Syrma aims to grow five times by 2016

To cater to the demands of the EMS market in India, which is poised for long-term growth, Syrma plans to expand through organic and inorganic means. It is coming up with two manufacturing facilities. The company is also considering acquisitions, which can add to its capabilities

By Nitasha Chawla

Friday, July 12, 2013: In just seven years, Chennai-based Syrma Technology has created a unique position for itself in the electronics manufacturing services (EMS) market. An EMS venture of the Tandon Group that has a legacy of 30 years in developing high-tech manufacturing businesses in India, Syrma assists global customers to explore the growth opportunities in India’s vast domestic market.

Syrma provides EMS solutions to OEMs in the industrial, medical and telecommunications market segments. Shares Sandeep Tandon, managing director, Syrma Technology, “EMS is a vast ocean, and through our services, we have acquired a strong position in this market. Today, we have many leading global customers to whom we offer flexible engagement models to suit their needs. We ensure that an optimal supply chain is designed to deliver the products to our customers in the most economical and timely fashion.”

Syrma has grown rapidly since its inception in 2006, by first focusing only on manufacturing products in the magnetics and radio frequency identification (RFID) domains, and subsequently expanding into other EMS areas. Having registered a revenue of Rs 2 billion this year, Syrma plans to touch Rs 10 billion by 2016 through organic and inorganic growth.

Syrma has a long tradition of continuous technology and manufacturing innovation. This has helped it expand its presence worldwide and led to it servicing marquee customers such as Compaq, Dell, IBM, Apple and Western Digital. Some of the products manufactured over the years include disk drives, memory modules, power supplies and adapters, DC motors, fibre optic assemblies and a variety of electronic components.

Operating out of Chennai’s special economic zone, Syrma today ranks as one of the largest electronics exporters in India.

Services offered

Syrma provides manufacturing and integrated supply chain services with a focus on the India market. Its services include engineering, manufacturing and integration/sales support in several Indian verticals like radio frequency/wireless, power, defence, aerospace, medical electronics, industrial, automotive and software. “Our strength is to manage manufacturing operations of OEMs, streamline the entire product life cycle, improve their productivity, and give them a competitive edge,” says Sandeep Tandon.

Syrma Technology’s product engineering services enable customers to leverage their internal innovation capabilities. It ensures that the OEM’s intellectual property is protected while leveraging its design capabilities to lower the cost of production and improve the time to market for new products. Through close collaboration, Syrma helps its customers to reduce product development costs and risks. Syrma’s dedicated design and engineering team offers a range of solutions and collaboration models—from minor product changes and design enhancements of existing products to complete turnkey ‘design and build’ solutions.

Principles it operates on

Syrma believes in constantly innovating on its products, using the latest technologies in order to remain competitive in the market. The company offers built-to-order services to its customers and conducts regular quality and business reviews with them.

It follows a strict quality assurance system that ensures adherence to quality standards at all levels of manufacturing. Says Sandeep Tandon, “Maintaining quality is not only about checking. It is a process that has to be strictly followed at every stage of manufacturing. Therefore, we conduct periodic process audits, product failure analysis and invite regular customer feedback to ensure prompt corrective action.”

At Syrma, long term relationships are fostered—be it with the employees or with the customers. The company believes in delegation of authority to the managers who take the key day-to-day decisions. The company also conducts regular training programmes to encourage relationship-building between the management and the employees.

Strategies adopted for growth

Syrma focuses on high-mix low-volume manufacturing, keeping in mind the manufacturing ecosystem in India. The lean manufacturing approach has improved Syrma’s quality standards, and has led to reductions in defects and reworking. Explains Sandeep Tandon, “India doesn’t have the ecosystem to support high volume manufacturing. The lack of infrastructure for local component manufacturing are some of the reasons why we decided to practice lean manufacturing, and it has resulted in 100 per cent customer satisfaction.”

Learning from the experiences of Celetronix (now called Jabil), the first EMS company under the Tandon Group, which concentrated only on manufacturing services, Syrma was established with a different strategy. Unlike Celetronix, Syrma offered complete turnkey solutions to its customers along with design services, and was able to succeed. Shares Sandeep Tandon, “I think the biggest downside with our experience at Celetronix was that we were very successful in the manufacturing business in the early years but this blinded us to other great opportunities in India, mainly software services. Therefore, at Syrma we have ensured that we invest in our design services team as well, along with the manufacturing services. This has kept us more grounded with a 360° service approach to the customer.”

Syrma succeeded in regaining the confidence of its overseas customers through its commitments. However, it overcame this hurdle by sticking to its commitments and delivering high quality products on time. Recalls Sandeep Tandon, “Our first MNC customer from the US was very sceptical about a new EMS company in India. Those in overseas companies have the notion that India lacks the technical knowhow and a supply chain management system. However, when the company visited our facility in India, more than selling the product, we concentrated on selling our vision and commitment to the customer. And this worked. We developed a pilot product which the US team approved. That is how we established a relationship with the firm.”

Syrma has always given due importance to its customers’ requirements. In order to convince MNCs about its capabilities to serve them, Syrma developed a new team of vendors and trained them in international quality standards. “In order to meet our customer’s cost expectations, we had to develop a whole new set of local vendors. We trained them to meet international quality and supply standards. This was a Herculean task that our team executed very well. Ultimately, we were able to achieve a 30 per cent cost reduction versus the Chinese suppliers,” says Sandeep Tandon.

Syrma helps its clients to successfully bring products and services to the Indian market and also serves as their global manufacturing partner. In one such case, Syrma helped an overseas telecom company build the final integrated manufacturing line of the firm in India, helping it to improve its margins and operate at a lower cost. Says Sandeep Tandon, “One of our OEM customers needed to establish its presence in India. However, logistics and the customs tariffs on imported materials from China made the product too expensive. We decided to help our customer and formed a core team that visited the OEM’s facility in China, prior to initiating its launch in India. We introduced the company to the key India-based suppliers, even while being its EMS solutions provider. As a result, the OEM could reduce the lead time for its India projects by 25 days and operate at a much improved margin.”

Future plans

According to Sandeep Tandon, although the EMS market in India is small today, it is poised to grow in the long term. Syrma, therefore, plans to become a Rs 10 billion company by 2016 through organic and inorganic growth. It is coming up with manufacturing facilities at Nasik, Maharashtra in 2014 and at Hyderabad in 2015, which will take up the production being done at its existing manufacturing lines. The company is also looking for acquisitions to add to its capabilities. “Labour in China is becoming more expensive due to increasing wages and a lack of supply, which is the result of a fast-ageing population. India, on the other hand, has lower wages and there is an abundance of young working-age Indians. And with India’s strength in engineering and R&D, it is the perfect environment for EMS companies to grow,” concludes Sandeep Tandon.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine