SFO Technologies strives to become a key player in international market

Starting off as an EMS company in 1990, in Cochin, SFO Technologies Pvt Ltd today boasts of its global presence. The flagship company of the NeST Group, SFO Technologies aims to be a billion dollar company by 2015 by expanding its existing capacities and through acquisitions

Nitasha Chawla
Tuesday, December 11, 2012: At a time when the Indian electronics manufacturing industry was at a nascent stage, two brothers Javad K Hassan and N Jehangir, who are from Kerela, took up the challenge to form one of the first electronics manufacturing services (EMS) companies in India with the aim to establish India’s footprint in the global electronics map. Formed in 1990, SFO Technologies has grown from strength to strength by adding new manufacturing competencies such as wire harnessing, RF and wireless, power supplies, fibre optics, magnetics, sheet metal fabrication and plastic injection moulding.

From a turnover of Rs 37.9 million in 1991-92, to Rs 6,706 million out of NeST Group’s Rs 8,845 million in 2011-12, SFO Technologies today has over 5000 employees and operates at 32 locations, with many Fortune 500 companies as its customers, spread across USA, Europe and Asia.

Today, SFO Technologies is the flagship company of the NeST Group founded by Javad K Hassan and N Jehangir, which is a conglomerate of companies with the expertise in developing embedded and realtime software, and which are focused on low-volume, high-mix products in the healthcare, automotive and industrial space.

“Today, SFO has over 50 world class customers in different countries. Therefore, we are able to withstand any economic downturn in any particular country or company. We also have multiple manufacturing locations to address situations like a sudden increased demand, natural calamity or labour unrest,” shares N Jehangir, vice chairman and managing director, SFO Technologies.

Beginning of the journey

With a strength of 150 people, SFO Technologies started manufacturing in the Cochin Special Economic Zone in 1991. N Jehangir and Javad Hassan wanted to create a unique company in Kerala with a global approach, something which was unheard of at that time. However, it was not easy to gain the confidence of foreign buyers since India was considered as a technologically challenged sourcing centre, which didn’t conform to international standards.

But Jehangir and Hassan were determined to start an EMS venture and gradually managed to build SFO’s image in the foreign market. Recalls Jehangir, “I was a fresh graduate when we started SFO with a small team of experts and a lot of conviction. The time was ripe to explore the foreign market since companies in the US had decided to outsource electronic products and assemblies to low cost countries like China and India in 1990. At that time, EMS for export was an unknown model for Indian companies and SFO became one of the first in the country to venture into this field. Gradually, we got more and more opportunities to expand our business globally, because of our service, expert team hard work.”

Strategies that have helped SFO grow

SFO Technologies describes itself as a unique original design manufacturer (ODM) company offering ‘concept to product’ services with proven excellence in technology, cost, quantity and delivery. SFO follows a one-roof concept, providing total solutions covering design, software development, engineering and manufacturing of printed circuit board assemblies (PCBAs), fibre optics, power supply, cable and wire harnesses, sheet metal, plastic moulded parts and magnetic systems, with total integration testing. For its technology development service, a strategic area of growth for the company, SFO has tied up with premier research and academic labs to undertake technology development projects under the guidance of world renowned scientists and technologists.

Says N Jehangir, “Our focus is on customer satisfaction. The efforts at SFO are to address customer requirements and offer cost-effective solutions. Customer delight takes priority over profitability.” The company has been able to do so by learning from its top clients like GE, which is one of its oldest customers. Adds Jehangir, “GE has been our best customer in our 22 year journey. From them, we have learned things like adherence to quality parameters and e-waste management systems, which we have implemented in our systems. MNCs like GE, Philips, Toshiba, Tyco, etc, spend a lot of money on their quality management systems and by having such customers, we get an opportunity to understand their systems, which we implement in our own company.”

Catering to the customers’ needs assumes a greater significance at SFO. Building the strength and capabilities of its personnel is also equally important for the company. SFO believes in a people-centric philosophy to ensure that there is synergy between the corporate goals and the aspirations of its employees. For this, the company follows what it calls the ‘5P’ process, which stands for the patience to work with customer, passion to work, following the goal with perseverance and persistence, hence becoming a partner. Jehangir believes this approach has not only helped the company in meeting the expectations of its customers but has also added value to its employees who are now better equipped to handle projects.

At SFO, a lot of emphasis is given to training, since the firm considers its manpower as its most valuable asset. To make sure that the company absorbs the best talent, it has partnered with KMEA Engineering College, Cochin. SFO’s HR department picks up the most suitable candidates from the college who are then given on-the-job training at the company. Informs Jehangir, “I can say it with pride that being in the business of manufacturing, where labour unrests and strikes are a common phenomenon, we have never faced even a single day of strike. Also, the attrition level at SFO is just 0.5 per cent. We have been able to retain most of our employees with us for 22 years and will continue to do so.” Through practices like Kaizen, the continuous improvement of employees is ensured at SFO. States Jehangir, “We recruit highly qualified professionals who undergo extensive inhouse, on the job, training before joining operations. Our employees are provided with continuous training in many management subjects that make them competent to take on higher responsibilities in the future. Through Kaizen, employees are even encouraged to come up with suggestions for continuous improvements.”

Cashing in on its strengths

Quality is the cornerstone of all activities at SFO, which is why the company has obtained the most coveted certifications such as ISO 9001, ISO 14000, ISO 13485, TL 9000, and recently, AS 9100 and SEI CMMI Level 5. As Jehangir puts it, “This certification will enable the company to register major growth in our business including the aerospace segment.” The company already has two major customers in this segment and expects that AS 9100 certification will enable the company to enlist many more companies.

Jehangir believes that to stay ahead of competition, continuous improvement is an essential strategy, so the company practices the Lean methodology as a tool to constantly improve its processes to reduce the cost of operations without sacrificing on quality, delivery and cost performance.

Apart from Kaizen, Six Sigma manufacturing practices are followed at SFO. These have helped the firm identify and remove the causes of defects (errors), and minimise variability in manufacturing and business processes.

SFO’s huge infrastructure adds to its strengths. It has a manufacturing capability that enables its customers to transfer new product introductions seamlessly. Its 60,000 sq m of manufacturing facilities are located in Trivandrum, Cochin, Bengaluru and Mysore, facilitating hassle free import and export with access to international airports and container seaports, thus providing easy access to countries across the globe. It has ten SMT lines with a total placement capability of 700,000 components per hour and world class machines by Siemens, Fuji, Philips, etc.

All its units are ISO 9001 certified and the group now aspires to reach Six Sigma status in quality. The software units of the group operating in Trivandrum and Cochin are assessed at CMMi Level 5. SFO has also established a worldwide operations network with offices that provide onsite consulting and development services in USA, Canada, Australia, Japan, UK and Qatar.

The company has many awards to its credit, which includes the ‘Best Quality Award’ from GE Healthcare, the ‘On Time Delivery Award’ from GE Energy, the ‘Cost Competitiveness Award’ from Tyco, the ‘Best Design Award’ from Diebold and the ‘Value Engineering Award’ from New Flyer. It has also won the ‘Best Exporter Award’ from the Government of India.

The road ahead

Starting as an EMS company that was purely into manufacturing, today SFO is a one-stop solutions provider for design, software, manufacture and post-sales support. SFO now aims to be a US$ 1 billion company by 2015 through organic and inorganic growth, which will include expansion of its existing capacities and acquisitions.

Shares Jehangir, “We are planning vertical and horizontal integration to add to our business activities. We want to expand our global presence and open up manufacturing facility in China and high level integration facilities in the US, Japan and UK. We already have our marketing offices for software and hardware solutions in these countries.”

As far as organic growth is concerned, taking advantage of the fact that people are now opening up to the Indian market and moving away from China, SFO has expanded its manufacturing capabilities. It has recently completed its second factory in Mysore and another in Chennai is under construction. SFO is also planning to enter north India with a factory in Noida by the middle of 2013.

List of machines in SFO Technologies’ plants

Other machines include in-circuit testers, network analysers, spectrum analysers, function generators, LCR meters, noise figure analysers and signal generators

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