‘Nano experience was applied to other development projects’

Tata Technologies, a subsidiary of Tata Motors, is synonymous with innovation in the outsourced engineering space. CEO and Managing Director, Warren Harris, talks about the company’s journey and the way ahead in an interview. Excerpts:

Would you agree with the view that Tata Technologies (TTL) is the best kept secret among Tata group companies?

Yes, I certainly do, if you take a look at what we do. There are really two proponents of the value proposition: one is outsourced engineering services and the other is helping manufacturing companies select and deploy the technology on which new products are built.

In the engineering services space, we have 10-11 electric vehicle premiums outsourced to TTL. In the Indian private sector, there are hardly any such engineering services companies.

Typically, we compete and go toe-to-toe with full-service providers from Germany and the United States. So it is an exceptional capability that exists here in India and the respect we have garnered with the customers. So, yes, we are the best kept secret of the industry.

Could you go back to the time when Ratan Tata set up this company?

Mr Tata said in late-1997, when the company was formed, that he did not want it to be ‘all things to all people’ but very specifically focussed on the manufacturing sector. He challenged us to gain the respect of the manufacturing sector not just here in India but around the world.

I just spoke to our employees at the Diwali celebration and profiled some of the things we do worldwide and the relationships we have got in and around disruptions in terms of electrification, connected vehicles and autonomous driving.

I don’t believe we will ever claim that we have arrived as far as Mr Tata’s challenge is concerned but I am very proud of the progress that we have made towards the goal he set out when he formed the company.

Does this include the fact that three of four engineers who put together the Nano were from TTL?

You are very well informed! When Mr Tata put together the team to develop Nano, he wanted it to be young, creative and think outside the box. He then took four engineers, three were from our company, and one from Tata Motors.

The team did a lot of the original concept work undertaken for the Nano. When the concepts were crystallised and the development plan formalised, TTL provided 65 per cent of the resources. So, we are very proud of the achievement despite the fact that the product hasn’t been a commercial success.

From an engineering and innovation perspective to develop a vehicle for $2,500 is remarkable. What we were able to do was to take our frugal innovation capabilities developed on that programme and leverage those to other engagements.

I was on a panel in New York a couple of years ago where I told the story of the Nano. Seated next to me was the chief executive of an organisation that sells beverages and ships refrigerating units. He told me that if we could develop a car for $2,500, we could help him develop a cheaper refrigerating unit.

We were able to get the most out of the units and reduce costs by 30 per cent. So here is an example of how the Nano experience was applied to other development projects.

Would this then be your credo going forward? Developing low-cost machines that are extremely efficient?

I think everyone is cost-conscious and doing more for less is what all good companies like to practice. But increasingly our business is not driven by making something cheaper than anybody else but by our ability to innovate, our capabilities, and by the relationships we have.

A few years ago, an entire project would have the OEMs making the decisions and the supply chain fulfilling those in what was a command-and-control relationship. Today, it has become much more of an ecosystem.

There is a requirement and responsibility to co-innovate, exert ownership over the end solution with OEMs having a much greater appetite to outsource, what three-four years ago they would exclusively own and control.

How have such collaborations helped?

If you look at the electric vehicle space, for instance, the number of parts has substantially reduced and the whole supply chain is getting disrupted. The need for suppliers has also reduced.

Everyone is having to innovate by the business model perspective in terms of products and relationships (with other organisations). I think those organisations that are prepared to make the big bet on where the industry is going will ultimately succeed.

How would you then react to the case of electric scooter maker, Ather Energy, grappling with a global shortage of electronic parts?

I think it is more of a commodity challenge. I also think that shortages and capacity (or the lack of it) at different stages of the markets drive innovation. If you take a look at what is happening in the battery world there is a move from lithium ion to solid-state batteries in some geographies. There are a number of academic institutions investigating solid-state batteries and you will see the chemistry and the products evolve with the availability of resources and politics.

Do you think India is up to the challenge of electric mobility?

I think the Government needs to be applauded in terms of messaging. They have signalled that they want 30 per cent penetration by 2030 but different ministries are sending out mixed messages, which makes it difficult for the industry to make long-term plans.

It takes three-four years to develop a vehicle and if you are going to make those big bets, then I think there is an issue there. India is a price-sensitive market and the cost of batteries are still very high for pervasive penetration of EVs.

Therefore, we are not seeing the same kind of investments or dynamics taking place in China for instance. Every time I go to China there is a new entrant committing to build an EV and we are seeing massive growth in that market.

COMMENT NOW