The Swiss cleaning machine manufacturer Cleanfix has set up a new assembly plant in India. Cleanfix was supported in this by a team of experts comprising engineers, supply chain specialists, and purchasers from Project Professionals and Kloepfel Services. The consultants have derived 10 valuable lessons from the project for other medium-sized companies.
Why India?
Cleanfix, known for its robust and innovative cleaning machines, has chosen India as its location to tap into the enormous sales potential of the country with 1.4 billion inhabitants. India, as the largest democracy, is appealing with its young average age, good demographic forecasts, and widespread use of English. Furthermore, establishing a assembly plant in India will allow for cost reductions. Additionally, the „China Plus One“ strategy reduces Western companies' dependence on China by establishing additional production or supply locations in other countries.
The biggest challenges
Setting up a factory in India presents companies with a variety of challenges. Cultural differences between Western and Indian business cultures require sensitive management and clear communication. The implementation of Western quality standards necessitates an intensive on-site presence and a collaborative partnership with suppliers. Furthermore, depending on the location, recruiting qualified skilled workers can prove difficult. Overcoming these challenges was crucial to the project's success and requires careful planning and intercultural competence.
Lessons for small and medium-sized enterprises
Important lessons can be drawn from the Cleanfix project for other medium-sized companies:
1. Leveraging local partnerships Joint ventures with experienced local partners are key to effective market entry.
2. Taking cultural differences into account Successful projects require a deep understanding of local circumstances and intensive communication.
3. Step-by-step expansion The Indian facility will initially supply only the local market, in order to limit risks and gain experience.
4. Flexibility and endurance Indian projects often require more time and adaptability than originally planned.
5. On-site quality assurance A strong presence and a high degree of quality assurance are crucial for implementing Western quality standards.
6. Realistic Project Planning Project plans and budgets should include generous buffer times, as deadlines are often set optimistically.
7. Clear definition of assignment: A precise definition of the project brief at the outset is crucial for success.
8. Effective Information Management: Smooth information exchange between the sending unit and the Indian works is critical for project success. This must take into account the communication habits of our Indian colleagues.
9. Relationship maintenance Personal relationships and regular on-site visits are more important than formal contracts.
10. Expert support Working with specialised consulting firms helps overcome cultural and logistical hurdles.
Outlook
Felix Rüesch, CEO of Cleanfix, summarises: „Despite the challenges, expansion into India offers enormous opportunities. In the long term, other markets could also benefit from Indian production. The free trade agreement between the EFTA states and India further expands the scope for action because it facilitates trade in machinery and semi-finished products.“