22 Sep India Sourcing Strategy Tip: Manufacturing Clusters
The first and most vital step in any sourcing process is identifying potential suppliers.
Finding suppliers in low-cost countries, such as India, has become much simpler. As recently as 15 years ago, for domestic US suppliers, one had to rely on a Rolodex and the familiar sight of bookshelves lined with the green hardcover Thomas Directories. For international suppliers, the task was foreboding. Those methods then gave way to jockeying with CD’s and computer searches. Today, the information contained in those green directories combined, and more, is now available in the palm of your hand. For international sourcing, search engines like Google, Bing, etc. along with sourcing specific sites such as Alibaba, Trade India, etc. have made the process of finding suppliers so much simpler and more effective than the Rolodex days.
Yet, every silver lining seems to attract its own gray cloud! The benefits of the power and speed of a computer are weighed down by the teeming abundance of information. The volume of data, information and companies coming online on a daily basis, is mind numbing. Parsing through all this information is a daunting task. Getting ready to search on a computer or smart-phone is probably no less overwhelming today, than it was staring at the green directories lining those shelves. Such is life today! We just have to adapt and get smarter at how we approach our searches.
Here is a simple tip to help someone who is looking for suppliers in India: Think clusters! No – No – not the detrimental type associated with a certain four-letter word, but one that has its roots in the historical development of India.
“A cluster is defined as a geographic concentration (a city/town/few adjacent villages and their adjoining areas) of units (household/factory) producing near similar products and facing common opportunities and threats. In a typical cluster, such producers often belong to a traditional community, producing the long-established products for generations.” (Artisan Clusters, Sarkar and Banerjee, Foundation for MSME Clusters, New Delhi)
Civilization in India has been around for millenniums. What one sees today in the manufacturing landscape of India has been emerging over several hundred centuries. Approaching a search for an effective supplier in India with this perspective and a healthy respect for that history is beneficial. Having some knowledge and appreciation of this historical development of Indian crafts, artisanship, guilds and then eventually the industrial age factories, can do wonders to the quality of the search results. Here are some examples to illustrate this fact.
The city of Kanpur and adjoining regions is now renowned for its concentration of leather footwear manufacturers. The origins of this is traced back to 1778, relatively early in the British political and military dominance in India, when an East India Company platoon was stationed there. There was a demand for military footwear, saddlery, and harnesses. This led to the concentration of high-quality leather goods in Kanpur and the state in which it is located, Uttar Pradesh. The figure below shows the leather clusters in India. You can see the concentration of clusters centered around Kanpur.
Armed with this knowledge you could focus your search for leather goods to Kanpur and adjacent regions. Your search time is significantly reduced and the quality of leads that you get will be far superior.
The second example involves iron castings. The iron foundry industry in India originated in the industrial city of Howrah in West Bengal. Howrah is just across the river Ganges, from the city of Calcutta (now Kolkata), which was the original capital of India and the center of British rule until 1911. Howrah’s proximity to the British power center in India explains its evolution into a center of trade, industry, engineering and manufacturing. The British referred to Howrah as the “Sheffield of the East”. Wartime needs, during the second world war, fueled the rapid growth of Howrah as a foundry hub. Even today, Howrah continues to be a major center for iron foundries, especially for sanitary and drainage castings and manhole covers that are seen on streets throughout the US.
Needless to say, if you had this information going into your search for iron castings in India, specifically drainage and sanitary castings, you would narrow your search down to the Howrah and adjoining regions. The results would yield very cost effective and experienced suppliers.
The foundry industry in India has since expanded well beyond the city of Howrah and, as the figure below shows, there are a large number of foundry clusters all across India today. Again, as in the case of Howrah, most of these clusters have a history behind their origins. They typically specialize in some specific product type. Knowing this, one can narrow down their search to seek out the skilled foundries for the specific product types of their needs.
The third example relates to brass components. The state of Gujarat, has a large concentration of brass raw material and components producers. The reason for that is because the State is the home for two large ship salvaging or ship-breaking centers. The copper and brass scrap salvaged from these ships are a direct raw material input for the brass industry that flourishes in that state and has the reputation of having the lowest cost for brass components.
The figure below shows the clusters in the state of Gujarat. These specialize in the industrial brass components, as opposed to the brass figurines and other items that you would see in a Pier 1 Imports store.
I am not advocating cracking open the history books/e-books and studying up on the evolution of clusters in India. For the interested readers, here are a couple of references (Guilds, Daily Life in Ancient India) that are fascinating reads, especially if you enjoy history.
I am suggesting that the knowledge about the history behind manufacturing in India or at least knowing about the existence of manufacturing clusters, will help anyone sourcing or planning to source from India. Think “clusters”.
In your search parameters, include the word “cluster” to the product type you are searching for and see what comes up. You will quickly get a good idea of where the manufacturers of the products you are looking for, are concentrated.