within a specified time period to the online retailer. Many of these Omni-channel retailers need customization in terms of labelling as well as packaging, which is done at the warehouse and dispatched according to the delivery schedule requested by the retailer,” asserts Ravindra.

After sales service and reverse logistics

After sales is one of the most critical aspects in the entire product cycle. “We ensure that not only the products are manufactured, delivered but also an end-to-end solution is provided with respect to achieving the highest level of customer satisfaction. We are constantly improving the after sales service and innovating to serve customers efficiently,” says Ravindra. Reverse supply chain is a challenge considering the vast geography of India. Moreover, with companies targeting Tier II & III cities, it is a high cost proposition to collect back a single unit from such locations. This still remains a very unorganized segment where we do not have any 3PL service provider offering services at an economical freight with a short TAT.”

Mammoth task at hand

While the company has achieved many milestones, it has a clear strategy in place to grab a major consumer durables market share in India. As Rawat says, “Large appliances have a huge scope of expansion in India and we are working on new technologies and advanced models every year. We intend to increase the plant’s manufacturing capacity and exports in future. There is a scope of scalability within the plant, for the next two to three years, the unit will be working on the same model. After that, we can accommodate certain B2C or B2B products too.”

“We are at par with the rest of the world and even hold a significant position in the global scheme of things. We also have a state-of-the-art R&D center. In tune with changing times, we are aggressively launching a newer line of products with enhanced features to serve our consumers’ fast changing requirements. I am quite bullish about the manufacturing growth in India. The government has also been supportive of newer investments as well as offering necessary fillip to support growth,” he adds.

With an exciting additional responsibility of developing and heading business operations in South Asia, Middle East and Africa, which are emerging markets for Panasonic, the brand will continue with its philosophy of empowering the local management to bring the best of products & services for its tech savvy consumers and focus on India as well as new growth areas. With the tagline, ‘A Better Life, A Better World’, Panasonic is fast becoming consumers’ favored brand with its sophisticated and life enhancing features making their lives better and ultimately leading to a better world.