In a discussion with EFY’s Nitisha, Saurav Kumar Singh, the Founder of Elecbits, elaborates on its design and manufacturing procedures. Additionally, he highlights a distinctive test tailored specifically for Electronics R&D engineers…
Q. How does Elecbits differentiate its services in the electronics industry?
A. We offer two distinct services: firstly, we collaborate with companies to conceptualise and design their electronic products in our design services. Secondly, for companies that have already created their products, we provide comprehensive supply chain solutions, encompassing procurement of raw materials and assembly onto PCBs, culminating in the delivery of final products. In our engineering services, our focus is on delivering top-tier electronics engineering solutions to companies worldwide. While design and technological advancements occur in India, our dedicated R&D team leverages extensive industry knowledge and experience to ensure the delivery of world-class engineering solutions. Simultaneously, we establish physical and digital infrastructures within our supply chain solutions to support world-class manufacturing services. Our ultimate aim is to attract companies from the US and UK to opt for manufacturing in India instead of China.
Q. How does your digital platform simplify manufacturing processes?
A. We have our R&D team. We handle factories, import/export, and financial planning. Our digital platform speeds up the process, from getting quotes for materials to managing payments and logistics. Unlike competitors’ manual methods, we deliver quotes in two hours, not days. Plus, we ensure quality with tech-driven processes. Our system also handles legal and financial issues, making imports smoother. Overall, we are simplifying and speeding up the whole process, setting new standards for efficiency and reliability.
Q. What are the steps for clients to utilise this digital platform?
A. Electronics has three key elements: PCB, assembly, and components. Our digital platform makes this process simpler. Initially, clients upload their PCB design files and select the best quote from 4000 vendors. Then, they utilise our Excel-like tool for materials to swiftly obtain quotes from 1800 vendors. Lastly, they upload PCB and component files for assembly to receive cost and timeline estimates from over 250 EMS companies. Additionally, we offer quality testing and manufacturing guidelines. These features enhance the efficiency of electronics production, with the exception of enclosure services.
Q. How do clients receive quotations and manage projects?
A. We offer our services through two distinct avenues. Firstly, individuals can directly access our dashboard on elecbits.in, where they can log in, upload their files and expect to receive a quotation within two to three hours. Alternatively, we streamline the process for major clients by assigning a dedicated project manager. These managers are responsible for gathering requirements, managing files, and utilising the platform to deliver the final quotation. Clients of this calibre need not interact directly with the platform; instead, they communicate exclusively with their designated project manager. Compared to our competitors, our approach with project managers ensures a superior experience, quicker quotation turnaround times, enhanced visibility within the supply chain, and a holistic solution tailored to meet all client requirements.
Q. What is the payment structure for partner companies?
A. Our payment structure is straightforward. We collaborate with tier-two EMS and EV companies, typically mid-level EV firms that have secured funding ranging from $5 million to $10 million. We handle design and manufacturing, requiring at least 30% upfront payment. Negotiations with our vendors involve paying them 40% or 20% of what we receive, with 10% retained for insurance or unforeseen issues. Weekly vendor payments are made promptly, even if we encounter financial challenges. We anticipate refining our payment terms to accommodate even lower advance payments, possibly as low as 10%. This structured revenue approach includes direct supply chain fees and project-based design service charges tailored to deployed resources and project duration.
Q. How do you ensure quality in your procurement process?
A. In India, most vendors only offer active components without proper documentation. Even big companies like Arrow and Avnet sometimes lack essential certificates. However, we provide complete documentation, including testing certificates and COCs, for active and passive components with precise tolerance levels. Unlike others, we ensure better quality with detailed testing reports for each IC, outlining expected results.
Q. How does your financial setup assist vendors?
A. Vendors often encounter delayed payments from clients, causing cash flow challenges. For instance, with a 3 million order, they might need to pay 2.7 million upfront to their suppliers but receive payment only after 75 days. To bridge this gap, we offer vendor financing solutions. Upon understanding our clients’ payment terms, we facilitate payment against orders (Pio) financing, leveraging partnerships with non-banking financial companies (NBFCs) like Cholamandalam, Stride Ventures, and others. This lets us provide vendors with the necessary funds upfront, enabling smoother operations and potentially higher margins. By offering these financial options, we aim to alleviate the burden of cash flow constraints for our partners in the supply chain.
Q. What is your streamlined R&D and manufacturing process?
A. Our R&D services focus on conceptualising and planning product ideas. Once a client approves the plan, including costs and timelines, we develop and design the product. Our process seamlessly integrates design and manufacturing, allowing clients to provide their ideas or concepts simply. With over 20 years of experience, our dedicated team of 25 members, including electronics PCB designers and industrial designers, ensures high-quality results. Once designs are approved, we initiate production, delivering end products directly to clients under white-label agreements.
Q. Do you handle full delivery fulfilment internally?
A. We handle end-to-end delivery fulfilment internally, acting as the sole interface for customers. While we utilise a backend dashboard to select the best vendors, our team manages all aspects of fulfilment, ensuring a seamless experience for our customers.
What are the origins of raw materials for EMS companies?
A. All 250 EMS companies are entirely Indian-owned, with manufacturing facilities in regions such as Manesar, Noida, Faridabad, Bengaluru, and Hyderabad. While these companies operate solely within India, their raw material procurement primarily relies on China, supplemented by partnerships established in six other countries.
Q. How do you go about handling business deals with EMS?
A. We thoroughly assessed several aspects of the factory’s operations during our due diligence process: We delve into their technical capabilities, examining their existing setup, specialisation, and testing capabilities.
Once these technical parameters are addressed, we evaluate financial and compliance factors. This entails scrutinising their financial health, including timely certifications like GST, adherence to compliance standards, and effective management of receivables and payables.
We consider contingency plans in case of default to mitigate potential losses and focus on strategising for the future, exploring avenues for growth and expansion in collaboration with the factory’s leadership.
Q. What payment agreement do you adhere to?
A. We have implemented a novel payment agreement in our industry to ensure timely payments, aligning with quality standards agreed upon verbally or via email. This agreement incorporates technical parameters, including testing criteria, that were previously undocumented. While not overly stringent, our general terms and conditions cover these aspects comprehensively. Our vendors and EMS companies have received this approach well, fostering smoother transactions.
Q. How can you ensure timely delivery of deliverables?
A. Establishing strong physical connections and relationships is essential for obtaining comprehensive supply chain visibility information. This involves investing time and effort in fostering meaningful connections with stakeholders. If all else fails, a face-to-face meeting may be necessary to identify and address any potential points of failure promptly. While this approach demands a combination of technological solutions, operational strategies, and energy, the outcomes are undoubtedly superior.
Q. What is the timeframe for manufacturing PCBs?
A. Producing 1000 phone-sized PCBs requires 45 days. The initial 30 days involve procuring raw materials, PCB fabrication, addressing financial aspects, legalities, and IPs. Subsequently, seven days are allocated to assembly, followed by the final seven days for testing, packaging, and delivery. Thus, the entire process typically spans 45 days for 1000 PCBs.
Q. What drives your focus on tier-two EMS companies?
A. Our focus lies on tier-two EMS companies with annual earnings ranging from 500 million to 5 billion . These companies seek international clients and new markets like EVs, IoT devices, aerospace defence, and drones, which remain largely untapped. Each industry segment offers varying profit margins; defence typically yields higher margins than EV businesses. We maintain a 15 to 20 per cent average margin due to our emphasis on assisting tier-two EMS companies in securing new clients in emerging industries.
Q. Please describe your manufacturing plant’s setup.
A. Our research and development lab, along with our operational teams, is located in Gurgaon. We have two halls for our lab and three for operations. We are a part of Hartron, a Haryana government company that supports fast-growing electronic startups. They lease space to NASSCOM, who then runs competitions. In 2022, we applied to one of NASSCOM’s competitions and were chosen out of 200 startups. Our lab is currently leased, and we have space for our tech and operations teams. For manufacturing, we use labs mainly in Manesar and lease SMT (surface mount technology) lines from EMS (electronic manufacturing services) partners as needed. We have good relationships with 16-17 EMS companies and lease SMT lines based on our needs. We follow an asset-light model. Our assembly process involves PCB (printed circuit board) design and assembly, which we outsource. We also have a warehouse in Gurgaon for storage and fulfilment .
Q. How many employees does your company have?
A. We have 54 employees of which 25 work in R&D, approximately 16 to 17 handle supply chain solutions related to manufacturing, and 5 are dedicated to developing the tech platform for the front end of our products. The remaining staff members are engaged in various operations areas such as finance, legal, HR, and administration.
Q. According to you, what are the main hurdles in the electronics industry?
A. In this industry, there are three main problems. First, there is not enough talent, especially in hardware design. When you look for job applicants online, you don’t find many. This is because there is little support for trying new things and learning from mistakes. Second, making things is complicated. For example, making circuit boards is tricky. And the advice you get isn’t always helpful because it is not up-to-date. Even big companies like McKinsey or PwC don’t always know how to help with this. Third, money is a big issue. Developing new products takes a lot of money, and you might not see any profit for years. This can make it hard to keep going and even lead to losing money.
Q. What actions are you implementing to address these challenges?
A. Our approach involves three key pillars:
We are creating opportunities and refining evaluation processes. For this, we are establishing a groundbreaking talent infrastructure in India, starting with our flagship initiative, E cube.
We are also focused on glamorising the industry. Unlike the tech sector, where roles like UI/UX development are celebrated, electronics has often been overlooked. We are changing that narrative by spotlighting champions and heroes in the field through events and media coverage.
Finally, we are simplifying the industry by leveraging technology.
From digitalising data to utilising AI for complex tasks, we are streamlining operations and paving the way for future advancements. By laying the foundation for talent, culture, and digital infrastructure, we’re positioning ourselves to compete globally .
Q. What is E cube?
A. Elecbits has developed E cube E³ (Elecbits electronics evaluation), a first-of-a-kind online assessment program for electronics R&D engineers. This program evaluates, filters and trains aspiring R&D engineers. E³ is specially designed to test real-world problems, unlike other exams that only test theoretical knowledge or skill-based proficiency. It is strategically built to create leaders in the electronics Industry. This evaluation structure has never been made before for the electronics industry. We aim to set this exam as the most prestigious standard for hiring individuals in this industry.
Q. What does E Cube’s exam focus on electronics?
A. E Cube has three parts, aiming to give practical electronics challenges, not just a regular test. People need to solve real-world problems. If they need to make a circuit board (PCB), they are given tools to design the schematic, test it, and show results. These exams happen regularly, like every three months. They help us get better at electronics with exciting programs. Even if someone doesn’t pass, they learn the problems they need more practice on to get hired at companies like Qualcomm or Samsung. We don’t just focus on basic or intermediate skills; some questions are advanced. There are two sections: hardware and firmware. Hardware includes power, sensors, and controls, while firmware involves electronic coding and programming. We split it this way so people can understand real-life uses and solve problems accordingly. The exam lasts 180 minutes, and afterwards, there are interviews. Big companies are also interested in using our hiring system.
Q. How are these exams conducted, and what is the cost?
A. Our platform is accessible online at no cost; no fees are involved. Our mission is to equip engineers for both national and industrial advancement. Comprehensive information about these examinations can be found on our LinkedIn page. Our recruitment or technical team frequently updates the page with details regarding upcoming exams. If somebody is interested, they can contact us via LinkedIn, and we’ll provide the exam link once it’s available. The test has been vetted by Testportal software for quality assurance.
Q. What do they gain post-examination completion?
A. Once someone passes the exam, each person receives a score, say 77 out of 100, along with feedback sent via email. This includes their performance and suggestions for improvement from our invigilators or examiners. If, for instance, we need to hire ten firmware developers in the next two months, we release the exam and receive 2000 to 3000 applicants. If over 200 or 300 scores above 50%, we start scheduling interviews for potential hires. Additionally, salaries aren’t fixed for the top 10 scorers; they are based on their scores. For example, if the benchmark score is 100 and the compensation is Rs. 1000, scoring 90 would mean a salary of Rs. 90,000. This unique approach aims to make the electronics industry more appealing, particularly to college students and IT professionals looking to switch careers.
Q. What happens to applicants who are not selected?
A. We are still working on a solution because this is our priority. However, as word about E Cube spreads and reputable companies endorse it, more industry players will likely recognise it as a standard. For the 190 applicants, we didn’t select, it’s not the end; as we grow, we’ll ensure that deserving candidates find opportunities. We’re committed to hiring anyone who has the potential. While we are exploring innovative ways to ensure they find their place in the industry.
Q. Do you have intentions to offer technical training or workshops?
A. Over the next six months, we aim to conduct training programs in government schools across all 29 states of India. We’ve engaged representatives from four states, with plans to expand to all states within the specified timeframe. These workshops will target eighth—and ninth-grade students, particularly in remote regions like Assam, Uttarakhand, Andhra Pradesh, and Odisha. We aim to instil curiosity and knowledge at a crucial age, inspired by examples such as China’s success in electronics, where even remote populations contributed to industrial growth.
Q. How does this initiative aim to shape students’ careers?
A. By reaching students at this stage, we hope to steer them towards fields like PCB design, offering alternatives to traditional career paths. Many of these students may lack access to expensive engineering programs but could excel with the proper guidance. Our approach involves identifying talented individuals during these workshops and providing them with free advanced training opportunities at our headquarters. Ultimately, this initiative is about investing in the future of our nation and its technological ecosystem.
Q. What else are you planning to do in the future?
A. Our plans include establishing super labs, initially focusing on five innovation centres tailored to specific industries such as EV, FinTech, power solutions, aerospace, and defence. These labs will address the reliance on imported designs, particularly from China, by fostering import substitution within the next two years. Situated amidst nature, like in Kerala or Orissa, these labs will provide conducive environments for concentrated work and innovation. Our ultimate goal is to elevate quality and living standards through domestic manufacturing, create job opportunities, and drive significant investments in electronics R&D infrastructure.
Q. What are the revenue projections for the next year?
A. From 2023 to 2024, our growth has averaged around 10% monthly, with revenue reaching approximately INR 65 million. We anticipate even greater success this year, although specific figures cannot be disclosed publicly. Within the next two years, we aim to achieve annual revenue in the hundreds.
